Anxious to take advantage of the favorable real estate investment climate before it fades any further, Carrefour SA, the French rival to Wal-Mart and the second-largest retailer in the world, announced in late August plans to sell a 20 percent stake in its Carrefour Property unit through an IPO to take place next year. The unit owns approximately 60 percent of Carrefour's real estate portfolio, which includes 280 superstores and 540 supermarkets among its thousands of stores worldwide.
The move comes just months after French billionaire Bernard Arnault, CEO of luxury goods seller LVMH Moet Hennessy Louis Vuitton SA, and Los Angeles-based real estate investment firm Colony Capital, LLC acquired a 9.8 percent stake in Carrefour for approximately $5.2 billion. At the time, analysts speculated that the partners had their eye on Carrefour's real estate assets. As of July, the company operated 12,928 stores, valued at $33 billion. The 20 percent stake in Carrefour Property is worth anywhere from $5.4 billion to $7.3 billion, Carrefour officials estimate.
The publicly traded retailer plans to use the money generated through the sale to fund a stock buyback. Carrefour's stock fell earlier this year when its sales numbers missed analysts' expectations. To put itself back on the right track, the company decided to close shop in Portugal and Switzerland after its efforts to become one of the top three supermarket chains in each country failed.
Going forward, Carrefour plans to double its store growth, targeting approximately 13 million square feet in new openings a year. The company wants to focus on emerging markets, including China, Brazil, Indonesia, Turkey and Poland.