In early 2019, MRM became a pure-play retail property investment company
A strategic turnaround initiated at the time of SCOR’s investment in MRM
The arrival of SCOR SE as MRM’s majority shareholder in May 2013 was followed by the decision to adopt a new strategy. Originally a mixed real estate company, MRM has gradually refocused on the ownership and management of retail properties by selling its office properties. The company set a medium-term time frame for an optimum roll-out of this disposal plan and to reinforce the rental situation of its office properties in order to sell them under the best conditions.
Enhance the potential value of retail properties
MRM owns a portfolio of retail properties located in city centres or suburban areas, including six shopping centres. These properties are well positioned within their respective catchment areas and let to both national retailers and independent stores. In order to improve their attractiveness, in 2016 MRM initiated a major investment plan in order to exploit their potential for value-enhancement. This will enable MRM to make the most of their strengths.
Since 2008, MRM has acquired real expertise in the refurbishment and redevelopment of retail spaces with the aim of boosting their momentum and adapting them to consumer expectations. The development projects implemented also entail creating an attractive retail mix that is consistent and suited to each shopping centre’s positioning, while also improving the shopping experience for customers.
MRM has defined investment projects concerning seven of its nine retail holdings, taking into account recent changes in the retail sector in terms of retailers’ expectations and consumer behaviour. The corresponding plan was launched in 2016 and has been rolled out on a staggered basis since then as administrative authorisations are obtained. This represents a potential investment of circa €35 million. In mid-2019, all projects had been launched and give have already been completed: Les Halles du Beffroi in Amiens, Sud Canal in Saint-Quentin-en-Yvelines, Carré Vélizy, a mixed use office and retail complex in Vélizy-Villacoublay, the Aria Parc retail park in Allonnes (Le Mans conurbation) and Le Passage du Palais in Tours. Out of the 6,900 sqm of additional space provided for in the plan, 4,300 sqm has already been built or acquired.
MRM is continuing with the extension/redevelopment of the Valentin shopping centre attached to a Carrefour hypermarket in the conurbation of Besançon, due to be completed in the first half of 2020. It is also working on the redevelopment of the ground floor of Le Passage de la Réunion in Mulhouse.
MRM’s solid financial position and the successful execution of its office properties disposal plan have given it sufficient financial leeway to be able to focus fully on these projects.
January 2019: sale of the last office property
In May 2013, MRM owned nine office properties. With the exception of one property that was to be sold vacant (Urban in Montreuil), MRM’s policy has been to sell them when they are stabilised with a high occupancy rate and a secured rental status. MRM therefore made a staggered withdrawal from the office property sector between mid-2013 and the very start of 2019, giving itself time to continue to let available premises before selling them.
The total amount of assets sold stands at €132 million, around 10% above appraisal values as at the end of June 2013 after taking account of investments made to optimise lettings where applicable.
Reinforcing the rental situation of office properties to sell them under the best conditions
In May 2013, MRM owned nine office properties. With the exception of one property that is to be sold vacant (Urban in Montreuil), MRM’s policy is to sell them when they are stabilised with a high occupancy rate and a secured rental status. MRM is therefore making a gradual withdrawal from the office property sector, giving itself time to continue to let the premises that are currently vacant before selling them. At the end of 2014, three properties had been sold, and a fourth was sold in April 2015. Three new sales of office buildings in 2016 took the total number of disposals to seven. The process of selling the two office properties still in the (Nova in La Garenne-Colombes and Urban in Montreuil) has been initiated and MRM is aiming to withdraw from the office segment in 2017.
Dynamic management of the retail portfolio
MRM is currently executing the final stage of the investment plan dedicated to its retail property portfolio initiated in 2016 and due to be completed in the first half of 2020 with the end of the partial redevelopment/extension of the Valentin shopping centre, the largest project in the plan. Beyond this time frame, MRM intends to continue to increase the value of and actively manage its shopping centres, continuing in particular with its letting, reletting and retailer rotation efforts.
In addition, MRM is planning and looking into the possibility of opportunistic acquisitions or disposals to initiate a dynamic portfolio management.