The Dual "Retail & RealThe Dual "Retail & Real Estate Estate Development"Development" Model: Model: AALLCCUUDDIIAA
9-10 June 2008
Investor Day
J. EHRMANN
Executive Managing Director, Real Estate & Expansion
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Groupe Casino’sreal estate
development strategy
2Solo
While more complex, the dual model is also more sustainable for the retailing business and creates more value for the Group
1Dual
3Solo
Real Estatedevelopment
France (Alcudia)and emerging markets
Alcudia
Mature markets (France) & precision retailing
Diversity of formatsFast/Simple/Targeted
Innovative real estate development projects
Financialengineering
While more complex, the dual model is also more sustainablefor the retail business and creates more value for the Group
Retail development
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Hyp
Hyp
Hyp
Housing
Stand-alone hypermarket
Offices
Supermarket
MallShopping centre
While more complex, the dual model is also more sustainablefor the retail business and creates more value for the Group
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HypMall
Hyp
Hyp
While more complex, the dual model is also more sustainablefor the retail business and creates more value for the Group
Hyp
Housing
Stand-alone hypermarket
Offices
Supermarket
MallShopping centre
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Mall
Mall
Hyp
Hyp
Hyp
Mall
While more complex, the dual model is also more sustainablefor the retail business and creates more value for the Group
Hyp
Housing
Stand-alone hypermarket
Offices
Supermarket
MallShopping centre
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Mall
CCMall
Mall
Hyp
Hyp
Hyp
While more complex, the dual model is also more sustainablefor the retail business and creates more value for the Group
Hyp
Housing
Stand-alone hypermarket
Offices
Supermarket
MallShopping centre
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Real Estatedevelopment
Retail property development creates value because it is closer to retailing than to a property leasing business
Aligning mall merchandising with today’s shopping trends
Attracting new banners, capable of generating additional footfall
Optimising rental income/organic growth
Managing shopping centre events
+Retaildevelopment
Food retailing is at heart a flow business
Traffic is directly correlated with a store’s offering and shopper appeal
Traffic is stimulated by the amount and quality of the offering
The impact of critical mass far offsets any cannibalisation
Stand-alone stores can be threatened from above by a new mall and from below by a niche retailer
Critical mass in shopping centres is a key business driver
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Volume
Square metresCustomer flowsRevenuesMargin
Assetvalue
465,000 sq.m of additional retail space
Assets built
AlcudiaAlcudia
The Dual Model: the Alcudia programme
SCOPE: 109 CENTRES
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Venezuela
Colombia
Argentina
Brazil
Uruguay
Thailand
Vietnam
The Dual Model: international development
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Real Estatedevelopment
Gainsif disposals
15 projects 16 projects
Assets
Assets built
or
“Solo” Real Estate Development: an opportunity to leverage our real estate expertise outside the group
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Which demands • Expertise
• People
• Financial engineering
OPCIIPO/REIT
LandLandbank
DevelopmentRetail park
Co-developmentOffices/Hotels
LandParking lots
Property managementProject owner
The Dual Model: an ambitious, complex strategy
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Actively managing assets every day, to capture all of the centres’ reversionary potential
Enhancing the appeal of our shopping centres in France by doubling their retail space over the next five to seven years
Growing the real estate development business in France by creating new development structures
Partnership with Whitehall for real estate development projects in Eastern Europe
Leveraging the dual model to develop our banners in Thailand, Vietnam, Venezuela and Colombia
The group’s property development strategy is focused on creating asset value
Several paths to value creationby capitalising on the expertise of our teams
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Constantly manage the portfolio to sell and lease back mature property and acquire assets with high value creation potentialUse sophisticated, innovative financial engineering techniques as needed
Withdrawal from a non-strategic country
Disposal of Polish real
estate assets€550m
2006
Disposal of standardproperties with no value creation potential
€288m
20052006
Head office soldWarehouses sold
Capturing the value of our assets
IPOAppraised assets:
€957m
Market value: €2.2bn
2005
Sophisticated financing
Partnership with Whitehall
in Poland> €700m
2007
Sale and leaseback of mature property assets
OPCI AEW Immocommercial
€455m
OPCI Immocio€266m
2007
Developing our property assets has to be supported by an active asset turnover strategy
