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French mall REIT Klépierre boosts 2017 net to €1.5bn, raises div., guidance

Jean-Marc Jestin © Klépierre

French shopping centre REIT/SIIC Klépierre reported a slight rise in net income for 2017 to €1.50bn from €1.48bn a year earlier, plus a 7.4% climb in net current cash-flow. Proposing a dividend of €1.96 per share, the firm said it has confidence in 2018 and raised guidance.

With total assets of €25.15bn at year end, up around €800m over the year, Klépierre said EPRA NAV rose 7.8% to €39.60 after a share buyback program of €382m over 2017. In addition it made disposals of €568m and reinvested €286m in acquisitions. Net current cash-flow per share rose 7.4% to €2.48 last year, outpacing initial guidance, and it forecast €2.57-€2.62 for 2018. Shopping centre net rental income climbed 3.3% like-for-like, outperforming indexation by 260bp.

Board Chairman Jean-Marc Jestin, who took over at the start of 2017 from long-time predecessor Laurent Morel, commented: "In a fast-changing retail environment, the remarkable commitment of our teams produced yet another record year for Klépierre." This performance is the result of the firm's strategy to constantly enhance the quality of its pan-European mall portfolio. "Our exceptional operating indicators, including particularly a dynamic leasing deal flow, combined with our disciplined financial policy, allow us to propose a significant 7.7% dividend increase, further demonstrating our ability to create shareholder value year after year," he added.

Like other shopping mall firms in Europe - notably REIT/SIIC peer Unibail-Rodamco but also Finland's Citycon - Klépierre has met investor resistance due to concerns over the impact of internet shopping on mall lettings. Share prices have therefore not kept pace with general stock market performance. But Klépierre noted that since 2012 it has acquired or developed over €10bn of assets, divested around half this, but still boosted its portfolio value by some 45%. Klépierre is now present in nine markets. Apart from its home market France, these are Spain, Portugal, Italy, Germany, Netherlands, Sweden, Norway, Denmark and the Czech Republic.

Jestin said that the successful opening last year of the extension of the Val d`Europe east of Paris and the ongoing redevelopment at one the most frequented Netherlands malls, Hoog Catharijne in Utrecht, pave the way for Prado, a unique mall to open in Marseille this spring. "These achievements, like our 2018 guidance, underscore our confidence in the future and our ability to create places that incite people to shop, meet and connect," he said. To reflect its visions of a mall as local hubs in growing population centres Klépierre, as a result, is introducing a new tagline Shop.Meet.Connect.

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