International shopping centre specialist Sonae Sierra reported a 9% increase in net profit to €64.2 mln in the first half of 2017 compared with the year-earlier figure of €59 mln.
Higher EBIT, a better financial result and improved value creation in its investment properties all contributed to the result, the company said.
'The growth in results in the first six months of 2017 confirms the success of our strategy and reflects our dynamic management approach,' commented Fernando Guedes Oliveira, Sonae Sierra's CEO. 'The company continued its capital recycling strategy, making acquisitions through Iberia Coop, its Socimi ORES with Bankinter, and via a new joint venture established with AXA IM. Once again, our professional service provision businesses continued the growth path experienced in past periods.'
Improved shopping centre performance in both Europe and Brazil saw the company's direct result rise to €30.3 mln, a 13% improvement compared to the first half of 2016. Tenant sales were higher in Europe and Brazil, performing particularly well in Romania due to the opening of ParkLake in Bucharest, and rising 7.1% and 5.2% in Portugal and Spain respectively.
While global occupancy rates overall fell slightly, dropping 0.3 p.p. to 95.8%, occupancy climbed to 95.5% in Romania from 88.6% the year before, again relating to the performance of ParkLake.
Acquisitions via partnerships
During the first half, Iberia Coop (in which Sonae Sierra holds a 10% stake) acquired a 100% stake in Albufeira Retail Park, while ORES (the Spanish REIT with Bankinter in which Sonae Sierra is the operating partner and owner of a 3.75% interest) acquired five assets, two in Portugal (Portimão Retail Center and Media Market Braga) and three in Spain (Forum Leioa, Forum Galar and Mercadona Oviedo).
The company also completed the purchase of Área Sur Shopping Centre in Spain, a 85/15% joint venture between AXA Investment Managers – Real Assets and Sonae Sierra, which is managed by Sonae Sierra.
The firm said its development activities are performing well, with the current pipeline including Nuremberg, Designer Outlet Malaga (Spain), Zenata (Morocco), Cucuta (Colombia) and the NorteShopping and Centro Colombo expansions in Portugal.
Construction work commenced on the McArthurGlen Designer Outlet Malaga (Spain), a 50/50% joint venture between McArthurGlen and Sonae Sierra representing a €115 mln investment. The 30,000 m2 outlet centre with over 100 brands will open in 2018.
