Corio has signed an agreement for the acquisition of a 50%-interest in Esenyurt shopping center currently under development in the Esenyurt district on the European side of Istanbul for a total amount of approx. €42 million (US$60m) (including acquisition costs). In addition, Corio has signed letter of intent for the acquisition of a 35%-interest in Edip shopping center, currently under development in the western part of Istanbul, for a total amount of approx. €21 million (US$29.6m) (including acquisition costs).
Esenyurt shopping center
Esenyurt shopping center is located between the Bahçesehir district on the east side and the Esenyurt district on the south side. This means that it will be accessible from both districts, which provides an attractive catchment area of 400,000 inhabitants. The project is located along the TEM-highway, the most important highway in the area, between Edirne, Istanbul and Ankara and connecting Esenyurt district with the city center of Istanbul. Esenyurt is one of the fastest growing satellite towns of Istanbul and currently has approx. 225,000 inhabitants belonging to the higher and middle income classes. At present there are no other shopping centers in the Bahçesehir and Esenyurt districts.
Shopping center Esenyurt will comprise approx. 45,000 m² GLA divided over three floors with 2,500 parking spaces. The lower floor will be anchored by a hypermarket and the upper floor by leisure activities, including a cinema and a food court. Lease contracts in this shopping center will be based on the US Dollar.
The developer of the shopping center, Garanti Koza, will have a 50%-interest in this project and the other 50% will be equally divided between Corio and Akis, one of the shareholders in Akmerkez. After realization of the project Akis and Corio will each take over half of the 50%-interest in the shopping center of Garanti Koza against a predetermined amount. Corio's participation in Esenyurt shopping center will involve a total amount of approx. €42 million. The transaction is subject to approval of the Turkish Competition Board. Although there are no other material suspensive conditions for this project, until this approval has been received, the project will remain in the variable pipeline.
The expected opening date of the center will be in the first half of 2009. The transaction is forecast to generate a net yield of at least 8% in the first full year of operation.
Edip shopping center
Edip shopping center is located in the Bagcilar district, close to the neighbouring Güneþli and Küçükçekmece district, in the densely populated western part of Istanbul, directly at the highway connecting Atatürk airport with the TEM highway. The Bagcilar district currently has approx. 550,000 inhabitants. The shopping center will serve both the Bagcilar district and the Küçükçekmece district.
Edip shopping center will comprise approx. 65,000 m² GLA divided over three floors with 3,034 parking spaces in the basement and surrounding the shopping center. The shopping center will be anchored by a Praktiker DIY and a Carrefour Hypermarket in the basement. Leisure activities, a cinema and a food court are planned on the upper floor. Lease contracts in this shopping center will be based on the Euro. The expected opening date of the shopping center will be in the first half of 2009. The transaction is forecast to generate a net yield of at least 8% in the first full year of operation.
The developer of the shopping center, Edip, will have a 65%-interest in the project. Next to the equity, the total project (100%) will be financed by a bank loan for an amount of €93.0 million. Subject to the signing of the final agreements and the approval of the Turkish Competition Board the project will remain in the variable pipeline.
These acquisitions fit into Corio's strategy to build critical mass in its core market Turkey by investments in dominant shopping centers against attractive, for risk adjusted returns.