Klepierre S.A.

Klepierre's strategy is to focus on dominant shopping centers in large cities with expanding catchment areas and to attract new tenants--for instance covering lifestyle, leisure, and entertainment offerings. Klepierre also aims to leverage big data (collecting statistics on footfall, shopping habits and consumption pattern). S&P Global Ratings' stable outlook on French retail property company Klepierre reflects our view that the company's rental income should remain solid over the next two years, experiencing positive like-for-like growth. We believe that the company's strategy of focusing on prime large shopping malls with resilient growth prospects, while divesting of noncore assets, should mitigate the impact of increasing competition in Western Europe, both among shopping center property companies and from e-commerce. On this basis, we

...Disruption in retail has had no real impact on growth of Klepierre's net rental income and management's clear strategy is to preserve this resilience. Although Klepierre's retail tenants are grappling with the growth of e-commerce and shifting consumer preferences, focusing on a smaller number of physical stores with a bigger marketing impact, Klepierre has increased its rental income for several years. We expect this trend will continue over 2018-2019 through rent indexation to the consumer price index--not retailers' sales--and Klepierre's demonstrated ability to accommodate the continuing shift in segment mix. Klepierre's strategy is to focus on dominant shopping centers in large cities with expanding catchment areas and to attract new tenants--for instance covering lifestyle, leisure, and entertainment offerings. Klepierre also aims to leverage big data (collecting statistics on footfall, shopping habits and consumption pattern). Credit measures should be stable over 2018-2019 and can...

Full Report