Carmila, the shopping mall property unit of French retailer Carrefour (CARR.PA), is readying itself for a possible initial public offering, should its shareholders decide to go ahead with the plan, its chief executive said on Tuesday.
Analysts say that floating Carmila, which ranks among Europe’s five largest commercial property firms, would allow Carrefour to get extra cash to fund its expansion and also unlock some hidden value within Carrefour’s asset portfolio.
Speaking at a news conference on its two-year anniversary, Carmila Chief Executive Jacques Ehrmann said, “a stock market listing is a matter for the shareholders (to decide). Our role is to make sure the company is ready for this possibility.”
“Nothing has been decided. But we are starting to prepare ourselves… Technically the company is working to have an (asset) extension pipeline that can be valued from the end of 2017, regardless of the decision of the shareholders,” he added.
Carmila, created in April 2014, is 42.3 percent controlled by Europe’s largest retailer Carrefour, with the balance in the hands of a group of institutional investors.
Carrefour officials have said they were waiting for the right time for an IPO of Carmila, whose asset portfolio is now worth 4.5 billion euros.
Carrefour spearheaded the creation of Carmila, as part of its strategy to revive its European hypermarkets by notably making the stores more attractive for shoppers.
Carmila, which controls 189 sites near Carrefour hypermarkets in France, Italy and Spain, makes sure the Carrefour hypermarkets and the shopping centers adjacent to them are properly maintained and the right tenants are found.
Since its creation the value of its portfolio has jumped 67 percent to 4.5 billion euros and the gross rental income it generates has grown 47 percent to 272 million euros.
Carmila has plans to develop a further 70 projects in Europe, representing an extra asset value of 1.5 billion euros.
The group of Carmila institutional investors includes one of the top Carrefour shareholders, U.S. private equity firm Colony, as well as insurer Axa (AXAF.PA), BNP Paribas Cardif (BNPP.PA), Pimco Asset Management, Sogecap (SOGN.PA), and insurer Predica (CAGR.PA).