Asset management involves the daily management, dynamic and with a view to the long term, of our properties in order to service both visitors and retailers. The investments planned aim to maintain and increase the quality of the portfolio, favouring innovation, appeal, quality materials, in addition to sustainability.
The focus will be in particular on 4 main operating leverages:
The plan calls for investments of around €35 million in the restyling/refurbishment of the existing portfolio and in supporting commercial activities.
We already tested these types of improvements in several shopping centers, and they benefitted tenants with positive repercussions for the long-term sustainability of our rental income.
The 4 main projects for the three years period 2019-2021 will involve:
Casilino shopping center in Rome (internal and external restyling, completed in October 2019)
Fonti del Corallo shopping center in Livorno (remodeling and restyling, completed in November 2019)
Gran Rondò shopping center in Crema (internal restyling)
La Favorita shopping center in Mantua (internal and external restyling)
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We believe the role of the hypermarket as an attractor for visitors will continue to be key, even as shopping centers change, therefore we signed a Strategic Agreement with Coop Alleanza 3.0, partner and the Group’s main food anchor.
The framework Agreement relates to 18 contracts (out of a total of 20) of the hypermarket portfolio rented to to Coop Alleanza 3.0 and calls for:
The agreement represents a unique and singular opportunity to achieve the objectives to stabilize the lease agreements in the long term, as well as increase the overall sustainability of rents and future cash flow.
Moreover IGD and Coop Alleanza are committed to developing a more complete and integrated relationship, with a view to implementing shared marketing projects, conducting studies of consumer behaviour and developing Customer Relationship Management strategies.
In addition to the new restyling and refurbishment projects, the Strategic Plan calls for investments of around €26 million in the completion of 2 development projects:
Officine Storiche in Livorno, where work should be completed by October 2021
A new entertainment space adjacent to Centro Esp in Ravenna (work is expected to be completed in 2021)
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Rationalisation of the portfolio through the disposal of some non-strategic assets for €150-200 million is under evaluation.
Income from disposals will be primarily allocated to reduce debt and leverage and partly re-invested.
Given the difficult environment, during the year IGD deemed it opportune to postpone or cancel a few capex and investments in order to limit the pandemic’s impact on cash flow and maintain a solid and balanced financial structure.
The restyling of the Porto Grande (San Benedetto del Tronto) and La Favorita (Mantua) shopping centers was, therefore, postponed. Work on these two projects, along with the restyling and remodeling of the hypermarket at the Casilino Shopping Center (Rome), will resume in 2021 and should be completed the following year.
Work on Porta a Mare in Livorno and the development of the Officine Storiche section was also suspended, but resumed in the second half of 2020 and currently is expected to be completed by the end of first half 2022.
In Septemebr, we signed the final contracts involving the sale of Palazzo Orlando (an office building located inside Porta a Mare project area) and the purchase of the 50% interest in the Darsena City shopping mall in Ferrara of which we were already joint-owner.
In autumn two restyled shopping centers were inaugurated, Casilino shopping center in Rome and Le Fonti del Corallo shopping center in Livorno: in both instances work was done on the interior and the exterior of the centers in order to give them new vitality and make them even more appealing, welcoming and confortable for visitors.
In April we completed the acquisiton of a portfolio of 4 shopping malls and 1 retail park located in Northern Italy for a total investment equal to approximately Euro 195.5 million. This transaction will enable us to further consolidate our leadership in the management of locally dominant shopping centers.
On May 3rd, at the Gran Rondò shopping center in Crema, we opened a new medium surface and completed the restyling of the external facade