Klepierre, a French mall owner, is expanding in Europe by acquiring Rome's RomaEst shopping centre for over 200 million euros. This deal, finalised last week, strengthens its presence in Italy, its second-largest market. RomaEst, Italy's sixth most visited mall, attracts 10 million visitors annually. Klepierre's strategy focuses on consolidating holdings in major European cities while selling smaller assets. This acquisition is expected to boost Klepierre's earnings and financial performance without affecting its debt metrics or ratings.
Klepierre, the French mall owner known for housing tenants like Zara and H&M, is expanding its footprint in major European cities by acquiring Italy's RomaEst shopping centre. The deal, which will be finalised last week, is valued at over 200 million euros (USD 217 million), according to Chairman Jean-Marc Jestin. This acquisition reinforces Klepierre's presence in Italy, its second-largest market after France.
RomaEst, located in Rome, is the second-largest shopping centre in the Italian capital, following Porta di Roma, which holds the title of the largest mall in Italy. RomaEst is also Italy's sixth most visited shopping centre, attracting 10 million visitors annually. This purchase marks Klepierre's second major acquisition within six months, following the acquisition of O'Parinor in Paris.
Klepierre, which operates 70 shopping centres across 10 countries in continental Europe, has been focusing on consolidating its holdings in the largest 40 European cities. This strategy includes selling off smaller, less strategic assets to reinvest in prime locations. Jestin highlighted that while many competitors are selling off assets, Klepierre is actively acquiring new ones, leveraging its strong capital base and proceeds from disposals to fund these purchases.
The acquisition of RomaEst is expected to be accretive to Klepierre's EPRA earnings, which is a key measure of a company's underlying operating results, from the first day. The company also anticipates a high annual cash return from this investment, although specific details were not provided.
Despite the significant investment, Jestin noted that the impact on Klepierre's debt metrics would be minimal, and the company's debt ratings with S&P and Fitch are expected to remain unchanged. Klepierre's robust financial position allows it to make these strategic acquisitions without compromising its economic stability.
In the first quarter of the year, Klepierre reported a 4.3% increase in retailer sales, which was slightly below the 5.3% rise posted by its peer Unibail-Rodamco-Westfield in continental Europe. This performance underscores the competitive landscape of the European shopping centre market and the importance of strategic acquisitions to maintain and enhance market position.
In conclusion, Klepierre's acquisition of RomaEst represents a strategic move to strengthen its portfolio in key European markets. By focusing on large, high-traffic shopping centres in major cities, Klepierre aims to enhance its operational efficiency and financial performance. This acquisition aligns with its strategy of divesting smaller assets to reinvest in more lucrative properties. The minimal impact on its debt metrics and steady debt ratings further demonstrate Klepierre's strong financial management. As the European shopping centre market remains competitive, Klepierre's proactive approach to acquisitions could provide a significant advantage in maintaining its market position and driving future growth.
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