Eurocommercial acquires French malls for EUR 76.5m

Eurocommercial Properties (ECP) has acquired two shopping centres in France for a total of EUR 76.5 mln. The properties are located at St. Doulchard near Bourges and Chasse-sur-Rhône close to Lyon. Both are already income-producing, Eurocommercial said in its report on the company's first quarter 2007/2008 results up to 30 September 2007.

The Amsterdam-based company has also acquired 'moyennes surfaces' adjacent to one of the centres for EUR 2.5 mln, resulting in a total cost of EUR 79 mln for both properties, including acquisition expenses. In both cases ECP has acquired ownership of the hypermarket together with the gallery and the car park, thereby securing full management control.

The Bourges centre consists of a Géant Casino hypermarket with a lettable area of 15,780 m² and a gallery of 3,668 m² with 1,200 parking spaces. Total rent from the property comes to EUR 2.2 mln; an average of EUR 113/m². The second centre at Chasse-sur-Rhône consists of a Géant Casino hypermarket with a lettable area of 14,000 m2, together with a gallery of 1,500 m². The total rent is EUR 1.45 mln, an average of € 94/m².

Eurocommercial said the properties will produce a net initial yield of 5.25%. 'With passing rents set at extremely low levels there is excellent reversionary potential. Furthermore both centres have the necessary zoning to carry out extensions of up to 5,000 m² each subject to obtaining all required administrative consents.' The Amsterdam-based company said it booked a total investment result of EUR 7.75 mln compared with EUR 4.58 mln for the three-month period ended 30 September 2006, thanks to increased rents and turnover.

Eurocommercial invests mainly in retail property and its EUR 2.2 bn of assets are now held in Italy (38%) in France (45%) and Sweden (22%).