French listed property group Klépierre has unveiled plans to sell off EUR 1 bn worth of properties as it seeks to deleverage its business after posting solid results in 2009. The 'extensive disposal programme' will involve both office and shopping centers properties, the group said on Thursday. The asset sales are expected to have only a minor impact on cash flow, it added, 'since they will contribute to deleveraging.'
French listed property group Klépierre has unveiled plans to sell off EUR 1 bn worth of properties as it seeks to deleverage its business after posting solid results in 2009. The 'extensive disposal programme' will involve both office and shopping centers properties, the group said on Thursday. The asset sales are expected to have only a minor impact on cash flow, it added, 'since they will contribute to deleveraging.'
Klepierre, which in July announced the EUR 2.7 bn acquisition of Steen & Strom, saw an increase in revenues of almost 20% to EUR 784 mln in 2008, mostly driven by the income generated by the Steen & Strom acquisition (annual rent of EUR 38 mln). On a like for like basis, the increase in revenues was more moderated (5.3%) and comparable to the increase reported in 2007.
The group, which mostly focuses on shopping centres, said that, in total, the business of its retailers proved resilient despite the global economic crisis as a result of the geographic distribution of its shopping centre assets. Central Europe showed strong revenue growth (+7.5% on average), while Southern Europe has been harder hit, with Spain (-5.0%), Italy (-3.0%), Portugal (-2.1%) and Greece (-1.9%) all reporting lower revenues. Comparatively speaking, the company's malls in France turned in a slightly better performance of -1.3% over the 12-month period. The group said the default rate increased to 2.3% in 2008, from 1.8% at year end 2007.
Klepierre invested a total of EUR 1.7 bn in the course of 2008, of which EUR 458 mln in shopping centres across France and EUR 601 mln in shopping centres in Scandinavia. Disposals amounted to EUR 140 mln in the same period.
'In an economic environment that is growing more difficult, Klépierre expects to benefit from its business focus on shopping centres and retail properties (93% of total rent in 2008) spread throughout diversified European areas. Even the downward trend in consumer spending, slightly lower occupancy rates and a minor rise in default rates should not have a material effect on the Group’s solid cash flows,' the company said.
