Wereldhave to acquire French malls from Unibail-Rodamco for €850m

Amsterdam-listed Wereldhave has agreed to acquire a 233,300 m2 portfolio of six shopping centres in the heart of French cities from Unibail-Rodamco for €850 mln, refecting a net initial yield of 5.5%.

The investment volume equates to an average value of €4,200/m2.

Cushman & Wakefield advised Wereldhave on the huge deal. Announcing the agreement which gives the company a retail presence in France Wereldhave said it is entering its 'growth phase' and the portfolio 'provides instant critical mass in French retail market'.

'This deal is spot-on for us. Not only because it is immediately earnings per share accretive, but also because it allows us to position Wereldhave as the leading specialist in mid-sized shopping centres across North-Western Continental Europe. The centres in France are well-established with an attractive yield. They are modern centres, further improving the quality of our portfolio, while we see ample opportunity to create additional value at these centres. We are very excited to take this portfolio on board,' said Wereldhave CEO Dirk Anbeek. Wereldhave owns office space in France.

For Unibail-Rodamco the shopping centres, which have an average size of 33,750 m2, are non-core. 'Unibail-Rodamco is pleased to have reached an agreement with Wereldhave, a party which, as a specialist in mid-sized shopping centres, will be able to manage these malls to their full potential. This transaction, part of the disposal programme of retail assets announced in February this year, will allow the group to continue to sharpen its focus on large regional shopping centres.'

Wereldhave will finance the transaction through a rights issue of up to € 550 mln, existing debt facilities and cash. The company's LTV will remain in the 'conservative' range of 35-40%.

The proposed rights issue is subject to shareholder approval on 28 November and the company expects to finalise the transaction by end-December 2014.

THE CENTRES
The shopping centres are Rivétoile (28,400 m2 GLA) in Strasbourg; Docks 76 (37,600 m2) in Rouen; Saint Sever (45,400 m2) in Rouen; Passages Meriadeck (39,500 m2) in Bordeaux; Côté Seine (28,900 m2) in the Paris region and Docks Vauban (53,500 m2) in Le Harve.

The centres have an average footfall of 7 million visitors per year and all are in sizeable catchment areas of more than 100,000 inhabitants and are dominant centres in these areas.

Wereldhave said that the spending power of the population in the respective catchment areas is well above the French national average. The tenant base is well diversified and has stable cash flows, in most cases with leading food retailers such as Auchan, E. Leclerc and Casino acting as anchors. Leading retail brands like H&M, Zara, Pull &Bear, Pitta Rosso, Mango, Hollister, Esprit and well established French food and entertainment chains such as Brioche Dorée, Gaumont, UGC and Pathé are present in the centres.

The average occupancy rate is 91%, which is below the average of the current Wereldhave portfolio and the company is confident, based on its track record, that it can improve on this level.