Two European retail rivals this week tapped up the bond market in a bid to increase liquidity and fund development.
French shopping centre REIT Klépierre, in which US mall group Simon Property Group has a 28.7% stake, raised €500m (£399.6m) from a seven-year bond.
The issue was close to six times oversubscribed by pan-European investors including fund managers, insurers, banks and pension funds. The bond was priced at a 145 basis points margin above the swap rate, which equals a coupon of 2.75%.
Klépierre’s liquidity increased to around €1.8bn as a result of the fund raising and following a €488.5m bond issue earlier this year.
In its first-half results released in August, the company, which has a €16.4bn portfolio, said it had a pipeline of €3.3bn shopping centre projects, including €1bn of committed projects.
Also this week, Europe’s leading listed commercial property company, Unibail-Rodamco, announced its third bond issue this year. The retail landlord launched the convertible bonds, due 1 January 2018, to initially raise €750m with the option to extend to €862.5m.
The bonds would convert at a 35-40% premium to Unibail’s current share price at maturity.
Unibail said the money raised from the offer would “permit the company to address its general financing needs, including its existing and future development projects, and diversify its funding sources”.
bridget.o’connell@estatesgazette.com
