Corio to sell off EUR 670m of non-core assets in 2012

Dutch listed property group Corio will focus on accelerating its disposal programme in 2012, with sales planned to increase five-fold this year to help finance a EUR 2.5 bn development pipeline.

During a presentation of its 2011 financial results, Utrecht-based Corio said it is in 'advanced stages of negotiation' on EUR 150 mln worth of divestments expected to close by the end of the first half. The company, which specialises in shopping centres in Europe, is planning to divest a total of EUR 670 mln of assets this year, mainly in the Netherlands and France, versus EUR 136 mln a year before. Planned disposals include Le Balzac, a 15,000-m² office scheme fully leased to CSC under a seven-year rental agreement. The asking price is over EUR 100 mln.

'Our focus will remain on achieving progress on the accelerated disposal programme envisaging completion of a larger part in the first half of 2012,' CEO Gerard Groener said.

Earnings excluding changes in asset values and deferred tax, known as direct result, rose by 6.4% to EUR 267 mln in 2011, or 2.91 euros a share, from EUR 251 mln, or 2.88 euros, a year earlier. The company expects its direct result to improve in 2012, while the direct result per share is forecast to come in at a slightly lower level, due to the company's dividend structure.

Corio said it is increasing its focus on large centres, which are more resilient in times of economic uncertainty. They currently account for 38% of Corio's revenues, Chief Financial Officer Ben van der Klift said. 'This is a strategically good development.'

Like-for-like net rental growth on the retail portfolio was stable, at 1.9%. It was driven by 'phenomenal' growth in Turkey (28%) and in Italy, which topped Western European markets at 5.2%.

Corio plans to propose a dividend of EUR 2.76 in cash or shares. 'In the context of an uncertain macroeconomic environment, our focus is on preserving the capital structure of Corio through non-core asset disposals, balanced management of the development pipeline, and stock dividend,' the company said.

With a development pipeline of over EUR 2.5 bn, Corio said it is building up its own development department and expertise to reduce the share of turnkey projects and internalise development.