Citycon expands its operations into Sweden
Citycon Oyj has signed an agreement on 18 May 2005 under which Citycon buys 75
percent of the shares of Armada Exploaterings AB. Purchase price was 49.9 million
Swedish crowns (EUR 5.4 million). Armada Exploaterings AB owns the Åkersberga
shopping centre located northeast of Stockholm. The total value of the properties
belonging to the shopping centre is approximately 440 million Swedish crowns (EUR
47.7 million). The seller is Armada Fastigheter AB which is owned by the
municipality of Österåker. Following the transaction Armada Fastigheter AB will
continue to own 25 percent of Armada Exploaterings AB. The title to the
acquisition target will be transferred to Citycon on 1 July 2005.
Citycon and the municipality of Österåker will start to develop the shopping
centre together. Citycon will buy the outstanding shares of Armada Exploaterings
AB after the expansion is completed. This is Citycon's first foreign investment
as a part of its internationalization strategy.
The Åkersberga shopping centre is an important part of the centre of the
municipality of Österåker, which is located about 30 kilometres from Stockholm.
About 37,000 inhabitants currently live within the catchment area of the shopping
centre. Åkersberga is a growth centre, and its population and number of jobs are
estimated to increase significantly.
Citycon will start to develop the Åkersberga shopping centre by expanding it, and
modernizing the existing premises. The shopping centre has 33,000 square metres
of retail premises, offices and residential. Currently about 80 companies operate
in the shopping centre, of which about 40 are retail businesses.
The first international investment
"The acquisition of the Åkersberga shopping centre is the first international
investment as a part of Citycon's growth strategy. Our aim is to carry out more
foreign investments and build a property investment company that operates
throughout the Nordic countries and Baltic states, and takes an active role as
owner of its properties.
"Åkersberga has great development potential. Active development of the property
can have great benefits to the shopping centre's customers and the tenants of the
real estate," said Petri Olkinuora, CEO of Citycon.
Åkersberga, estimated key figures
Floor space Pre-expansion Post-expansion
m2
Retail premises 20,300 31,500
Office space 800 800
Residential 12,000 17,500
Other 200 200
Total 33,300 50,000
Annual gross rental income,
millions of Swedish crowns 48.0
Annual net rental income,
millions of Swedish crowns 30.9
Net yield* 8.0 percent
Occupancy rate about 100 percent
Anchor tenants: Hypermarket ICA, Kapp-Ahl, Lindex, Kick's, Nordea Bank,
ON OFF
Total turnover in 2003,
millions of Swedish crowns 482
Annual visitors, millions about 4.5
*Does not include property acquired for the expansion
A profitable investment
The annual net yield of Citycon's investment at the time of the signing is about
8.0 percent. By 2009 the development project will be completed which will
transform the shopping centre into a unified complex. The total investment in the
development project will be 900-950 million Swedish crowns, and the annual net
yield of the investment is projected to be about 9.0 percent.
Citycon will initially finance the acquisition through a bank loan
Citycon is specialized in the shopping centre business
Citycon is a Finnish property investment company specialising in retail premises.
The company leases, manages and develops its property portfolio and also plans
and commissions the construction of new premises. Citycon Oyj is a publicly
traded company, and its shares are quoted on the Helsinki stock exchange.
Citycon owns 144 properties. On 31 March 2005, these properties had a total fair
value of EUR 736.4 million and net yield of 8.7 percent. The company's property
portfolio is concentrated in the Helsinki Metropolitan Area and Finland's largest
cities.
In 2004, Citycon had turnover of EUR 88.6 million, and gross rental income from
its property portfolio stood at EUR 83.2 million. About 44.9 percent of the
income came from the properties in the Helsinki Metropolitan Area, and 35.7
percent from properties in other cities.
Citycon's strong expertise in business facilities, the constant improvement of
its properties and its comprehensive property portfolio facilitate the creation
of long-lasting customer relationships and efficient service for customers,
including large retail chains.
Citycon is an expert in retail premises and a partner for its tenants. The
company creates opportunities for tenants' business development by monitoring
intensely tenants' needs and market situation.
Helsinki
19 May 2005
Citycon Oyj
Board of Directors
For more information, please contact:
Petri Olkinuora, CEO
tel. +358 9 6803 6738 or +358 400 333 256
petri.olkinuora@citycon.fi
Pirkko Salminen, CFO
tel. +358 9 6803 6730 or +358 50 3022 485
pirkko.salminen@citycon.fi
Distribution:
Helsinki stock exchange
Main news media
www.citycon.fi