French REIT Klépierre announced on Thursday that it has completed the disposal of a portfolio of Carrefour-anchored retail galleries located in France, Spain and Italy, to a consortium led by Carrefour for €1.98 bn.
French REIT Klépierre announced on Thursday that it has completed the disposal of a portfolio of Carrefour-anchored retail galleries located in France, Spain and Italy, to a consortium led by Carrefour for €1.98 bn.
The deal, which was first announced in January, sees French retail giant Carrefour join forces with eight institutional investors to acquire the €2 bn portfolio consisting of 126 retail galleries covering 476,000 m2 in France, Spain and Italy.
Well-informed market sources told PropertyEU that Carrefour is taking a 42% stake in the package while its shareholder, private equity firm Colony Capital, Dutch pension fund Blue Sky Group, asset manager Amundi, insurers Crédit Agricole Assurances, AXA and BNP Paribas Cardif as well as US investment manager Pimco and Sogecap will hold the bulk of the remaining stake. None of the other investors will hold more than 15% of the new company holding the asset, which is being financed with roughly €1.8 bn in equity and €900 mln in debt.
The package, which is owned by Klépierre (83%) and insurer CNP (17%), comprises small to medium-sized retail galleries which Klépierre initially acquired from Carrefour in 2000 and 2001.
For Carrefour, the move reflects a new strategy launched by CEO Georges Plassat aimed at increasing the control of the hypermarkets the group operates by owning and managing the surrounding sites and retail areas. The company has recently completed another major acquisition involving 45 French malls with a value of €700 mln.
In a statement, Klépierre said that it will not retain the asset and property management contracts for this portfolio. As a result of the sale, the retail specialist will operate a more cohesive shopping centre portfolio of 130 assets in Continental Europe, representing a total value of €3.4 bn. Shopping centres in France-Belgium now represent 44.3% of Klépierre’s total portfolio value, Scandinavia 26.7%, Northern Italy 10.8%, and other markets 13.2%.
The net cash proceeds for Klépierre are €1.5 bn, which the company will use to repay €1.3 bn in debt with short maturities (2014 and 2015) and restructure the current hedging portfolio to optimise its financing costs. The deal reduces the group’s loan-to-value ratio to 40%.
Laurent Morel, Chairman of Klépierre’s Executive Board, commented: 'With a reshaped and more consistent portfolio, we are now able to more effectively focus on strengthening the appeal of our offering and the competitive edge of our shopping centers. In addition, our capacity to fund future growth through the development of our quality pipeline and selective opportunistic acquisitions in our selected European regions is now reinforced.'