Citycon delivered another year of solid performance in 2025, underscoring the resilience of our strategy and the continued strength of our necessity based retail portfolio in the Nordics. Our centres remain increasingly attractive for both tenants and visitors. The strong demand for our centres from tenants resulted in an increase in the retail economic occupancy rate, which improved by 20 bps from the previous year-end to 95.5% in Q4/2025. While the growing like-for-like footfall highlights the continued interest towards our centres from visitors. The strong demand for our centres supported the increase of average retail rent which grew by EUR 0.9 per square meter, compared with year 2024 and measured at comparable exchange rates. Altogether these factors supported us achieving a strong like for like net rental income growth of 5.4% in year 2025.
Throughout the year, we secured several notable new leases with long term, high quality tenants. These new leases include well-known brands such as McDonald’s, Burger King, CCC and Rusta as well as several groceries like ICA, Coop Mega and Rema. Similarly, these signings reflect the continued demand for well located, mixed use centers anchored by necessity-based retail. Overall, we see positive momentum towards necessity-based assets and this momentum gives us a strong platform heading into 2026.
These strong operational achievements during the year were further reflected in our asset valuations. For year 2025 we booked a fair value gain of EUR 51.1 million. In line with company’s policy our portfolio was externally appraised in Q4.
During the year, we continued to focus our portfolio through a strategic divestment, completing the sale of the three Lippulaiva housing companies for a total gross price of EUR 61.5 million. The price was at the latest book value of the assets. This transaction supports our long term direction of concentrating on our retail centers with necessity based retail as the core. We see positive signs in the transaction market. We believe the continued strength of the secured lending market will likely bolster transaction volumes in the year ahead.
2025 was also a year of significant progress in strengthening our balance sheet. We used proceeds from previous divestments to reduce debt and derisk the balance sheet. We extended our average debt maturity through the successful issuance of a 6.25 year EUR 450 million bond which was several times oversubscribed. The proceeds from the new bond were used to repay existing debt. Altogether, we repaid over EUR 870 million debt during the year, resulting in a notable 240 bps reduction in the IFRS LTV which was 44.9% at the end of 2025.
At the beginning of 2025, we announced an organisational transformation toward country level operating models, increasing accountability, enhancing efficiency, and reducing costs. The implementation of this change was successfully finalised in Q4/2025. As a result, property operating expenses decreased by 14% compared to 2024. Looking ahead to 2026, we remain focused on strengthening the commercial performance of our assets, driving rental income growth, and investing selectively in energy and sustainability projects that improve efficiency and drive long term value creation. We have set ambitious goals for the year, and we are well positioned to continue delivering stable results. We will also continue to focus on optimising our portfolio by identifying and carrying out potential non-core asset divestments in the amount of approximately EUR 1 billion in the next 24 months. In line with this we present EUR 510 million assets in assets held for sale in the 2025 full year results.
Finally, I want to express my gratitude to all Citycon employees for the achievements during 2025, thank you for your good work.
Eshel Pesti
Citycon's CEO
Source: Citycon's Q1-Q4/2025 Financial Statements Release