Corio has been granted a 46.9% interest as the major subscriber in the IPO of Akmerkez GYO, which owns 96.5% of the leading shopping center Akmerkez in Istanbul, Turkey. This investment will amount to approximately USD 192 million or approximately ⬠148 million.
Akmerkez is a shopping center located at the junction of Etiler, Ulus and Levent, three of the most prestigious and affluent neighborhoods on the European side of Istanbul. The shopping center, which opened in 1993, consists of 34,680 m² lettable area of retail space with 246 retail units let to leading international and national retailers. The occupancy rate at the end of 2004 was 99.7%.
Akmerkez GYO is a debt free company with positive working capital and based on the IPO pricing is valued at approximately USD 410 million or approximately ⬠315 million on a 100% basis. This investment will increase Corio's profit for 2005 (excluding any valuations movements) by at least USD 7.9 million (based on an eight months ownership period) or, at current exchange rates, at least ⬠6 million or ⬠0.09 per share.
The subscription
The acquisition of 46.9% of the shares of the company (Akmerkez GYO) owning the shopping center forms part of the initial public offering of 49% of existing shares on the Istanbul Stock Exchange (ISE). The IPO is fully underwritten by Garanti Securities. The company has obtained the tax efficient Real Estate Investment Company (REIC) status in Turkey, which is broadly comparable with the fiscal investment status (Fiscale Beleggings Instelling) in the Netherlands. One of the conditions for retaining this tax status is that 49% of the shares are offered to the general public through an approved IPO on the Istanbul stock exchange. With the acquisition of a 46.9% stake in the company Corio will become the largest single shareholder. Corio will have one seat on the board of directors and in due course a second seat on the board of directors will be added. Following the acquisition of the 46.9% stake in Akmerkez GYO, Corio will acquire a 10% interest and a representation with one board member in Ãçgen, the management company providing full property and facility management for the Akmerkez complex. The trading in shares Akmerkez GYO will start on 15 April 2005 on the Istanbul Stock Exchange.
The project
The Akmerkez complex consists of the shopping center (34,680 m²), two office towers (30,194 m²), one residential tower (83 apartments, 20,125 m²) and a four-level car park (1,278 spaces). The company, Akmerkez GYO, owns 96.5% of the shopping center area, 28.9% of the apartments (25.2% of the area), 5.3% of the office area and 47.6% of the parking spaces. The company owns nearly 60% of the freehold land shares of the complex. The company therefore is responsible for formulating the strategy relating to the complex as well as its day-to-day management, which has been delegated to Ãçgen owned 100% by the current Akmerkez shareholders. The shopping centre Akmerkez has been a leading shopping center in the Istanbul retail sector since it opened in 1993 and has become a standard in itself. The tenants (246 units) include leading national anchors such as Beymen, Home Store, Vakko and Macro Supercenter and internationally known brands and retail chains such as Starbucks, Marks & Spencer's, Tommy Hilfiger, Massimo Dutti, Benetton, Puma, Lacoste, Mango and Zara. The shopping center also houses a four screen AFM cinema, which will have six screens by the end of 2005 and a 27 restaurants food court with a 1,600 person capacity. Approximately 433,400 people, mostly affluent, live or work within the primary catchment area of the center. Monthly 1.3 million people visit Akmerkez.
In 1996 the center received the highest award given by the International Council of Shopping Centres (ICSC), the International Design and Development Award. The center is also the first shopping center in the world to receive both the Best Shopping Center in Europe award and the International Design and Development award.
The leases
