Klépierre harnesses US mall expertise

French real estate company Klépierre says has gained not only a new investor but also a strong retail partner which will give it more clout in the market following its tie-up with Simon Property Group.

Recently, Simon, the biggest shopping centre owner in the US, became Klépierre's largest investor by buying 54.5 million shares, almost a 29% stake, from BNP Paribas, Klépierre’s historic shareholder which founded the business in 1990 and kept a controlling stake for the past two decades.

'Simon came to us and offered support for our strategy to focus on the fastest-growing areas in Europe,' commented Laurent Morel, chief executive of Klépierre, in an exclusive interview with PropertyEU. 'We now have two very strong and qualified investors among our shareholders. We retain a financially strong partner in BNP Paribas while the partnership with Simon will give us leverage in the market place, both in our discussions with retailers and in our marketing practices.'

The sale by France's biggest listed bank was widely expected in the market, as BNP Paribas was pressured by new Basel III regulations to strengthen its capital ratio by January 2013. According to market rumours, Simon Property was one of just a handful of investors which looked at Klépierre. Germany's ECE Projektmanagement, which has a similar business strategy, was also said to be in the running.

The deal sees Simon invest EUR 1.5 bn for a 28.7% stake in the Paris-based real estate investment trust while BNP Paribas, which previously owned 50.9%, is left with a 22% interest. France's largest listed bank said it will hold on to this stake for at least one year after the deal, but market rumours indicate that a full exit of Klépierre is on the cards. According to Kai Klose, an analyst with Berenberg Bank in London, it is noteworthy that BNP Paribas has reduced its exposure as a lender to the company. 'Klépierre is becoming more independent financially,' he said.

Morel declined to comment on the two shareholders' plans for the company, but said 'both investors will make their own considerations when the right time comes’. ‘What is important for us is that we have been able to get rid of any uncertainty surrounding our shareholder structure and that both these investors believe in our business and support our strategy,' he said.

The full interview appears in the April edition of PropertyEU Magazine. Click on the link below to subscribe