Mercialys outlines EUR 955 mln development plan, eyes retail parks

Mercialys, the dedicated property subsidiary of French retailer Gruppe Casino, plans to spend EUR 470 mln on developing new Casino supermarket outlets over the next three years. It will also carry out renovation and extension at existing Casino sites, involving investment of EUR 485 mln up to the end of 2011.

Casino established Mercialys in 2005 to manage and develop its real estate assets. Mercialys. went public in October 2005, and converted to a SIIC, the French real estate investment trust, a month later.

Chief operating officer (coo) Geri Robert-Ambroix said 2006 was a good period for Mercialys, and 2007 is expected to be even a better year. He was speaking during the presentation of the company's full-year 2006 results. In the coming years the French commercial property company envisages double-digit growth in rental revenues. The French company added it is seeking to expand into the retail parks market, 'a sector very popular in the UK, but just beginning in France.' The company, which currently focuses on France, is also considering international possibilities, although this is not 'at the top of the list' at the moment.

'There are two reason for satisfaction for 2006,' said ceo and chairman Jacques Ehrmann, 'A record organic growth of 12.4% in rents and a capital engage of EUR 165 mln, of which EUR 154 mln in acquisitions at an average yield of 7.9%.' The portfolio's value rose 31% to EUR 1.34 bn over the last 12 months, while 349 leases were renewed or relet, adding some EUR 5 mln in annual rents. The main investment in 2006 was the purchase of five shopping malls on the French island of Corsica. On January 2007, Mercialys signed a contract to acquire 60% of three additional shopping centres in the island for EUR 48 mln.

Net income came to EUR 60.5 mln in 2006, a 19% increase year-on-year. Ehrmann said the board will submit a proposal for the payment of a EUR 0.71 dividend per share at a meeting in April.