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French Klépierre has no acquisition plans, to focus on organic growth - Jestin

hoog-cath05.jpg Hoog Catharijne © Klépierre
creteilsoleil1.jpg Créteil Soleil © Klépierre

Paris-based shopping centre REIT/SIIC Klépierre has no plans for external acquisitions but will focus on organic growth and the best locations going forward, its Chairman Jean-Marc Jestin says.

Asked on Bloomberg television after the release of third quarter figures whether the group has any external takeovers in view, Jestin said: "No. Going forward we aim to focus on organic growth and having the best-quality centres in the best locations."

Klépierre in April lodged a bid for UK retail REIT Hammerson at a level 45% above the target's share price at the time. However it met with fierce opposition from the latter's board, which was in the middle of its own takeover - of smaller peer Intu. The French group declined to raise its bid.

For the first nine months of 2018, Klépierre said it made €575m in disposals, €223m of them in 3Q18, and last quarter reduced net debt by €274m to €8.9bn, with net cost of borrowing at 1.6%. Shopping centre net rental income came in at €823.7m, up 3.1% like for like and 2.3% on a current basis. Total revenues rose 2.0%yy to just over €1bn.

"Klépierre’s performance in the first nine months of the year confirms the relevance of our strategy in a changing retail landscape," Jestin said in the release. "Our operational excellence, combined with our portfolio of leading malls, allowed us to keep outperforming the market. We continued to bring the best of retail into our malls through buoyant leasing activity, which ensures dynamic rental growth. 

"Since the beginning of the year, we have continued to streamline our portfolio at a steady pace while further lowering the company’s leverage and buying back our shares. Going forward, we plan to accelerate our investment in our assets to further enhance their positioning in their catchment areas and deliver sustainable growth, while maintaining our rock-solid balance sheet."

In November, as planned, Klépierre expects to open the South Mile redevelopment phase of its Hoog Catharijne mall, the largest in the Netherlands, connected to the station of the city of Utrecht. The total investment for the centre is €438m at a yield on cost of 6.4%. As well, the extension of Paris region's Créteil Soleil is on schedule and should be completed by the end of 2019. It is a €134m investment at a yield of 5.7%.

Disposals to date included three centres in Italy - in Milan and Brescia, plus two in the Hungarian capital of Budapest.

Up to 19 October this year, Klépierre repurchased 4,184,527 of its shares for a total investment of €136m. Including stock bought back in 2017, Klépierre has invested €486m of the €500m program announced in March 2017. French listed groups are not required to report earnings figures for third quarter, but Klépierre said it expects this year to generate net current cash-flow per share of at least €2.62.

Klépierre managed a portfolio valued at €24.6bn at 30 June, comprising large shopping centres in 16 countries in continental Europe which together host 1.1bn visitors per year. It holds a controlling stake in Steen & Strøm (56.1%), Scandinavia’s number one mall owner and manager.

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