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Overview of the Pipeline

The division of the pipeline projects at 31 December 2009 over the four categories and amounts already invested were as follows:

Projects in the fixed committed and fixed deferrable pipeline on 31 December 2009 fell substantially from € 1.1 billion (including € 136.4 million already invested) on 31 December 2008 to € 760 million (including € 136 million already invested) on 31 December 2009. The fixed pipeline consists of 19 projects, 6 of which are new projects and 13 are redevelopments. During 2009 three projects were cancelled and several projects were taken in operation, among which: Les Portes de Chevreuse in Coignières, Tekira in Tekirdağ and ’t Circus in Almere. In Italy the extension of four existing centres and the development of a new shopping centre were moved from the variable to the fixed pipeline. On 31 December 2009 the yield on the total costs (projected net rental income as a percentage of investments, including financing costs and management costs) of the projects in the fixed pipeline was 6.9%. Corio does not take zoning or construction risks, so the actual return may be influenced only by the letting results and/or financing costs.

* Turnkey deal, total investment may change as a result of actual rental income.

Projects in the variable deferrable and waivable pipeline on 31 December 2009 represented a total investment of € 1.5 billion (2008: € 1.6 billion), including € 116 million (2008: € 73.6 million) already invested, consisting of 12 projects, of which three were new projects and nine were redevelopments. On 31 December 2009, the yield on the total costs as defined above was 7.4%.

According to the classification of the pipeline by degree of commitment, on 31 December 2009, projects were committed for a total sum of € 760 million (including € 136.4 million already invested), € 1.3 billion could be deferred, both fixed and variable (including € 129.4 million already invested) and € 265 million could be waived (including € 1.3 million already invested). Security for amounts Corio already invested in projects that can be cancelled or waived, such as bank guarantees, has been provided by Corio’s project partners. In such case the relevant parties will have to pay back any investments already made by Corio if the project is cancelled or waived.

The amounts already invested in Corio’s own (re)developments are already part of Corio’s development portfolio, which are included in Corio’s consolidated balance sheet as ’investment property under development’’.

The amounts already invested in all pipeline projects do not match the amounts under ‘investment property under development’ in the balance, for the following reasons:

• Any investments in turnkey projects are included in other items on the balance sheet under the item ‘advance payments’, but are not included in investment property under development.
• The amounts already invested in pipeline projects are included at fair market value in Corio’s consolidated balance sheet.
• Holdings of land are included at fair market value under ‘investment property under development’. Most of these land holdings relate to potential retail projects or extensions of existing centres. Corio owns several plots of land, consisting of a a potential retail project in Bulgaria, two office and two retail plots in France and a retail project in Italy. Their value was approximately € 12.6 million, € 25.4 million and € 38.0 million respectively on 31 December 2009, representing 39% of total investment property under development. These projects are not included in the pipeline as these are not (yet) under development, except for the project in Italy. This project, acquired last year, is currently under redevelopment and is not generating income. The two office plots in France will be sold in due course, in line with Corio’s strategy.
For a breakdown of the properties under development we refer to the Valuation paragraph.

In the table below the changes in the portfolio are reflected as a result of the additions of the pipeline projects. In this table it has also been assumed that the offices and industrials in France have been sold by 2012. In particular the portfolios in Italy and the Netherlands will be strengthened by pipeline projects. Corio is constantly active in the market for new acquisitions and new developments.

* Including associates.

Source: Annual Report 2009, Chapter Review of Operations, page 49 (PDF, 6.362 kB)

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