Corio Accelerates Asset Sales to Finance Development Projects

Corio NV, the largest Dutch real-estate company, said it will increase asset sales fivefold this year to help finance a 2.5 billion-euro ($3.3 billion) pipeline of shopping-center projects.

The company will sell 670 million euros of properties, mostly in the Netherlands and France, compared with the 136 million euros raised last year, Utrecht-based Corio said today in a statement. The company today reported a 6.4 percent rise in 2011 earnings excluding items as acquisitions in preceding years boosted rental income.

The asset sales accompany efforts by Chief Executive Officer Gerard Groener to preserve cash, including offering to pay a 2.76-euro dividend with shares and slowing or halting projects in Italy and Turkey. He is focusing the company on large shopping centers, where retail sales have been stronger than the national average in countries where Corio owns property.

“In the context of an uncertain macroeconomic environment, our focus is on preserving the capital structure of Corio,” the company said.

Corio last year sold Liekeblom in the Dutch town of Leek and Paris’s Passage Provence Opera. That cut 12.2 million euros from net rental income. Corio said today it’s already in talks to sell 150 million euros of properties.

Earnings excluding changes in asset values and deferred tax, known as direct result, increased to 267 million euros ($349 million), or 2.91 euros a share from 251 million euros, or 2.88 euros, a year earlier.

2012 Forecast

Earnings excluding items, known as the direct result, will probably fall “slightly” in 2012 because of the proposed scrip dividend, which is paid in shares.

Net asset value rose 2.5 percent from Sept. 30 to 47.15 euros a share, the company said. Net rental income rose 7.8 percent to 396.5 million euros in the quarter.

Corio made acquisitions worth 1.25 billion euros in 2010 and its purchases totaled 159.1 million euros last year, chiefly the Saint-Jacques center in Metz, France. These boosted net rental income by 28.8 million euros last year.

Average rents rose 1.9 percent last year, excluding the impact of acquisitions and asset sales. Corio signed 329 new leases and renewed another 173 at 6.6 percent higher rents.

New developments opening in the Netherlands, including Nieuwegein, Heerhugowaard and Spijkenisse, plus extensions to existing centers generated an additional 8.9 million euros in rent.

Net income fell to 218.2 million euros, or 2.38 euros, from 375.7 million euros, or 4.31 euros, a year earlier when the company’s real estate appreciated by significantly more.

The results were released after the close of trading. Corio fell 17.5 cents to 36.525 euros in Amsterdam today. The shares advanced 12 percent in the past three months, exceeding the 10 percent gain for the FTSE EPRA/NAREIT Developed Europe Index of real estate shares.

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