In France, Wereldhave owns a portfolio of six shopping centres, managed by a dedicated in-house team of 46 employees. It is a relatively new organisation, built in 2015 following the acquisition in December 2014.
Two of the centres are located in Rouen. The other centres are in Le Havre, Bordeaux, Strasbourg and Argenteuil (Greater Paris). The centres are relatively new with modest capital expenditure requirements for the coming years. Three of the centres are inner city centres with an important role within the local community. The other centres have a leisure and experience angle, with large cinemas, restaurants and a broad fashion offer. The average size of the centres is just under 40,000 m² GLA and footfall is at an average of 6.8m visitors per year.
Results and valuation
Net rental income in France decreased by 11.1% to € 40.8m (2016: € 45.9m). Rents are under pressure, as the largest fashion chains are optimising their store base. Bad debt and defaulting tenants also impacted rental income. Like-for-like rental decline for the year 2017 amounted to 7.0% (index 1.0%). After the management change in our French operations we defined two key priorities: securing key anchors and improving the overall tenant quality, commercially and financially. Overall occupancy in France decreased to 91.9% in Q3, but recovered to 93.2% at year-end 2017 (2016: 94.4%). Several key anchors were secured, albeit at lower rents. The full year impact on net rental income will continue in H1 2018. As announced earlier, our target is to stabilise net rental income in France during 2018.
New leases added to the overall quality of our tenant portfolio. A total of 63 leases was signed for a total of 21,445m². Leases were signed with Mango in Mériadeck, a package deal with H&M for the entire portfolio, Action and Zeeman for Coté Seine, SuperDry and Etam in Docks76 and Rituals in Rivetoile. Footfall in the French shopping centres went up by 0.7%, which is 2.5% above the French CNCC index. Especially Docks Vauban and Rivetoile performed well.
The portfolio was valued at € 877.1m on December 31, 2017 (2016: € 899.7m).
In Le Havre, the shell for the Primark in Docks Vauban was completed in July 2017 and tenant fit-out works started early in August. Primark will open its doors on February 21, 2018. The announced store opening has added to the appeal of the centre. The sealing project was completed in December 2016. Footfall numbers are positive and leasing activity is increasing. Now that the inner climate has improved, specialty leasing is also picking up.In Rouen, works for the Verrerie project at the Saint Sever shopping centre started on October 2, 2017. The project will add an extensive food hall in front of the entrance of the Kinepolis cinema. Vapiano signed as one of the first food anchors.