MRM, a real estate investment company specialising in retail property, today announced the signing of an agreement with Altarea and SCOR S.E. concerning the acquisition from Altarea of two shopping centers for a total 90.4 million Euro (including transfer taxes). This acquisition is subject to a variety of conditions precedent. If it goes ahead, it would increase the value of MRM’s asset portfolio by more than 50%. The two properties, located in Flins-sur-Seine (Yvelines) and Ollioules (Var), are both attached to Carrefour hypermarkets and are leading shopping centers within their catchment area. These are successful properties combining yields and potential for value creation.
“We are delighted to present today a proposed significant acquisition that will have a transformative effect on MRM”, said François de Varenne, Chairman of the Board of Directors of MRM. “The acquisition of these two shopping centers would mark a real change of dimension for MRM, representing an increase of more than 50% in the value of our asset portfolio. Altarea is a key player in the real estate industry. Its entry in the share capital of MRM is a mark of recognition of our know-how and confidence in our ability to create value.”
“Having gradually refocused our portfolio on retail properties, enhanced the value of our properties by means of an apt investment plan and then over the last two years stepped up our active portfolio management under complex conditions, this acquisition would open up new prospects, allowing us to roll out our proactive management policy on the basis of a larger portfolio”, added François Matray, Chief Executive Officer of MRM. “It would enable us to aim for annualised net rents of over 16 million Euro and make us more profitable thanks to better absorption of fixed costs.”
Significant increase in MRM’s portfolio
This proposed acquisition of the regional shopping center in Flins-sur-Seine, Yvelines, and the Carrefour Ollioules shopping center in the Var region for a total of 90.4 million Euro (including transfer taxes) would enable MRM to change dimension. While also extending its geographical presence in two fast-growing regions, the acquisition would significantly increase the size of its portfolio by 52% from 163 million Euro to 247.3 million Euro pro forma on the basis of values excluding transfer taxes as at 30 June 2022.
This extension of the portfolio would result in a sharp increase in MRM’s annualised net rents from 9.5 million Euro to 15.0 million Euro pro forma as at 30 June 2022, thereby increasing MRM’s target annualised net rents from 10 million Euro to 16 million Euro. The increase in rental income would have a very positive impact on MRM’s net operating cash flow generation and enable it to improve its profitability thanks to better absorption of fixed costs.
Positioned as market leaders within their catchment area and with physical occupancy rates of 97% and 92% respectively as at 30 June 2022, the Flins-sur-Seine and Ollioules shopping centers present net yields slightly higher than the current total yield for MRM’s portfolio. Furthermore, both present potential for value creation, which would give MRM the possibility of rolling out its asset management expertise (refurbishment, partial redevelopment, proactive rental management, changes in the retailer mix).