El Corte Inglés Values its Real Estate Assets at €17.1bn

25 September 2018 – Expansión

The properties owned by El Corte Inglés are worth €17.147 billion, according to the most recent valuation entrusted by the company to Tinsa for the end of its financial year, February 2018. That is the valuation that the company shared with investors interested in the placement of €600 million of its bonds.

This real estate portfolio, which according to previous reports was worth almost €17.0 billion, comprises 94 shopping centres, of which two are located in Portugal. These shopping centres account for 87% of the total value of the company’s assets. El Corte Inglés warns investors that this valuation may have to be adjusted in the future, given the illiquid nature of its real estate assets.

Tinsa’s study segments the distribution company’s shopping centres by value. Two of them are worth more than €500 million each, and another two are worth between €400 million and €500 million. The bulk of the centres, 45 to be precise, have a valuation of between €100 million and €200 million. Six of the centres are worth between €300 million and €400 million.

32% of the value of the real estate assets of El Corte Inglés are located in Madrid, whilst 10% are located in Barcelona. Málaga and Valencia are home to 6% each; Sevilla another 4%; and the other Spanish regions, the remaining 42%.

The bulk of the valuation of El Corte Inglés’s real estate portfolio, €14.964 million, corresponds to its stores and shopping centres

The company highlights that it owns the largest portfolio of real estate assets of any of the companies in its sector in Europe. The total surface area of its real estate assets spans 3,994 million m2.

This independent valuation entrusted to Tinsa does not include the real estate operations carried out by El Corte Inglés since February of this year. In August, the company sold two shopping centres located in Madrid (Princesa) and Bilbao (Gran Vía) to Corpfin Capital Real Estate for around €100 million.

Quarterly results

The results of El Corte Inglés remained practically stable YoY during the first quarter of its financial year, which finished at the end of May. According to the unaudited provisional accounts, the company lost €50 million during that quarter, compared with losses of €51 million during the same period in 2017.

The company’s sales grew slightly, with net revenues of €3.417 billion, just above the €3.413 billion recorded during its first quarter last year.

According to the unaudited provisional data at the end of July 2018, corresponding to the first five months of the financial year, sales fell by 0.1% YoY and EBITDA decreased by 0.6%.

This result is explained by a decrease in revenues in the retail and technological departments, which were partially offset by an increase in sales in its travel agency and insurance departments.

El Corte Inglés explains to investors interested in its bonds that sales of clothing were hit during that period due the unusual climate this year (…).

Original story: Expansión (by A. Roa & D. Badia)

Translation: Carmel Drake

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