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Klépierre — M&A Activity 2015
Dec 14, 2015
1464_iss_2015-12-14_da1896ab-dba0-412c-aa68-740a2fb80522.pdf
M&A Activity
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KLEPIERRE ENTERS INTO AN AGREEMENT TO ACQUIRE OSLO CITY, DOWNTOWN OSLO'S LEADING SHOPPING CENTER
Paris – December 14, 2015
Klépierre announces that Steen & Strøm, its 56.1% controlled Scandinavian subsidiary, has signed a sale and purchase agreement, jointly with Entra, to acquire Oslo City, a retail and office complex located in the very heart of Norway's capital city, from DNB. The Oslo City shopping center attracts more than 10 million visitors a year and generates among the highest retailer sales per sq.m. in Scandinavia. This acquisition complements Klépierre's strong footprint of leading shopping centers in Scandinavia.
The Oslo City building covers 33,000 sq.m. of retail space and 34,000 sq.m. of office space and offers 340 parking spaces. Steen & Strøm and Entra – a prominent real estate company focusing on office buildings in the main Norwegian cities and listed on the Oslo stock exchange1 with the Norwegian State as the largest shareholder – are jointly buying this asset from DNB, Norway's largest financial services group.
Both partners will acquire the holding company that owns Oslo City for a total consideration of 528 million euros. 2 Steen & Strøm and Entra will then demerge the property into two separate retail and office assets in 2016. Following the demerger, Steen & Strøm will fully own the shopping center and half of the parking spaces for a net investment of 344 million euros2 (3.3 billion NOK). Entra will own the office premises and the other half of the parking spaces.
Directly located in Oslo's main transportation hub, Oslo city shopping center features the highest footfall in Norway.
The complex is located in a very dense urban area in the immediate vicinity of the Bjorvika office district, Oslo's new Central Business District, and very close to Karl Johans gate, Oslo's main pedestrian retail street. Situated in Oslo's main transportation hub with direct accesses to both Oslo's central railways and bus stations, it is highly accessible. Oslo City also has a dedicated subway station (Jernbanetorget – 5 lines) and light rail stops. Large transportation networks, which are currently being built, will reinforce Oslo City's strategic location.
The Oslo urban area counts more than 1 million inhabitants with the fastest growing demographic growth forecast (its population is expected to grow3 by 30% by 2040). In addition, its GDP per capita is one of the highest in Norway, while its unemployment rate is among the lowest in Europe.
1 Ticker ENTRA
2 Based on the NOK/EUR exchange rate of 9.47 as of December 10, 2015 – excluding transaction costs
3 Source : Eurostat
Strong value creation potential ahead
Oslo City, a powerful, fully-occupied retail magnet spread over 33,000 sq.m for shoppers and brands, will add approximately 17 million euros to Steen & Strøm's net rental income4 on an annual basis. It features 76 shops and 8 mid-size units. With average sales per sq.m. reaching 13,000 euros, 5 most units operating in the shopping center rank among the most profitable of their respective network in Norway. Retailers present in the shopping center include leading national, regional and international brands - such as H&M, Superdry, Victoria's Secret, M.A.C, Apple, Clas Ohlson, Cubus, KappAhl, Lindex, Kusmi Tea, Oliviers & Co, and Starbucks. It also hosts a Vinmomopolet and a Meny supermarket.
Klépierre will fully deploy its retail know-how to extract additional value and accelerate like-for-like rental growth through the implementation of already identified re-tenanting, specialty leasing, and marketing actions.
This acquisition will reinforce Klépierre's leadership position in Scandinavia, where it currently operates a 3.5 billion euro6 portfolio of 21 shopping centers. Klépierre will also strengthen its presence in one of the most dynamic and wealthiest capital cities in Europe.
Closing expected by year-end 2015
Steen & Strøm will be buying 67% of the Oslo City holding company for 344 million euros, and Entra will acquire the remaining 33%.
Steen & Strøm, will finance 53% of the acquisition in equity through a capital injection of its shareholders – Klépierre and APG, proportionate to their existing stakes – and 47% through external debt and available cash. The impact of the transaction on Klépierre's consolidated Loan-to-Value will be limited to circa 50 bps.
The closing of the transaction is expected to occur by year-end 2015.
4 Based on net rental income projected for 2016
5 Excluding MSU (> 750 sq.m.).
6 Value excluding duties, total share, as of June 30, 2015.
ABOUT KLEPIERRE
A leading shopping center property company in Europe, Klépierre combines development, rental, property, and asset management skills. Its portfolio is valued at 21.9 billion euros on June 30 2015. It comprises large shopping centers in 16 countries of Continental Europe. Klépierre holds a controlling stake in Steen & Strøm (56.1%), Scandinavia's number one shopping center owner and manager.
Klépierre's largest shareholders are Simon Property Group (20.3%), world leader in the shopping center industry and APG (13.6%), a Netherlands-based pension fund firm. Klépierre is a French REIT (SIIC) listed on Euronext ParisTM and Euronext Amsterdam included the EPRA Euro Zone and the GPR 250 indexes. Klépierre will be included in the CAC 40 index effective December 21, 2015. Klépierre is also included in several ethical indexes - DJSI World and Europe, FTSE4Good, STOXX® Global ESG Leaders, Euronext Vigeo France 20 and Eurozone 120 - and is a member of both Ethibel Excellence and Ethibel Pioneer investment registers. Klépierre is also ranked as a Green Star by GRESB (Global Real Estate Sustainability Benchmark). These distinctions mark the Group's commitment to a voluntary sustainable development policy.
For more information, visit our website: www.klepierre.com
AGENDA
February 9, 2016 2015 Full year earnings (press release after market close)
April 28, 2016 2016 first quarter revenues (press release after market close)
INVESTOR RELATIONS CONTACTS
Vanessa FRICANO – + 33 1 40 67 52 24 – [email protected] Julien ROUCH – +33 1 40 67 53 08 – [email protected]
MEDIA CONTACTS
Aurélia de LAPEYROUSE – + 33 1 53 96 83 83 – [email protected] Nathalie BAUDON – + 33 1 53 96 83 83 – [email protected]
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This press release is available on Klépierre's website: www.klepierre.com