Corio acquires fourth largest regional shopping center in France

At the 18th of March Corio has officially acquired Grand Littoral, a dominant super regional shopping center in Marseille. This second largest city in France offers more than average economic and demographic perspective. The shopping center has substantial reversionary potential, part of which can be realised in 2008. On top of this there are several long term development opportunities. The acquisition of Grand Littoral is a valuable addition to Corio’s portfolio.

Grand Littoral is the fourth largest regional shopping center in France, with total GLA of over 110,000 m². It is located in the 16th arrondissement, north of Marseille along the A7 highway between Marignane airport and the Marseille town center. The center dominates its surrounding area and benefits from an excellent visibility from the highways. The primary catchment area is estimated at 600,000 people, in a larger influence zone of 1.6 million people. Grand Littoral currently attracts 13 million visitors per year resulting in sales over €350 million.

The Net Initial Yield will amount to 4.35% at year-end 2008, including indexation and completion of reletting of the ‘fourth zone’. A positive impact of long term factors, as a more than average GDP growth in Marseille compared to the average of France, and the relative strong demographic growth in Marseille through continuing urbanization, will further increase the yield. On top of this Corio’s pro active management will show a positive impact on the results of the center:

Reopening in October 2007 of Zone 4. Currently 84% of this part of the centre is leased to prominent tenants as: New Yorker, Esprit, King Jouet, MEXX, Pull & Bear, Bershka, Sephora, Bata, Quicksilver, Soho. In this part also a new restaurant area will be located.

Reversionary potential. Rental contracts which expire will be relet or renewed against higher rents; in 2008 56% of rental contracts representing 52% of rent will expire. Reversionary potential is estimated at about 17%, when 2006 and 2007 rental transactions promise even more potential.

Improve rental mix. Restaurants (ca 10) spread over the centre will be moved to the new restaurant area in Zone 4. The then available space will be leased to new tenants with positive impact on the yield.

Restructuring and expansion. Plans are made for restructuring of about 6,000 m². There is also zoning potential to add about 22,000 m² GLA. Included in the acquisition price of the centre is about 13,000 m² adjacent land. In addition it is possible to buy another 80,000 m².

“We are highly satisfied to purchase Grand Littoral super regional mall. It reinforces the French portfolio with a sixth regional mall, an overall ownership of 355 000 m² and 20 major retail sites. Actions to deliver full potential of Grand Littoral are already launched or studied and will have its effects in the coming months and years,” says Frederic Fontaine, CEO of Corio France.

source: Corio