11 October 2005 12:45
Price Sensitive corporate governance

2005/2010 Business Plan presented to financial community

810 million euros of investments over the next three years

Investments of 810 million euros over the next 3 years to acquire and develop new shopping centers, both under the name of Coop – as part of the existing framework agreement with Coop Adriatica and Unicoop Tirreno – and other major real estate retailers, enhance the value of its property assets through the ongoing improvement of existing shopping centers, and provide a major boost to service activities thanks to new management contacts and utilization of cross-selling opportunities generated by facility management and agency activities.

The above is a brief summary of the main points of the 2005/2010 business plan of IGD SpA, a company listed on the S.T.A.R. segment of the Italian Stock Exchange and operating in the real estate retail sector, presented today in Milan to corporate investors and financial analysts.

IGD aims at developing along three main lines: the acquisition and development of new shopping centers, improvement of the value of property assets and expansion of its services activities.

810 million euros of investments over the next 3 years are planned inside these guidelines. More specifically, 360 million euros are allocated to investments within the framework agreement, 160 million euros to new projects such as Mondovicino and Guidonia, while a further 290 million euros are to be used to carry out selected new projects.

In geographical terms approximately 18% of investments will be allocated to northern areas, 38% to the central part of Italy and the remaining 44% to the construction of shopping centers in the south of the country which was already identified during listing as the area characterized by the highest growth rate.

Therefore the development strategies of IGD’s industrial plan presented today in Milan include both real estate and rental management as well as service activities.

With regard to the former, the plan provides for a major increase in size through the acquisition or construction of centers with important investment opportunities, both as part of initiatives developed by third parties and as part of the framework agreement with Coop Adriatica and Unicoop Tirreno.

IGD also foresees an improvement in the value of its existing property assets through maintenance and extension of centers and ongoing monitoring of the tenant mix, and it does not rule out the possibility of selling off centers which have already achieved a sufficient value.

As far as service activities are concerned, IGD’s plan provides for growth through new shopping center management and agency contracts that will benefit from the IGD portfolio growth.

Even if the nature of IGD business does not guarantees a long term view of more than three years, thanks to the framework agreement 3 new opportunities are already being looked at, as well as business opportunities with some of the other Italian COOPs.

IGD’s business plan provides for a return of 6.5/7% from its properties, a cash flow of 90 million euros and a EBITDA margin of approximately 67% over the next three years minus the aforementioned investments.

A preliminary agreement for the disposal of the Centro Leonardo in Imola, which is currently undergoing renovation, has already been signed for the sum of 38 million euros with effect from 2006.