Sonae Sierra, the international retail specialist, recorded a net profit of €15.3 mln in the first three months of 2018, compared to the €15.9 mln reached in the same period of last year, impacted by lower gains on the sale of investments so far in 2018.
EBIT (earnings before interest and tax) reached €27 mln, an 8% increase over the previous year due to improved performance from the portfolio in Europe and higher services turnover and margins, according to the shopping centre specialist.
'The first three months of 2018 have confirmed the recovery trend, particularly in Europe, where the company performed very positively. We have also increased our development pipeline, signing a joint venture agreement for Parma in Italy, and amplified our services business still further,' said Fernando Guedes de Oliveira, Sonae Sierra's CEO.
The company recorded an improved performance at its shopping centres, as tenant sales grew by 5.2% overall and 5.7% in the European portfolio compared to the same period of 2017, marked by 17.6% growth in Spain and 4.8% increase in Portugal. In Romania, tenant sales grew 6.4% in absolute terms, due to the continuing success of ParkLake.
The global occupancy rate of the portfolio shifted down slightly to 95.6%, a fall of 0.7 bps compared to the same period of 2017, affected by small changes across the global portfolio. In Europe, occupancy remained largely stable at 96.5%, rising 0.8 b.p. to 99.1% in Portugal.
Total rents grew 3.1%, increasing 2.8% in Europe.
The company’s European development pipeline currently includes an urban regeneration scheme in Nuremberg (Germany), the McArthurGlen Designer Outlet Málaga (Spain), the new Shopping district in Parma (Italy) and the NorteShopping and Centro Colombo expansions in Portugal.
In the professional services area, Sonae Sierra signed a total of 77 new contracts in the first quarter of 2018: 72 for development services, three for property management, and two for investment management, for a total of circa €5.2 mln.