Corio writes down EUR 140m on portfolio in first 9 months

Listed shopping centre owner Corio reported total devaluations of EUR 140 mln, or 2%, of its operational portfolio over the first nine months of 2012.

The company's direct result came to EUR 197 mln, on a par with the first nine months of 2011. The indirect result dropped to minus EUR 160 mln, from a negative EUR 20 mln in the first nine months of 2011 due mainly to the devaluations.

The writedown followed EUR 41 mln in upward revaluations, EUR 168 mln in negative revaluations and a EUR 12.4 mln loss on disposals. The net result of EUR 140 mln negative was the major contributing factor to the portfolio dropping EUR 190 mln from EUR 7.42 bn to EUR 7.23 bn over the nine months.

Of the six markets where Corio is active, Germany saw the largest devaluation (- EUR 52 mln), followed by Spain and Portugal (EUR 37 mln). The French and Italian portfolios saw devaluations of EUR 10 mln and EUR 17 mln respectively.

Corio recorded a devaluation of its Dutch retail portfolio of - EUR 9.6 mln and EUR 3.6 mln on offices. The lowest revaluation was for the Turkish retail portfolio (EUR -2.4 mln).

The company said total revaluations were negative over the nine-month period as the 'economic and political crisis in the European Union did not improve'.

Like-for-like net rental growth for the retail portfolio was flat over the nine months, with footfall and sales remaining stable. Net rental income rose 1.8% to EUR 329 mln from EUR 323 mln in the same period last year. Corio signed 262 new retail contracts and renegotiated 160 retail contracts. As a result, 5.8% of the portfolio was re-let or renewed, resulting in 4.0% higher rents for these units.

Corio signalled earlier that it intended to sell EUR 670 mln of assets, mainly in the Netherlands and France, in 2012. So far it has signed and transferred EUR 212 mln, with an additional EUR 87 mln signed but not transferred and another EUR 201 mln in pending sales.

In its outlook Corio said, 'the growing genuine uncertainty in the economy and austerity measures by governments create an increasingly challenging environment for the retail sector.'

'Our expectation is that the company will produce a total direct result in 2012 that is 1-3% lower compared to 2011. The distributed stock dividend will reduce the direct result per share for 2012. Taken the aforementioned into account, the direct result per share in 2012 will be 4% - 6% lower compared to 2011.'