CEO F. Scott Ball:

"Citycon’s operational performance remained solid and the total net rental income grew to EUR 109.7 million during the first half of 2019. Like-for-like net rental income grew over 2018 and we were pleased to see a stable like-for-like development in Finland after many subdued years. EPRA earnings continued to grow and the EPRA EPS reached EUR 0.418 during January-June 2019. The occupancy rate also remained stable at the high level of 95.6%.

We continued to take steps to further strengthen our asset management during January-June 2019. We introduced a new organization in the first quarter of the year and the onboarding continued during the second quarter. This new organization provides consistency across the countries and enables us to intensify our asset management efforts. I am also pleased that we strengthened our team with several key recruitments during the quarter, including Erik Lennhammar, who will join our Corporate Management Committee in August 2019 as the new Chief Development Officer. He will be a great addition to our team thanks to his broad background in asset management and property development in various sectors. Together with the strengthened development team, we will begin to exploit the various densification opportunities within our portfolio.

Citycon once again received recognition for the Iso Omena shopping centre during the second quarter. In April, this project was awarded the best large shopping centre expansion project in Europe by the International Council of Shopping Centres and in June, it was awarded the best shopping centre in the Nordics by the Nordic Council of Shopping Centres. Iso Omena is the prototype of the type of asset we want to own in the future. Further, these recognitions are a great acknowledgement of our strategy and of our development capabilities. In particular, the service square in Iso Omena, which combines a range of the City of Espoo’s municipal services from a library to medical services, has received praise from visitors and also several global acknowledgements. In May, we announced that a similar service square concept will be launched later this year in our shopping centre Trio in Lahti, Finland. The service square will be a great addition to the shopping centre and we are confident it will drive further footfall to the centre. It is also a great example of our intensified focus on asset management.

We continued to take action to strengthen our balance sheet during January-June 2019. During the second quarter of the year, we sold two shopping centres in Finland for EUR 77 million. The disposal price was in line with the assets’ latest IFRS fair value, which demonstrates that there is investor demand for good retail assets and is a further confirmation of the stable value of our assets. In addition, we agreed to sell another land plot adjacent to our Columbus shopping centre in Helsinki, Finland during the quarter with the buyer intending to build 900 residential units which will further strengthen our shopping centre. We will continue to recycle capital going forward as our vision is to focus on multi-functional properties that are connected to public transportation in growing urban areas.

We have a very stable business model with the clear majority of our leases linked to indexation. In addition, our diversified tenant mix with a relatively low share of fashion tenants, has helped us weather the headwinds the retail sector is facing. After six months of solid performance and completed disposals of two shopping centres, we have specified our guidance. We now expect EPRA EPS to be in the range of EUR 0.785-0.850 for the full year 2019.“

 

 

 

 

Source: Citycon's Interim Report H1/2019

Updated

11.07.2019