An active asset management strategy in place since 2005
ALCUDIA
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MERCIALYS: a pure retail property company
A portfolio comprising only retail properties• 81% of which are leased to non-Casino banners
An appraised value of €1,914m at 31 December 2007• GLA: 611,600 sq.m• 167 sites, of which 97 malls
A growth portfolio• €97.7m in invoiced rents, up 21.1% in 2007• Exceptional reversionary potential• 2008 to 2009: targeted double-digit growth in rental income and
operating cash flows before non-recurring items (12% forecast for 2008)
A listed company, 60% owned by Casino• Market value: €2.2bn (at 30/05/08)
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ALCUDIA: an ambitious project to enhance the value of our shopping centre assets
Analysis of all of our shopping centres in 2006 and 2007
Identification of a potential 465,000 sq.m of retail space(malls and mid-sized stores) to be created out of the existing 480,000 sq.m…
… thereby doubling the mall and mid-sized store space in the analysed portfolio
Deployment of 109 projects starting in 2008
A 5-7 year project
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3 major priorities for 2008
File a maximum number of CDEC regional planning permit requests
Build the extensionsand restructure
10 centres
• High quality projects, a sustainable development approach
• An appropriate internal organisation, with cross-disciplinary working groups
• Opening permits already granted or unnecessary
• Dedicated internal organisation
• No need for CDEC permits
• A defined identity
Renovate and theme 10 malls in 2008, which
won’t be restructured until 2011-2012
Prepare the pipeline of sites deployed in 2009-2012
Open 5 centres in 2008 Instil the “neighbourly spirit” Renovate the centres that need
it the mostAdopt a defensive strategy
GET THE PERMITS FOR TOMORROW’S DELIVERIES BUILD AND DELIVER THEMATISE
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Example of a development project: Annecy Seynod
1,3579 725 sq.m9,041 sq.m
Phase 1
1,5001,300Parking spaces16,500 sq.m5 055 sq.mMall & MS GLA
9,041 sq.m7,441 sq.mHypermarket
Phase 2Existing
BEFORE AFTER
Opening
Works
DecNov OctSeptAugJulyJuneMayAprMarFebJan2009
Sale to Mercialys
Letting process
Building permit
CDECDecNov OctSeptAugJulyJuneMayAprMarFebJanDecNov OctSeptAugJulyJuneMayAprMarFebJan
20102008Schedule
Received on 29/02/08
March 2010April 2010
SIEC
FOCUS ON 2008 PROJECTS
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BEFORE AFTER
Example of a development project: Annecy SeynodFOCUS ON 2008 PROJECTS
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Letting process
Opening
DecNov OctSeptAugJulyJunMayAprMarFebJan2009
Sale to Mercialys
Works
Building permit
CDECDecNov OctSeptAugJulyJunMayAprMarFebJanDecNov OctSeptAugJulJuneMayAprMarFebJan
20102008Planning
Received on 17/10/07 (MS)
Dec 2008
2,1602,160Parking spaces22,040 sq.m8,741 sq.m Mall & MS GLA9,980 sq.m9,980 sq.mHypermarket
FutureExisting
Dec 2008
Example of a development project: Besançon
BEFORE AFTER
FOCUS ON 2008 PROJECTS
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BEFORE AFTER
Example of a development project: BesançonFOCUS ON 2008 PROJECTS
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878769Parking spaces5,093 sq.m2,296 sq.mMall & MS GLA7,887 sq.m6,836 sq.mHypermarket
FutureExisting
BEFORE PHASE 1 PHASE 2
Phase 2Phase 1Letting process
Opening
DecNov OctSeptAugJuly
Phase 2
JuneMayAprMarFebJan2009
Sale to Mercialys
Phase 1WorksPhase 2Building permit
CDECDecNov OctSeptAugJulyJuneMayAprMarFebJanDecNov OctSeptAugJulyJuneMayAprMarFebJan
20102008Planning
Received on 18/01/08
Oct 2008 ph 1 Oct 2010 ph 2Apr 2008 Apr 2011
Example of a development project: Valence SudFOCUS ON 2008 PROJECTS
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BEFORE AFTER
Example of a development project: Valence SudFOCUS ON 2008 PROJECTS
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Objectives:• Enhance the centre’s attractiveness to support
Géant Casino sales and improve retail appeal.• Display the Red Line that will eventually be deployed
at every mall. Start today, without waiting for implementation of the Alcudia programme.
Theming: the “Neighbourly Spirit” concept• Simple works: façades, parking lot and mall
public areas.• Decoration, signage, Red Line visual elements.
Theme mallsFOCUS ON 2008 PROJECTS
Internal worksAdministrative authorizations
External worksAdm. authorizations
DecNovOctSeptAugJulyJuneMayAprilMarchFebJan
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Operational deployment: • 10 centres will be renovated in 2008
• 17 centres will have opened as Neighbourly Spirit malls within a year
Forward-looking commitment: the Research and Development committee
• Looking over the horizon to adapt our malls to future expectations.
• Preparing retailing practices scenarios.
• Defining the most efficient shopping centre for the Casino Group 10 years from now.
Conclusion:taking action, anticipating the future, innovating