On 19 December 2012, Citycon Oyj and the Canada Pension Plan Investment Board (CPPIB) announced that they will buy the Kista Galleria shopping centre in Stockholm, for approximately SEK 4.6 billion. The closing of the acquisition took place today on 17 January 2013. The acquisition price corresponds to approximately 530 million euros with the closing date’s exchange rate. Citycon and CPPIB will each own one half of the shopping centre.
Kista Galleria is one of the largest and most successful shopping centres in the Stockholm area. It attracts about 18 million visitors each year (source: Kista Galleria Ab and Centrumutveckling), more than any other in the area, with annual sales amounting to EUR 280 million, which is the third-highest figure in Stockholm. Kista Galleria has a total of 185 retail stores and restaurants, plus movie theatres, a bowling alley, an indoor karting track and other leisure activities. The centre's gross leasable area is approximately 90,000 square metres, of which 60,000 square metres is in retail premises. One of the main motivations behind the acquisition is Kista Galleria's excellent location in the heart of one of the fastest-growing areas in Europe. The details of the acquisition have been published in Citycon's stock exchange and press releases published on 19 December 2012, and on the company's website.
Marcel Kokkeel, Chief Executive Officer at Citycon: “We are extremely proud to add the high-quality, busy Kista Galleria to our shopping centre portfolio. Citycon is the shopping centre market leader in Finland. This investment will balance the importance of our different business areas in our portfolio, which is in line with our strategy. It will also secure our position in the quickly-growing city of Stockholm. After the acquisition, Swedish operations will account for about 40 per cent of our rental income, which will make Citycon one of the top three shopping centre owners in Sweden.”
On 14 January 2013, Citycon and CPPIB signed a stand-alone asset backed loan agreement totalling SEK 2,290 million (approx. EUR 265 million) in order to finance the shopping centre investment. The loan is secured by Kista Galleria. The loan period is for five years. The loan is granted by Skandinaviska Enskilda Banken AB (publ) which also coordinated the transaction, and Swedbank AB and Aareal Bank AG. At the time of closing the acquisition, Citycon also announced that it would finance the rest of its share by using existing credit facilities and that it would consider arranging a share issue in order to raise equity. The details of the capital increase are being planned and are subject to approval by the shareholder’s General Meeting to be held on 6 February 2013.
“I am pleased with the response from banks regarding financing of Kista Galleria and especially that we were able to finalize the debt financing in such a smooth and expedient manner. This demonstrates in my opinion the strength of our bank relationships and proves that companies and institutions with good, long-term relationships with banks, such as Citycon and CPPIB, have access to competitive debt financing, despite the challenging market situation,” Sihvonen says, and adds, ”Although most of our portfolio consists of unsecured loans, in this case we decided jointly with our partner CPPIB to go for a secured asset backed financing."
Citycown owns or manages a total of 38 shopping centres and 40 other retail properties in Finland, Sweden, Denmark, Estonia and Lithuania.
Helsinki, 17 January 2013
CITYCON OYJ
For further information, please contact:
Eero Sihvonen, Chief Financial Officer and Executive Vice President
Tel. +358 020 766 4459 or +358 50 557 9137
eero.sihvonen@citycon.fi
Marcel Kokkeel, CEO
Tel. +358 20 766 4521 or +358 40 154 6760
marcel.kokkeel@citycon.fi
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