Klépierre boosts H1 revenues, revises full-year guidance

In its first combined operating results since taking over European retail specialist Corio, French REIT Klépierre reported higher rental income and revenues for the first six months of 2015 and upgraded its earnings guidance for the full year.

The company, which completed its merger with Corio in the first half, boosted overall revenues to €654.4 mln from €477.7 mln in the year-earlier period. Net rental income on a like-for-like pro forma basis increased 2.7% to €525.2 mln from €398.7 mln in the first six months of 2014.

First announced a year ago, the merger with Corio created the second-largest listed retail company in Europe in terms of assets (over €21 bn). Market leader Unibail-Rodamco has €26.8 bn of shopping centre assets.

Commenting on the results, Képierre CEO Laurent Morel said: ‘The 2015 half-year earnings positively reflect the group’s major scale-up and the substantive work done by our teams to continuously reshape the portfolio and improve its intrinsic quality.

‘These are the first operating results of the combined entity and we are pleased to see how promising they already are: while Klépierre delivers solid net rental income growth on its former scope, the newly acquired portfolio offers positive rental performances like-for-like, with significant potential ahead in term of operating synergies. This makes us all the more confident that our net current cash flow per share guidance for 2015 will be in the high end of the target initially announced this year.’

France-Belgium, Scandinavia, Iberia, and Eastern Europe posted net rental income growth above 3%, while a negative performance by the Corio portfolio in the Netherlands weighed slightly on the group average.

Higher portfolio value
The value of Klépierre’s property portfolio was €21.9 bn at end-June, reflecting a 2.3% increase for the shopping centre segment compared with end-December 2014, if the acquisition of Corio is taken into account on a pro forma like-for-like basis. Shopping centres account for 97.8% of Klépierre’s total portfolio.

In France-Belgium (38% of shopping centre portfolio), asset value increased 2.2% like-for-like on a pro forma basis, 4.1% in Italy (16% of portfolio), and 1.7% in Scandinavia (16% of portfolio).

Key highlights in the first half included the acqusition in March of Plenilunio, a 70,000 m2 . shopping centre in Madrid for €375 mln, and the sale to Dutch property firm Wereldhave of a portfolio of nine community shopping centres in the Netherlands for a total €770 mln.

In addition, several disposals of non-core assets were completed for a total of €49.8 mln, in line with Klépierre’s strategy to streamline its portfolio and focus on generating new development opportunities.

Based on the first-half earnings and a retail business environment that has been improving since the beginning of the year, Klépierre said it has revised its full-year guidance upwards. Net current cash flow per share is now expected to reach €2.15 versus the €2.10-2.15 range announced in February.