In November 2004, Klépierre agreed to buy two shopping malls adjoining Leclerc hypermarkets, located in the northwest and southeast of the Greater Toulouse Area, in Blagnac and Saint Orens. These two shopping centers, both located in extremely vibrant retail zones, show significant development potential.
Today, Klépierre is seizing the opportunity to acquire full control over these locations by acquiring ownership of the two hypermarket properties as well as mall related extension projects that will open within 18 months.
Consistent with its stated strategy of intervening further upstream on and reinforcing the development side, Klépierre will oversee the two extension projects via a real estate development contract signed with the seller. In particular, Ségécé will be working on behalf of Klépierre to lease up the two sites.
Currently, the Blagnac shopping mall offers 19,206 m² GLA. It features 68 retail outlets that adjoin a Leclerc hypermarket with 15,400 m² of sales floor area. The extension will add another 11 300 m² to the existing configuration. It will allow for the addition of a 1,100-m² GLA mid-sized unit H&M. All required permits having been obtained, the work has commenced and the extended mall is scheduled to open in March 2009, with net rents of €6.1 million expected at this time.
Currently, the Saint Orens mall measures 10,797 m² GLA, including 56 retail outlets adjoining a Leclerc hypermarket with sales floor area of 14,600 m². The extension will add another 11,100 m². It will also allow for the addition of a 1,070-m² GLA mid-sized unit H&M. Again, the required permits have already been obtained, and work has just commenced. The extension is scheduled to open in September 2008, with net rents of €4.6 million expected at this time.
On the hypermarket side, Klépierre takes over the two leases signed with Leclerc member Mr. Rémy Nauleau. They feature conventional lease terms that include an indexlinked rent adjustment clause.
The total investment for the complete transaction, transfer duties included, is €250.7 million, of which Klépierre's share is €201.1 million. Cardif Assurance Vie, which was already a shareholder alongside Klépierre (with a 20% interest) in the company that owns the two existing centers, is also participating in this new investment.
The payment made by Klépierre today totaled €138.4 million. The remaining balance is payable gradually as the work advances.
The total amount of full-year net rents expected from this transaction is €16.8 million (group share of €13.6 mln), of which €6.1 million (group share of €5.4 mln) will be collected as of the acquisition date.
"This transaction is part of our broader strategy as a global player in commercial real estate," commented Michel Clair. "It allows us to offer a solution that makes sense for the operator of the two hypermarkets, allowing him to disengage from the real estate aspects while ensuring the long-term commitment and presence of a partner able to efficiently manage the shopping center as a whole and optimize its development."