Corio has reached an agreement on the acquisition of a 49%-interest in the shopping center Città Fiera in Udine, Italy, for approximately €87 million (including €1 million acquisition costs).
The center comprises in total approx. 70,800 m² GLA, of which approx. 14,800 m² is not part of this transaction. Città Fiera will contribute with retroactive effect from 1 January 2007 to the earnings per share of Corio and offers the potential to add value by using its extension possibilities.
Shopping center Città Fiera is located on the western side of Udine in the region Friuli Venezia Giulia, between the region Veneto to the west, Austria in the north and Slovenia to the east. It is the largest shopping center in the region and the dominant center of Udine. The catchment area has 380,000 inhabitants within 30 minutes driving distance. Udine is the provincial capital and a university city with a per capita income of approximately 12% higher than the Italian average.
Città Fiera is the dominant shopping center in the region due to the largest commercial offer gathered at one site on a good location. The shopping center offers an attractive retail mix, consisting of a gallery of 160 shops/units, several medium-sized stores, a multiplex with 11 screens and two food courts and restaurants. The Finiper Hypermarket of 9,000 m², a garden center (3,000 m²) and a petrol station (2,800 m²) are excluded from the transaction. Main tenants of Città Fiera are amongst others: Coin, Oviesse, Scarpe & Scarpe, Benetton, Sisley, H&M, Mega Intersport and Cantina Mariachi. The center has 4,000 car spaces of which 1,000 are covered. Città Fiera currently has an occupancy rate of 99%. Città Fiera was developed by the vendor and opened in December of 1992. An extension of the gallery opened in the spring of 2003.
Corio acquires a 49%-interest in the company that owns Città Fiera, 47% from Financiere Concorde (which consequently will continue to hold the remaining 51%) and 2% from Finanziaria Bardelli for €86 million of which €47.5 million will be paid in cash and €38.5 million through a participation in the net debt of the company. Corio will have supervision and will jointly define and share with Financiere Concorde the company's financial and managerial policy. According to International Accounting Standards (IAS 31) the cooperation between Corio and Financiere Concorde qualifies as a joint venture, which means Corio should proportionally consolidate its share in the shopping center. Both parties have agreed that Corio is entitled to a pre-emption right on the purchase of the 51%-interest belonging to Financiere Concorde in case it decides to sell the shares to a third party. Besides, both parties have agreed that Mr. Bardelli will remain managing director and that Corio will share its professional retail expertise.
Financiere Concorde also owns - through a different company - an area of approximately 450,000 m² surrounding the shopping center that can be used for future extensions of the center but also for other functions and/or mixed use such as retail warehouses, hotels, residential, offices. Presently the vendor is working on the next extension of the center.
This acquisition fits very well into Corio's strategic goal to further exploit its existing strong position in the retail markets by means of investments in dominant shopping centers with potential in the present core markets (The Netherlands, France, Spain, Italy and Turkey). With this acquisition Corio Italia owns 6 regional malls and one medium sized mall that are dominant in their respective catchment areas.