Unibail-Rodamco offloads €931m of shopping centres to Carmila

Unibail-Rodamco is selling a portfolio of six non-core shopping centres in France to Carmila, the new mall vehicle created by French retail giant Carrefour, in a deal worth €931 mln.

The purchase price represents a net initial yield of 5.5% and an average value per m² of €7,280/m².

The deal has yet to be approved by the respective work councils of Carmila and Unibail-Rodamco, with finalisation expected in September. Carmila has been granted exclusivity on the deal until mid-October.

The shopping centres, all anchored by Carrefour hypermarkets, comprise a total 286,000 m2 of GLA. They are: BAB 2 (42,100 m2) in Anglet-Bayonne, Bay 2 (63,850 m2) and Bay 1 (32,450 m2) in the Paris region, Cité Europe (72,486 m2) in the Calais region, Labège 2 (47,700 m2) in the Toulouse region and Place d’Arc (27,700 m2) in Orléans.

Unibail-Rodamco said the disposal forms part of plans announced in February to sell between €1.5 and €2.0 bn of shopping centres over the next five years. The sales programme is aimed at enabling the group to concentrate its portfolio on large assets in a bid to further strengthen its leadership position in Europe. The Franco-Dutch company currently has some €26.8 bn of shopping centre assets, still ahead of the €21.3 bn which the new Klépierre-Corio combine will have if the merger, agreed earlier this week, goes ahead.

‘Through this agreement with Carmila, we are pleased that Unibail-Rodamco, Europe's largest commercial property company, has been able to quickly and efficiently deliver on its stated goal of further reshaping its portfolio to focus on assets with the highest return potential,’said Unibail-Rodamco’s CEO Christophe Cuvillier. He added: ‘Carmila is the natural owner of these shopping centres, anchored by large Carrefour hypermarkets. We are sure that Carmila will be able to generate significant synergies and returns consistent with the requirements of its shareholders. A true "win-win" transaction.’

The proposed transaction is not expected to impact the recurring earnings per share growth guidance of at least +5.5% for 2014.

For Carmila, the acquisition fits in with parent company Carrefour’s strategy to regain control of dominant Carrefour-anchored shopping centres across Europe. Carmila’s CEO Jacques Ehrmann told PropertyEU in May that the company planned to spend over €1 bn by 2018, largely to be deployed in France, Spain and Italy.

‘The next few years will be about growth,’ the 54-year old manager said. ‘We estimate that there are roughly €16 bn of shopping centres in these three European countries that we do not own, and around a quarter of them change hands every five years. Our plan is to acquire a share of 20 to 30% of these investment assets in the near future.’

‘We intend to continue to buy assets on the market in order to further develop our portfolio,’ Ehrmann added. ‘We have the financial strength to do that and, if we need further capital, we have already agreed in principle on the terms for a capital increase.’

The targeted spend of €1 bn comes on top of the €2.7 bn worth of assets recently acquired in separate transactions with French REIT Klépierre and parent company Carrefour.