First, I want to say that I am thrilled to step in as the CEO of Citycon. Over the last couple of months, I have had the chance to spend time with our people and visit our assets. I am truly impressed both by the quality of the real estate and commitment of our staff.
Operational highlights
Our operational performance in January–March 2025 was robust:
- Like-for-like net rental income increased by 3.5% supported by indexation, lower operating expenses and improved recovery rate.
- Like-for-like footfall increased 2.4% compared with Q1/2024.
- Like-for-like tenant sales increased 1.2% compared with Q1/2024.
- There was a -50 basis point decline in the retail occupancy rate over the prior quarter due to normal seasonal variation.
- FX adjusted direct operating profit growth was 8.5% compared with Q1/2024.
Debt management
During Q1/2025 we continued to repay debt with proceeds from the bond issued in December 2024 and divestments closed in Q4/2024. In February we prepaid EUR 150 million of the RCF Term Loan maturing in April 2027 and in March we completed a EUR 100 million bond tender of the September 2026 bond, which is our nearest maturity debt.
In March, S&P Global Rating downgraded Citycon Oyj’s issuer credit rating from BBB- (negative) to BB+ (stable) while maintaining the issue rating on Citycon’s unsecured notes (bonds) at the investment grade rating of BBB-.
Post Q1/2025, we issued a new EUR 450 million bond in April which was more than six times oversubscribed, demonstrating our strong access to the capital market. Proceeds from the new bond will be fully used for repaying outstanding debt. In April we prepaid the remaining EUR 100 million of the RCF Term Loan and completed an additional EUR 100 million bond tender of the September 2026 bond. The remaining amount of the September 2026 bond is now approx. EUR 150 million.
Divestments
Our liquidity position is good and as the transaction markets are gradually improving, we are currently not under pressure to accelerate divestments. We will continue to divest non-core assets; however, we will prioritize making the right deals over fast deals - even if this results in a slower pace of divestments than previously anticipated. We are committed to value creation, not just transaction volume.
Guidance 2025
Operational performance for year 2025 is in line with our expectations and we do not anticipate any significant change in the operations during the year. However, due to the successful new bond issuance in April, our financial expenses for year 2025 are higher than originally forecasted. As a result of the increased financial expenses, we specify our guidance for 2025 by tightening the upper end of the guidance. The specified guidance is EPRA Earnings per share of EUR 0.41-0.50 and EPRA Earnings per share excluding hybrid bond interests of EUR 0.60-0.69.
Looking ahead
Citycon’s strategy will continue to rely on necessity-based assets in strong, growing, urban locations across the Nordic region. Our focus remains on managing our debt, improving operational performance and strengthening our balance sheet through strategic divestments and prudent financial management.
I would like to conclude by thanking our people for the hard work completed during this and the past quarters. Together we will continue to create value for all our stakeholders.
Oleg Zaslavsky
Citycon's CEO
Source: Citycon's Q1/2025 Interim Report