CEO Marcel Kokkeel:
For Citycon, 2016 was a year of continued portfolio and operational improvement as well as finalisation of the integration of the Norwegian business. EPRA Earnings per share was close to last year’s level despite an 18% increase in the average number of shares supported by successful cost management. In general, the occupancy rate remained at a high level driven by the everyday nature and good locations of our shopping centres.
The year demonstrated the strength of Citycon’s diversified Nordic strategy: a strong Sweden and Norway compensates for weaker Finnish performance. During the first full year of operations our Norwegian business delivered strong like-for-like net rental income growth of 3.6%.
Recycling of capital and improving the quality of the portfolio has been a top priority for management. We divested non-core assets for EUR 120 million, acquired an asset in Bergen for EUR 78 million enabling us to extend our shopping centre, and invested approximately EUR 230 million in (re)developments, including Iso Omena and Mölndal Galleria. The high level of (re)development activities has put some pressure on earnings during the year; however, the quality of earnings is continuously increasing. We plan to divest another EUR 200-250 million worth of non-core assets mainly in Finland and Norway. We will reinvest in assets where we see higher growth potential. As a Nordic company our portfolio should ultimately be a reflection of the strength and the size of the countries we operate in.
A clear highlight of the year was the successful opening of the first part of the Iso Omena extension. Footfall increased by 35% in December compared to the previous year. Four months before the opening of the second phase pre-leasing has exceeded 95% for the entire shopping centre. Our flagship Iso Omena is a great example of our strategy of developing urban crosspoints where diverse everyday shopping and services are complemented by a variety of restaurants, public services as well as leisure and entertainment activities.
The successful 10-year Eurobond issued in September at a fixed 1.25% coupon demonstrates that Citycon’s credit profile is strong and that we have good access to bond financing at attractive terms. We remain committed to our long-term Loan to Value target of 40-45%.
Source: Citycon's Financial Statements Release, January-December 2016