Multinational retailer Carrefour has signed a memorandum of understanding to acquire 127 shopping malls for 2.01-billion euros.

Carrefour will acquire malls in France, Spain and Italy from real estate investment company Klepierre, and form a new company for its European shopping malls.

The portfolio from Klepierre has a gross annual rental income of around 135-million euros. The transaction consists of 57 malls in France (70 per cent of the total transaction value), 63 in Spain (19 per cent of total value) and seven in Italy (11 per cent of total value).

The portfolio consists of small- to medium-sized shopping malls, with a total area of approximately 476,000 square metres.

Under the agreement, Klepierre will not retain the asset and property management contracts for this portfolio. The transaction is one of Klepierre’s efforts to rebalance its portfolio to focus on core regions including Lyon, France; Latium in Rome, Italy; and La Gavia in Madrid, Spain. As a result of the transaction, Klepierre will operate 129 shopping malls, down from 256.

Carrefour’s new company will include 172 shopping malls, which includes the acquisitions plus 45 shopping malls in France from Carrefour. The company’s portfolio will be made up of more than 800,000 square metres of retail space and assets worth 2.7 billion euros. There is a value-creating plan, which will include renovation, modernization and extension of the malls.

The transaction is subject to final agreement between the parties and approval from regulatory authorities. It is expected to close in the first half of 2014.