Citycon Oyj specialising in retail premises, has today acquired the Rocca al Mare Shopping Centre in Tallinn, the capital of Estonia. Citycon also acquired the neighbouring land with city planning for future extension. The right of possession was transferred to Citycon at the date of acquisition.
The total debt-free purchase price was 62.1 million and the net yield of the existing shopping center at the date of the transaction was 8.5% excluding the additional land. This acquisition opens the Baltic market to Citycon and contributes to the company's expansion strategy in Scandinavia and the Baltic countries.
"Citycon acquired its first shopping center in the Baltic area and will start to build its extension of 25.000 m² as soon as all permits have been obtained and subject to successful marketing of the retail premises. Citycon has now implemented its growth strategy by investing in prominent shopping centers in Sweden and Estonia. We are actively looking for possibilities to continue our growth both in these areas and in Finland", says Citycon's CEO Petri Olkinuora.
Rocca al Mare's occupancy rate is close to 100%. The shopping center's anchor tenants are the Finnish retail chains Prisma and Hobby Hall. The estimated total sales volume of the shopping centre for 2004 was 37.0 million, with roughly 4.5 million customers visiting annually.
The aim of the potential extension project is to improve the property's competitiveness and ensure its solid commercial position in the future. The permitted building volume of the land acquired for the extension is 25,000 m² Citycon expects to start the extension project already this year provided that all necessary approvals will be obtained. The extension is scheduled for completion within three years. Estimated investment of the extension project will be approximately 20 million. Once the extension is complete, the annual net yield of the shopping center is expected to exceed the present net yield.
Rocca al Mare key figures after extension (2008):
Leasable area: 48,400 m² (1998/2000: 28,400 m²)
Number of shops: 105 (1998/2000: 105)
Number of parking lots: 1,820 (1998/2000: 1,100)
Citycon will initially finance the acquisition through a bank loan arranged by Nordea Bank Finland Plc.
Citycon is Finland's market leader in the shopping center business, owning a total of 16 shopping centers in the Helsinki Metropolitan Area and other regional centres in Finland, as well as the Åkersberga shopping center in Sweden as of 1 July 2005.
In addition to the shopping centers, Citycon owns 127 supermarket and shop properties in Finland. The market value of Citycon's property portfolio was approximately 754.7 million on 30 June 2005, of which shopping centers accounted for 60.9% and supermarkets and shops for 39.1%.