Citycon has entered into an agreement to purchase shopping center Albertslund Centrum in Greater Copenhagen area in Denmark from the Municipality of Albertslund for DKK 181 million (approximately 24 million).
The shopping center's gross leasable area is currently approximately 16,000 m²; the transaction includes a purchase of a grocery store extension which will be bought at the time of its completion in the end of 2014.
The extension will increase the GLA to approximately 20,000 m². The occupancy rate of the shopping center is 97.5%. On the acquisition date, the net initial yield on the investment is approximately 7.5%. The deal is expected to be closed in July.
TK Development acted as an advisor in the transaction. Citycon and TK Development have signed an agreement regarding future management of the shopping center that enables Citycon not to hire any personnel in Denmark at this stage.
Albertslund Centrum is an open-air local shopping center with 45 shops located in the center of the municipality of Albertslund approximately 17 km east of city center of Copenhagen. The shopping center is located next to the train station which provides the center with steady footfall.
The shopping center is anchored by grocery tenants Superbest and Aldi. A third large supermarket will open in the future extension. The shopping center is a community center that serves as the social hub of the Albertslund municipality providing, in addition to retail, municipal services, town hall, theatre, cinema and offices. The municipality of Albertslund is going to further develop the area in the near future.
"This acquisition reflects Citycon's commitment and ability to implement the company's strategy of expansion to other Nordic countries. Our goal is to accretively diversify our cash flows. The acquisition of neighborhood center in the capital area is the first and solid step to the Danish market," says Marcel Kokkeel, CEO of Citycon.
Citycon will finance the acquisition from existing credit facilities in local currency, in accordance with the company's financing policy. The acquisition of Albertslund Centrum will increase Citycon's rental income and it is expected to be accretive to Citycon's earnings per share.
Following the acquisition, Citycon will own a total of 37 shopping centers in Finland, Sweden, Estonia, Lithuania and Denmark. In addition, the company manages two shopping centers in Finland without owning them.