Mercialys to offload EUR 500m of assets in strategic shift

Mercialys, a French shopping centre REIT 50%-owned by retailer Casino, has announced plans to sell off EUR 500 mln of assets and to distribute EUR 1.25 bn in one-off dividends in 2012 as part of a new strategic focus.

In a statement, the Paris-based firm said it will distribute EUR 13.59 per share to its investors, partially funding the distribution with the disposal of roughly half of its shopping centres.

The firm will put 50-60 smaller assets up for sale while focusing on larger, dominant malls. 'We expect this strategy to improve the resilience of our portfolio, maintain a robust growth - whatever changes in the macro environment are - and increase the yield offered to investors,' Mercialys' CEO Jacques Ehrmann said in the statement.

Also in 2012, majority owner Casino aims to reduce its shareholding in Mercialys to about 30-40% from just over 50% at present.

Mercialys enjoyed double-digit growth in funds from operation which amounted to EUR 141 mln in 2011. Rental revenues rose by 7.7% to EUR 161 mln in 2011, or by 3.2% on a like-for-like basis.

The company said it will raise EUR 1 bn of new debt in 2012 through the issue a EUR 500 mln bond and the grant of a EUR 500 mln three-year bank loan. 'As of today, Mercialys has received confirmed offers from five banks in order to set up the financing within the coming weeks,' it said. Following the transactions, Mercialys' financial leverage will be less than or equal to 40%.