Since 2000, Corio has grown from a Dutch mixed retail fund to a pan-European real estate company with a clear focus on retail. The company has a presence in the largest consumer markets in continental Europe, management is fully in-sourced and the business has a solid financial position. In the changing retail landscape Corio is now ready to enter the next phase and take advantage of future opportunities and dynamics in the industry. 

STRATEGY

At the end of 2012 Corio set a number of medium-term (3 to 4 years) objectives aimed at implementing our strategy, enhancing the quality of the portfolio and growing results for our stakeholders. We provide you with an update as to where we stand on the four major objectives we set ourselves.

EXECUTE DISPOSAL PROGRAMME
Corio sold and transferred €225 million of assets in 2013 and has sold another €357 million of assets that will be transferred early 2014, bringing the total amount of disposals since the start of the programme to €582 million. The disposals of in total 27 properties were made to a number of investors. In executing this, Corio is ahead of its 3-4 year plan. We increased the quality and average size of our centres in terms of value from €87 million at year-end 2012 to €116 million.

BRING LEVERAGE DOWN
By speeding up the disposal programme we made good steps in bringing down leverage to around 41% (after proceeds from all signed disposals), still short, however, of our target range of 35% to 38%. At year-end 2013 the leverage was 43.7%. Predominantly negative revaluations have slowed the process of reaching this target. We will continue our disposal programme to fund the pipeline at a controlled leverage. Parallel to this, a better operational performance would bolster property values. On top of that continued and sound capital recycling process and a more sustainable dividend policy will bring us to the desired levels.

REDUCE ADMINISTRATIVE EXPENSES
Despite being in a transition year the administrative expenses as a percentage of GTRI came down from 8.9% for 2012 to 7.6% in 2013. Knowing that this large step forward also reflects higher charged out expenses, we expect a relative increase in 2014. We are confident, however, that we will reach the targeted level of 8% as a yearly average over the long term.

CULTURE
A vigorous execution of our strategy is important, as is greater agility and a cash flow driven mind-set to enable this to happen. We are changing our operating model pushing accountability down the command chain. Stronger cooperation between management board and country management is implemented. We took out management layers. Shortening communication lines and being close to the business will improve execution power. This will bring a positive stimulus and ensure centre managers and leasing managers will stay focussed on execution.