the dual retail & real estate development model: alcudia

The Dual "Retail & RealThe Dual "Retail & Real Estate Estate Development"Development" Model: Model: AALLCCUUDDIIAA

9-10 June 2008

Investor Day

J. EHRMANN

Executive Managing Director, Real Estate & Expansion

2IINNVVEESSTTOORR DDAAYY 0088

Groupe Casino’sreal estate

development strategy

2Solo

While more complex, the dual model is also more sustainable for the retailing business and creates more value for the Group

1Dual

3Solo

Real Estatedevelopment

France (Alcudia)and emerging markets

Alcudia

Mature markets (France) & precision retailing

Diversity of formatsFast/Simple/Targeted

Innovative real estate development projects

Financialengineering

While more complex, the dual model is also more sustainablefor the retail business and creates more value for the Group

Retail development


Hyp

Hyp

Hyp

Housing

Stand-alone hypermarket

Offices

Supermarket

MallShopping centre



HypMall

Hyp

Hyp


Hyp

Housing


Offices

Supermarket

MallShopping centre


Mall

Mall

Hyp

Hyp

Hyp

Mall


Hyp

Housing


Offices

Supermarket

MallShopping centre


Mall

CCMall

Mall

Hyp

Hyp

Hyp


Hyp

Housing


Offices

Supermarket

MallShopping centre



Retail property development creates value because it is closer to retailing than to a property leasing business

Aligning mall merchandising with today’s shopping trends

Attracting new banners, capable of generating additional footfall

Optimising rental income/organic growth

Managing shopping centre events

+Retaildevelopment

Food retailing is at heart a flow business

Traffic is directly correlated with a store’s offering and shopper appeal

Traffic is stimulated by the amount and quality of the offering

The impact of critical mass far offsets any cannibalisation

Stand-alone stores can be threatened from above by a new mall and from below by a niche retailer

Critical mass in shopping centres is a key business driver


Volume

Square metresCustomer flowsRevenuesMargin

Assetvalue

465,000 sq.m of additional retail space

Assets built

AlcudiaAlcudia

The Dual Model: the Alcudia programme

SCOPE: 109 CENTRES


Venezuela

Colombia

Argentina

Brazil

Uruguay

Thailand

Vietnam

The Dual Model: international development



Gainsif disposals

15 projects 16 projects

Assets

Assets built

or

“Solo” Real Estate Development: an opportunity to leverage our real estate expertise outside the group


Which demands • Expertise

• People

• Financial engineering

OPCIIPO/REIT

LandLandbank

DevelopmentRetail park

Co-developmentOffices/Hotels

LandParking lots

Property managementProject owner

The Dual Model: an ambitious, complex strategy


Actively managing assets every day, to capture all of the centres’ reversionary potential

Enhancing the appeal of our shopping centres in France by doubling their retail space over the next five to seven years

Growing the real estate development business in France by creating new development structures

Partnership with Whitehall for real estate development projects in Eastern Europe

Leveraging the dual model to develop our banners in Thailand, Vietnam, Venezuela and Colombia

The group’s property development strategy is focused on creating asset value

Several paths to value creationby capitalising on the expertise of our teams


Constantly manage the portfolio to sell and lease back mature property and acquire assets with high value creation potentialUse sophisticated, innovative financial engineering techniques as needed

Withdrawal from a non-strategic country

Disposal of Polish real

estate assets€550m

2006

Disposal of standardproperties with no value creation potential

€288m

20052006

Head office soldWarehouses sold

Capturing the value of our assets

IPOAppraised assets:

€957m

Market value: €2.2bn

2005

Sophisticated financing

Partnership with Whitehall

in Poland> €700m

2007

Sale and leaseback of mature property assets

OPCI AEW Immocommercial

€455m

OPCI Immocio€266m

2007

Developing our property assets has to be supported by an active asset turnover strategy

An active asset management strategy in place since 2005

ALCUDIA


MERCIALYS: a pure retail property company

A portfolio comprising only retail properties• 81% of which are leased to non-Casino banners

An appraised value of €1,914m at 31 December 2007• GLA: 611,600 sq.m• 167 sites, of which 97 malls

A growth portfolio• €97.7m in invoiced rents, up 21.1% in 2007• Exceptional reversionary potential• 2008 to 2009: targeted double-digit growth in rental income and

operating cash flows before non-recurring items (12% forecast for 2008)

A listed company, 60% owned by Casino• Market value: €2.2bn (at 30/05/08)


