Eurocommercial Properties NV announced today that it has entered into contracts to acquire the first two of its planned purchases for the 2002/3 financial year: Centre Commercial Les Trois Dauphins, Grenoble in France and HÃ¤lla Shopping Centre, VÃ¤sterÃ¥s in Sweden.
Centre Commercial Les Trois Dauphins, Grenoble, France
Les Trois Dauphins is a prime retail landmark in the city centre of Grenoble. The property occupies an island site next to Galeries Lafayette close to La Place Grenette and has a lettable area of approximately 16,500mÂ² together with 180 car spaces.
The gross lettable area of the retail accommodation is about 8,600mÂ² and there is 4,400mÂ² of residential accommodation, 1,050mÂ² of offices and an IBIS Groupe Accor hotel of 77 rooms which occupies an area of 2,455mÂ². IBIS occupy the hotel under a conventional lease, not a management agreement.
62% of the income derives from the 3 retail tenants FNAC, C&A and McDonalds at an average rent of â‚¬132 per mÂ². The 63 apartments provide 22% of the income at an average rent of â‚¬89 per mÂ² and the remaining 16% of income derives from the hotel, car parking and ancillary offices.
The net initial yield is about 7% on a total acquisition cost of â‚¬23 million and it is thought that the low rents offer good growth potential.
HÃ¤lla Shopping Centre, VÃ¤sterÃ¥s ,Sweden
HÃ¤lla shopping centre, forms part of the HÃ¤lla retail park fronting the E18 motorway on the edge of VÃ¤sterÃ¥s, a major Swedish provincial city with a population of 130,000 about 120km west of Stockholm. The catchment area extends to approximately 350,000 people.
The property has just been fully refurbished and extended to provide 14 shops with a total lettable area of 8,000mÂ². Major tenants include Hennes & Mauritz, Lindex, Kapp Ahl, JC and Stadium, all let on new leases at market rents averaging â‚¬164 per mÂ². The centre re-opens for trading at the end of this month.
HÃ¤lla is the dominant out of town retail location for VÃ¤sterÃ¥s and other major operators on the retail park include an adjoining ICA Maxi hypermarket, an IKEA and a large ON OFF electrical store. The total cost of acquisition is almost â‚¬15 million to show a net initial yield of about 8%.
Further acquisitions in Italy, Sweden and France, for which terms have already been agreed in principle will be announced as soon as binding contracts are signed.
Mr Jeremy Lewis, Chairman said that Eurocommercial Properties is being cautious in its property acquisitions concentrating on non 'trophy' buildings, leased at sustainable rents. The retail sector of property investment markets in France, Italy and Sweden, in which the Company has 90% of its assets, is holding up remarkably well but growth in consumer spending is slowing and every property purchased is expected to have either a good initial yield or significant growth potential.
(source: Eurocommercial Properties)