For the moment, this framework agreement mainly concerns centres in France and Spain, together with some in Portugal, Greece and the Czech Republic. It will be extended later to other European countries where Carrefour is established. Over 150 centres are concerned, at a price of about € 1.5 billion. The actual handover is to take place by 31 January 2001.
The partnership set up by this agreement includes joint management of the real estate of the whole sites and accelerated development of new projects in Europe.
For the Carrefour Group, this operation fits in with the reduction of debt load. Carrefour will continue to own the buildings of its hypermarkets and supermarkets, while freeing extra financial means for developing its core business outside France. It will enable Carrefour to continue its expansion in shopping centres in Europe with a group of professional specialists in commercial properties, who have already been partners for a long period and with whom significant commercial synergies will be implemented.
For Klépierre, this acquisition constitutes a major expansion of its shopping malls division, which will make up about two thirds of its assets. Klépierre will thus become one of the two major real estate companies in continental Europe specialized in this field. Thanks to its links with Carrefour, the leading retailer in Europe, its potential for expansion will be strengthened. Ségécé, for its part, will be the biggest management company for shopping centres in continental Europe.
The profitability of the assets acquired is comparable to that of Klépierre's present holdings of shopping centres (appraisal value). It offers prospects of development strengthened by the extra impetus given by the partnership with Carrefour. There will also be the positive impact of Klépierre's increased use of leverage.
In accordance with its objectives, Klépierre will finance this purchase mainly through new loans, remaining under a 50% loan to value ratio. The rest of the funding for the acquisition will be provided via equity contributions by several financial institutions, and via a public share issue, depending on market conditions.
By setting up the first partnership in continental Europe between a retailer and a real estate company, Carrefour and Klépierre are creating favourable conditions for ambitious levels of expansion in their respective activities in the continent.