ALCUDIA: an ambitious project to enhance the value of our shopping centre assets

Analysis of all of our shopping centres in 2006 and 2007

Identification of a potential 465,000 sq.m of retail space(malls and mid-sized stores) to be created out of the existing 480,000 sq.m…

… thereby doubling the mall and mid-sized store space in the analysed portfolio

Deployment of 109 projects starting in 2008

A 5-7 year project


3 major priorities for 2008

File a maximum number of CDEC regional planning permit requests

Build the extensionsand restructure

10 centres

• High quality projects, a sustainable development approach

• An appropriate internal organisation, with cross-disciplinary working groups

• Opening permits already granted or unnecessary

• Dedicated internal organisation

• No need for CDEC permits

• A defined identity

Renovate and theme 10 malls in 2008, which

won’t be restructured until 2011-2012

Prepare the pipeline of sites deployed in 2009-2012

Open 5 centres in 2008 Instil the “neighbourly spirit” Renovate the centres that need

it the mostAdopt a defensive strategy

GET THE PERMITS FOR TOMORROW’S DELIVERIES BUILD AND DELIVER THEMATISE


Example of a development project: Annecy Seynod

1,3579 725 sq.m9,041 sq.m

Phase 1

1,5001,300Parking spaces16,500 sq.m5 055 sq.mMall & MS GLA

9,041 sq.m7,441 sq.mHypermarket

Phase 2Existing

BEFORE AFTER

Opening

Works

DecNov OctSeptAugJulyJuneMayAprMarFebJan2009

Sale to Mercialys

Letting process

Building permit

CDECDecNov OctSeptAugJulyJuneMayAprMarFebJanDecNov OctSeptAugJulyJuneMayAprMarFebJan

20102008Schedule

Received on 29/02/08

March 2010April 2010

SIEC

FOCUS ON 2008 PROJECTS


BEFORE AFTER

Example of a development project: Annecy SeynodFOCUS ON 2008 PROJECTS


Letting process

Opening

DecNov OctSeptAugJulyJunMayAprMarFebJan2009

Sale to Mercialys

Works

Building permit

CDECDecNov OctSeptAugJulyJunMayAprMarFebJanDecNov OctSeptAugJulJuneMayAprMarFebJan

20102008Planning

Received on 17/10/07 (MS)

Dec 2008

2,1602,160Parking spaces22,040 sq.m8,741 sq.m Mall & MS GLA9,980 sq.m9,980 sq.mHypermarket

FutureExisting

Dec 2008

Example of a development project: Besançon

BEFORE AFTER

FOCUS ON 2008 PROJECTS


BEFORE AFTER

Example of a development project: BesançonFOCUS ON 2008 PROJECTS


878769Parking spaces5,093 sq.m2,296 sq.mMall & MS GLA7,887 sq.m6,836 sq.mHypermarket

FutureExisting

BEFORE PHASE 1 PHASE 2

Phase 2Phase 1Letting process

Opening

DecNov OctSeptAugJuly

Phase 2

JuneMayAprMarFebJan2009

Sale to Mercialys

Phase 1WorksPhase 2Building permit

CDECDecNov OctSeptAugJulyJuneMayAprMarFebJanDecNov OctSeptAugJulyJuneMayAprMarFebJan

20102008Planning

Received on 18/01/08

Oct 2008 ph 1 Oct 2010 ph 2Apr 2008 Apr 2011

Example of a development project: Valence SudFOCUS ON 2008 PROJECTS


BEFORE AFTER

Example of a development project: Valence SudFOCUS ON 2008 PROJECTS


Objectives:• Enhance the centre’s attractiveness to support

Géant Casino sales and improve retail appeal.• Display the Red Line that will eventually be deployed

at every mall. Start today, without waiting for implementation of the Alcudia programme.

Theming: the “Neighbourly Spirit” concept• Simple works: façades, parking lot and mall

public areas.• Decoration, signage, Red Line visual elements.

Theme mallsFOCUS ON 2008 PROJECTS

Internal worksAdministrative authorizations

External worksAdm. authorizations

DecNovOctSeptAugJulyJuneMayAprilMarchFebJan


Operational deployment: • 10 centres will be renovated in 2008

• 17 centres will have opened as Neighbourly Spirit malls within a year

Forward-looking commitment: the Research and Development committee

• Looking over the horizon to adapt our malls to future expectations.

• Preparing retailing practices scenarios.

• Defining the most efficient shopping centre for the Casino Group 10 years from now.

Conclusion:taking action, anticipating the future, innovating

the dual retail & real estate development model: alcudia

Documents