Review of operations

Introduction During 2009, the focus on retail increased further. The share of retail in the overall portfolio rose to 94% (2008: 92%) through the disposal of some offices and industrial properties and the addition of a number of dominant centres. By the end of 2009, the property portfolio spread over the main home markets was: the Netherlands 33% (2008: 33%), France 32% (34%), Italy 18% (19%), Spain 10% (8%) and Turkey 7% (6%). The changes in the operational property portfolio during the year, including our share in joint ventures in France and Italy and participating interests in Turkey, were as follows:

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Market

The European economy slid into a deep recession at the end of 2008.

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Operating and management expenses

Operating expenses for the continued activities increased by € 6.9 million (14.7%) in 2009, to € 53.8 million.

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Valuation policy and methods

Corio’s valuation policy entails a quarterly appraisal at market value for the operational portfolio and the development portfolio.

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Changes in value of the portfolio

In 2009 the value of the operational property portfolio fell from € 5,562.9 million to € 5,516.0 million.

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Revaluation of the operational portfolio

The revaluation of the operational portfolio in 2009 amounted to 6.3% negative.

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Yields

During 2009 the increase in net yields for retail property in the portfolio amounted to 60 basis points on average.

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Revaluation of the development portfolio

The revaluation of the development portfolio in 2009 amounted to 8.7% negative.

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Pipeline

Corio is continually working to strengthen its retail portfolio to enhance its total yield, while striving to improve its risk profile by selectively revitalising, renovating and expanding properties, as well as by initiating new developments and making appropriate acquisitions and disposals.

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Overview of the Pipeline

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.

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