Review of operations: introduction
During the year under review, the focus on retail increased still further. The share of retail in the overall portfolio rose again to 92% (2007: 83%) through the disposal of the Dutch offices and industrial portfolio and the addition of a number of dominant centres or outlets in dominant centres.
By the end of 2008, the property portfolio was spread more evenly over the home markets: the Netherlands 33% (2007: 42%), France 34% (27%), Italy 19% (17%), Spain 8% (8%) and Turkey 6% (6%).
The first step towards development activities was taken during the year. An easing of FBI legislation made this possible from the summer of 2007. In January, CVO was formed and is now responsible for the management of the Dutch pipeline.
The changes in the property portfolio during the year, including our share in joint ventures in France and Italy and participating interests in Turkey, were as follows:
| |
Lettable area |
Theoretical annual rent |
Occupancy rate |
Value |
| |
(x 1,000 m2) |
(€ million) |
(%) |
(%) |
(€ million) |
| |
2008 |
2007 |
2008 |
2007 |
2008 |
2007 |
2008 |
2007 |
| Retail* |
1,355 |
1,21 |
356.5 |
315.8 |
97 |
97 |
5,321 |
5,069 |
| Offices |
140 |
391 |
35.7 |
74.7 |
95 |
93 |
395 |
900 |
| Industrial |
94 |
272 |
5.9 |
16.8 |
100 |
98 |
61 |
194 |
| Total* |
1,589 |
1,873 |
398.1 |
407.3 |
97 |
96 |
5,777 |
6,163 |
| Investments in pipeline* |
|
|
|
|
|
|
262 |
297 |
| Total* |
1,589 |
1,873 |
398.1 |
407.3 |
97 |
96 |
6,039 |
6,460 |
About 145,000m2 of gross lettable floor area was added to the retail portfolio in 2008. Annual rents increased by € 38.3 million through index-linking, rental increases in the existing portfolio, renovations and net acquisitions and disposals. The main acquisitions, handovers and openings of new projects were Grand Littoral in Marseille (France), Pieter Vreedeplein in Tilburg (Netherlands), the remaining 70% interest in Adacenter in Adapazari (Turkey), the IKEA branch next to Le Gru in Turin (Italy), a number of units in the Charras shopping centre in Courbevoie (France) and the Decathlon outlet at Cote de Nacre in Caen (France). In addition, the theoretical annual rents increased through the completion of the renovations of Quais d’Ivry in Ivry-sur-Seine (France), Capteor in Orgeval (France) and Eschmarke in Enschede (Netherlands). Restructuring of some properties is still in progress, as a result of which the occupancy of these properties varied between 88% and 100% at year-end 2008. In addition to the activities in the home markets described below, Corio also owns land in Sofia (Bulgaria), where a shopping centre with a gross lettable floor area of about 48,000m2 can be built. In view of the current market conditions, Corio has postponed the construction of this project. The expected investment was therefore not included in the pipeline.
The offices portfolio shrank by about 251,000m2 of gross lettable floor area in 2008, through the sale of the Dutch offices to White Estate Investment (WEI) for a total sum of € 650 million. Only a few offices (52,600m2) of strategic importance for the retail portfolio in the Netherlands were retained. At the same time, the remaining 30% share of Balzac in Courbevoie-La Défense was acquired and this office property is now wholly-owned by Corio. Corio plans to sell the properties in the French offices and industrial portfolio, with a total gross lettable floor area of 167,400m2, in the course of the coming years on an individual basis (i.e. not as an entire portfolio). In addition to the activities in the home markets described below, Corio also has an office property in Boblingen (Germany) with a gross lettable floor area of 13,600m2. We also intend to sell this property.
The industrial portfolio was also reduced by 178,000m2 as a result of the above sale. The industrial portfolio now consists only of properties in France, for which a sales strategy exists.
See also:
Geographical spread by value detail (%)
Source: Annual Report 2008, Chapter Review of operations, page 38 (PDF, 2,1 MB)
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