Klépierre pursued development of its shopping center portfolio at a very sustained pace throughout 2005, expanding its scope of ownership with acquisitions in Poland and Belgium, and trengthening its European management capability.
SHOPPING CENTER ACTIVITY BRISK IN 2005:
780 million invested, primarily in France, Italy and Poland
Klépierre pursued development in France, investing 200 million in 2005. The acquisition of Rennes Colombia, a mall measuring 20,215 m² of useable commercial retail floor area including an Inno supermarket, 4 mid-size retail units (Fnac, Habitat, Sephora and Super Sport) and 67 smaller retail outlets, was completed as part of an asset swap. The counterpart is an office building located at 280/282 Boulevard Saint Germain (Paris 7th). The extension of the Grand Marché in Quétigny, inaugurated in October 2005 and acquired at the very end of the year, added 8,625 m² to the original shopping center, including 1 mid-size retail unit and 45 smaller retail outlets.
This sustained acquisition program confirms the potential of the French market, as identified by Klépierre, which also offers the advantage of a well-adapted tax environment.
In Italy, Klépierre acquired 3 shopping centers for a total of 250 million, including the shopping malls Tor Vegata (Rome), de Lecce (Pouilles) and Assago (Milan). The latter, inaugurated last June, is the major extension of an existing center whose retail drawing power is already well established. It now offers 24,600 m² of useable retail commercial floor area, including 9 mid-size retail units and 87 smaller retail outlets, fully leased up, and a Carrefour hypermarket covering 25,000 m². Klépierre now owns 32 shopping centers in Italy, offering total useable commercial retail floor area of 273,865 m².
After the Czech Republic in 2003 and then Hungary in 2004, Klépierre further strengthened its position in Central Europe last year by acquiring key properties in Poland, the region's most important market. Under the terms of a memorandum of agreement dated May 20, 2005 with Plaza Centers (Europe) BV, Klépierre acquired 4 shopping centers in Poland on July 29, 2005, for a total investment of 203 million. The agreement also includes the acquisition in 2006 and 2007 of shopping center properties currently under development in Poland (projects are under way in Rybnik, Sosnowiec and Lublin), for a total estimated investment of 133 million; and in the Czech Republic (projects are under way in Prague and Pilzen), for a total estimated outlay of 87 million.
Since October 5, 2005 Klépierre owns the Louvain-la-Neuve shopping center in Belgium, the group's first investment in that country. The 34,500 m² shopping center is built on two levels and features 7 mid-size retail units, 90 smaller retail outlets and a UGC Cineplex with 13 screening rooms, for a total value of 157 million (49.9 million outlaid in 2005).
Overall, Klépierre added 9 shopping centers to its existing retail holdings, resulting in 719.6 million of outlay in 2005. It now owns 232 shopping centers, measuring a total of 1,873,261 m². These acquisitions will generate additional full-year net rent of 68 million. Based on their acquisition dates, mainly in the second half of 2005, they are expected to add some 19 million to lease income for the year just ended.
Marginal arbitrages in the portfolio
In 2005, the sale of shopping center assets totaled 58.5 million . Disposals included a 20.6% interest in SCOO (the holding company for the Blagnac, Saint-Orens and Noisy Arcades shopping centers) and 859 m² owned in the Lille Gambetta center, with no strategic value for the Group.
A fully controlled management network
Ségécé further reinforced its management network, buying out minority interests in its Hungarian subsidiary, and more recently in its Italian affiliate (January 5, 2006), as well as pursuing the construction of a European network that enables it to maintain direct and total management control over Klépierre's property assets in 10 countries. As part o