Citycon has published its figures for the year 2004. The highlights include: profit before taxes increased 26.7% to â¬24.2 million (â¬19.1 million), turnover increased to â¬88.6 million (â¬78.1 million), earnings per share were â¬0.17 (â¬0.14), the proposed dividend is â¬0.14 per share (â¬0.14 per share).
Development in retail business continued to be favourable in Finland. In 2004, the value of retail sales was 4.3% higher than in 2003. The value of department store sales increased by 4.8% and trade in groceries by 1.4% on the previous year.
Strong retail sales kept up healthy demand for leased retail premises throughout the year and vacancy rates continued to remain low, particularly in the Helsinki Metropolitan Area and Finlandâs other major cities. The average vacancy rate for retail premises was below 2% in the Helsinki Metropolitan Area and 1.1-4.5% in the larger cities, such as Tampere, Lahti and JyvÃ¤skylÃ¤.
Foreign investorsâ interest in the Finnish property market continued to grow and the
internationalisation of the market continued. Commercial premises and the Helsinki Metropolitan Area as a region are particularly attractive to investors. The deals made by international investors accounted for roughly 50% of Finnish transactions on investment properties in 2004.
Property portfolio and business activities
At year-end, Citycon owned 146 (148) properties with a combined book value of â¬732.1 million (â¬721.8 million) and a fair value of â¬738,7 million (â¬726.5 million). Practically the whole of the companyâs property portfolio consists of retail properties. The company owned 16 shopping centres and 130 supermarkets and shops. Shopping centres accounted for 59.0% of the company property portfolioâs book value and supermarket and shop premises for 41.0%. At year-end, in terms of book values, 46.6% were in the
Helsinki Metropolitan Area, 35.7% were in other major Finnish cities and 17.7% were in other parts of Finland. Citycon Oyj is assessing opportunities for expansion in the Scandinavian and Baltic countries.
At the same time, the company continued the implementation of its growth strategy in Finland. The company will continue to focus on retail premises, mainly in the Helsinki Metropolitan Area and other major cities.
Customers, the portfolio of leases, and the occupancy rate
Cityconâs customers are Finnish and international speciality and grocery retail chains, supermarkets and department stores, and retailers who are not part of chains. There were no significant changes in the customer base in 2004.
During the financial year, the company signed a total of 325 leases. At the end of the financial year, Citycon had a total of 1 486 leases with roughly 850 lessees. The average length of the leases was 3.4 years.
The occupancy rate for Cityconâs property portfolio at year-end was 95.7% (97.3%). The decline in the occupancy rate was due primarily to the end of the lease on LÃ¤nsikeskus in Espoo, which belongs to the Supermarkets and Shops division, on 31 October 2004. The occupancy rate for Cityconâs property portfolio without LÃ¤nsikeskus was 96.9% and that of the Supermarkets and Shops division was 96.2%. Citycon made a new lease for LÃ¤nsikeskus in Espoo with a new grocery chain in the area. The lease will commence in March 2005.
The net rental income of Cityconâs leasing business was â¬62.1 million (â¬54.7 million). The average net rental yield of the properties owned by the company remained good and was 8.5% (8.5 %). Shopping centres accounted for 56.5% of the net rental income (50.2 %) and supermarkets and shops accounted for 43.5% (49.8 %). Of net income, roughly 46.0% was generated by properties in the Helsinki Metropolitan Area, 36.0% by properties in other major Finnish cities, and roughly 18.0% by other properties in Finland.
Investments and development projects
Cityconâs gross investments in 2004 amounted to â¬18.5 million (â¬84.2 million).
Gross investments include the acquisition of a new shopping centre, Tor