Carrefour agrees on €2 billion purchase of malls from Klepierre
France-based retailer Carrefour said it will be buying €2 billion or $2.75 billion worth of shopping malls from Klepierre, allowing it to have more control of the sites near its hypermarkets, Bloomberg reported. Carrefour, the largest retailer in France, is an operator of supermarkets, hypermarkets, frozen food, discount and cash and carry stores in Europe, the Americas and Asia. Klepierre is a shopping center owner and manager. It has operations in continental Europe as well as office buildings in Paris. The deal covers 127 shopping malls in Europe.
Citing a statement from Carrefour, the report said the French retailer will form a company that will combine the sites located in France, Spain and Italy with its 45 shopping centers in France. The acquisition will be funded through equity of €1.8 billion and debt of €900 million, the report said. Carrefour will hold a 42% stake in the unit while institutional investors will hold the remaining stake. The report noted that the unit is set to have gross annual rental income of around €180 million.
Carrefour did not push through with its plans to spin off its property assets two years ago and is now pouring money in real estate in a bid to make its largest store format more appealing to customers as shops located in city centers and online provide stiffer competition, the report said. For the first time in over two years, its French hypermarket sales increased in the third quarter as the retailer's turnaround continues to gather steam.
In its statement, Carrefour said it plans to recreate and environment which benefits its customers by integrating all components of each commercial site. The retailer added, "Its success rests on the coordinated renovation, modernization and extension of its sites."
In July last year, Klepierre said it intended to sell offices by the end of this year to raise €1 billion so it could concentrate on malls, the report said.