Colony Capital head Tom Barrack has reportedly said French supermarket chain Carrefour could earn around €30 billion ($40 billion) by selling off its property assets.
At the same time, Carrefour chief executive officer Jose Luis Duran has said the property is worth no more than €20 billion—but that didn’t stop the company’s stock from hitting a five-year high in trading yesterday.
“Duran is perfectly capable of launching and implementing such a program,’’ Barrack told news service Bloomberg last week. “Capital can work harder and more profitably if it’s not burdened by long-term real estate ownership.’’
Earlier this year, Los Angeles-based private equity real estate firm Colony acquired 9.1 percent of Carrefour alongside French billionaire Bernard Arnault, who owns French luxury goods company LVMH Moet Hennessy Louis Vuitton.
The pair spent €4 billion to purchase 64 million shares of Carrefour, with the expressed intent of capitalizing on the company’s real estate.
Barrack maintains that the chain should sell and leaseback its property in order to fund further expansion. The retailer has an extensive property portfolio with more than 6 million square meters of commercial space.
Colony pursued a similar strategy when it invested €1 billion in French hotel group Accor in 2005. Since then, the company has disposed of a significant amount of real estate. Last month, for instance, Accor announced the sale of 91 hotels in the Germany and Netherlands for €868 million to London property investment group Moor Park.
Since Colony made its investment in Accor, the company’s shares have risen from a low of €29 per share to €67 per share.
Carrefour is one of the largest supermarket chains in the world and currently operates or franchises 12,000 stores in 29 countries. The company’s stock jumped 3.4 percent in Paris on Wednesday, climbing €1.91 to €57.67.