Regulatory News:
Klemurs (Paris:KMU)
| In millions of euros |  | 01/01/07 through 12/31/07 (a) |  | 4th quarter 2007 |  | 12/08/06 12/31/06 Published |  | 01/01/06 12/31/06 (b) Pro forma |  | Change 07/06 (a/b) |
| Lease income | 23.5 | 6.1 | 0.9 | 2.9 | ns | |||||
o/w Klémurs | 21.7 | 5.5 | 0.9 | 2.9 | ns | |||||
| o/w Cap Nord | 1.8 | 0.6 | 0.0 | 0.0 | ||||||
| o/w constant portfolio | 3.1 | 1.3 | 0.9 | 2.9 | + 5.3% |
Rents in line with expectations
For the year ended December 31, 2007, consolidated rents totaled 23.5 million euros, of which 6.1 million euros were generated in the fourth quarter. They can be broken down as follows:
- 18.6 million euros in rents from assets operated by Buffalo Grill
- 3.1 million euros in rents from historic assets, i.e., the Parisian department stores Truffaut in the 13th arrondissement and the BHV located on Rue de Flandres, as well as the retail outlets on Rue Candé in Rouen.
- 1.8 million euros in rents from assets owned by the Cap Nord company and acquired on March 29, 2007.
On a constant portfolio basis, rents increased by 5.3%, reflecting the impact of index-linked rent adjustments (+7.05%), but only with respect to historic assets, since the adjustments based on the new index had already been made for rents from the 128 Buffalo Grill restaurants added to the portfolio on December 18, 2006.
The financial occupancy rate for the entire portfolio was 99.4% on December 31, 2007, while the default rate was 0.1%.
2007 acquisitions total almost 65 million euros
In March 2007, Klémurs acquired a portfolio held by Cap Nord containing 14 assets integrated into retail areas of the first rank, located on the outskirts of major French metropolitan areas, for a total amount of 37.2 million euros. With this acquisition, Klémurs began the process of diversifying its portfolio, adding in particular the property assets of Mondial Moquette (58% of the transaction in terms of value), as well as those of L'Univers du sommeil, Gemo, Heytens, King Jouets, Autour de bébé, Jean Delatour, Kiloutou and Animalis.
In connection with the partnership entered into with Buffalo Grill in August 2006, Klémurs paid 16.8 million euros to acquire the property assets of 8 Buffalo Grill restaurants located in Saint-LÃ', Bar le Duc, Gien, Montauban, Morlaix, St Pierre les Elbeuf, Roncq - Lille and Dreux, bringing to 136 the number of Buffalo Grill properties owned outright (51) or through property finance leases (85).
Finally, Klémurs acquired two retail property assets from Sephora in late December 2007, located in the primary retail streets of Metz and Avignon, for an investment of 10.3 million euros.
The acquisitions made in 2007, for a total outlay of 64.3 million euros, added only marginally to rents for the year, with the exception of the Cap Nord properties.
New agreements hold future promise
- Extension of the partnership with Buffalo Grill
After 18 months in partnership, Buffalo Grill and Klémurs decided to extend their agreement on the restaurant chain's development, initially entered into for 5 years, to 30 new sites. Klémurs will now support Buffalo Grill in its development over 10 years, and will have preferential rights to acquire without limitation in terms of number. More than 60 sites have already been proposed to Klémurs, of which nearly a third will open in 2008.
- Agreement sealed with Défi Mode
In December of 2007, Klémurs entered into a partnership agreement with the retailer Défi Mode, whereby Klémurs will become the owner of 112 retail property assets (99,000 sq.m.) in parallel to the Vivarte group's acquisition of the clothing retailer's operations.
These acquisitions will be carried out in two phases: 87 existing assets (79 owned outright and 8 via property finance leases) will be acquired in the course of the second quarter 2008, and 25 assets currently under construction will be acquired outright by June 30, 2009 at the latest. The corresponding investment totals 153 million euros, for net expected rents of 9.1 million euros.
With respect to D2B and DBM5 (the real estate holding companies owned by Défi Mode's founding shareholders), Klémurs has been granted a preferential right for a 5-year period over all future disposals of existing sites, and for a 6-year period over all future developments. In the final days of 2007, the exercise of this right resulted in the acquisition outright of 18 additional sites: 1 existing Défi Mode outlet covering 1,410 sq.m. and 17 assets currently under construction (10,962 sq.m.), which will be operated by the Vivarte group as La Halle outlets. The acquisition will be definitive when the outlets open for business, and by June 30, 2009 at the latest. The total investment will reach 15.5 million euros, for expected net rents of 1 million euros.
- Targeted acquisition projects
Klémurs also signed a seller's promise on the acquisition of 15 retail assets, two of which are currently under construction, located in 3 retail areas: Rochefort-sur-Mer, Avranches and Messac. The 14,894 sq.m. of GLA house a number of diverse retailers, including La Halle, Aubert, Mobalpa, Gemo, La Générale d'Optique and Casa. The definitive acquisition of existing sites will be completed between now and March 31, 2008. The total amount invested is 19.3 million euros, for expected net rents of 1.2 million euros.
Portfolio growth target confirmed
2007 allowed Klémurs to confirm the relevance of its strategic positioning as the real estate partner of major retailers. Together with Klépierre, Klémurs demonstrated its ability to offer retailers value-added, global and long-term solutions that enable the latter to focus their resources on their core business and step up their own development.
In 2008, Klémurs expects rents to show very substantial growth in light of the 200 million euros worth of new agreements entered into in late 2007.
Upcoming releases:
February 5, 2008 2007 annual earnings
April 24, 2008 2008 first quarter revenues
