Presentation

Citycon acquires Kista Galleria
Press meeting / Investor meeting, 19.12.2012
We proudly present:
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Established and listed in Finland 1988 (NASDAQ OMX: CTY1S)
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Owner and manager of approx. 40 shopping centres in Finland,
Sweden, Estonia, Lithuania and Denmark
• Market leader in Finland (23 centres) and Estonia (3 centres)
• 9 centres in Sweden (before Kista), operational since 2005
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Total asset value EUR 2.7 billion (before Kista)
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Full control of centres by own local Citycon management
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High sustainability standards
Citycon has a focused strategy
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Geography
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Assets and
location
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Operation
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Finance
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Nordic and Baltic region
Shopping centres in growing cities
Urban locations connected to public
transportation
• Supermarket-anchored
Maximizing future potential through active retail
management
Solid financing policy
Supportive large shareholders (Gazit-Globe
approx. 48%, Ilmarinen 9%, as of 30.09.12)
• Top-tier joint venture partners
Kista Galleria: The deal in a nutshell
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Acquisition price approx. SEK 4.6 billion (MEUR 526)
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First-year net yield is expected to be approx. 5.5 %
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Citycon and Canada Pension Plan Investment Board (CPPIB) will
have a joint 50/50 ownership of Kista Galleria
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First investment in the Nordics for Canadian CPPIB, which has
many high quality global and European investments
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CPPIB’s involvement brings a seal of quality to both the asset
and the manager
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Citycon will be responsible for the asset and property management
of the shopping centre
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First joint investment by Citycon together with CPPIB
Kista Galleria today
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Retail sales, 2011: SEK 2.4 billion (280 MEUR)
• 3rd highest in Stockholm
Visitors: 18.1 million (2011)
• Highest in Stockholm
~90,000 m2 of leasable area, 60,000 m2retail
• 185 shops and restaurants
• Stockholm’s second-largest cinema
• Hotel with 166 rooms
• 10,000 m2 of student housing
• 9,000 m2 of health care/services
Accessibility
• Integrated with Kista metro station,
17 min from the Stockholm CBD
• Close to major highway systems
• Parking facility with 2,500 parking spaces
Opening hours
• 10 am to 9 pm, daily
• Longest opening hours in Stockholm
Kista Galleria’s milestones
• Built in 1977
• Redeveloped and extended in 2002
• Extended in 2009
Welcome to Kista City!
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Kista City: As urban as it gets
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Kista is more than a shopping centre!
Strong residential growth and growing purchasing power
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Sweden is among the strongest economies in Europe
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Stockholm is among the fastest growing European cities, set to
rise by 23% by 2025 (from 2.1 million to 2.6 million)
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Total catchment 345,000 inhabitants, of which primary
catchment area 125,000 + 70,000 workers per day
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Purchasing power in Kista Galleria’s catchment will grow by 62%
by 2025, driven by population and economic growth
Kista - Growing Kista Science City
Largest office sub-market outside city centre, over 1 million m2
office space
• Kista is Sweden’s foremost ICT* hub with companies and
universities such as:
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Additional key properties
• Kistamässan – Stockholm’s second largest exhibition centre
• Victoria Tower – 35-story hotel adjoining Kistamässan
• Kista Science Tower – 32-story office tower
• Newly built Kista Torn – highest residential building in Sto
• A natural footfall of over 50,000 daily visitors to Kista Galleria
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Infrastructure: All roads lead to Kista City
Kista has a busy metro station and
bus terminal
• 25,000 people use the metro or
bus in Kista daily
• E4 and E18 motorways will be better
connected
• The new junction Trafikplats
Ärvinge will serve 115,000
vehicles daily
• All major road work is scheduled
to be completed 2015
• The access to Kista will be
considerably improved
• Helenelund commuter train station
close by
• New tram line will improve
Kista’s link to the commuter train
in 2018 (est. daily users 34,000)
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Kista Galleria: SWOT
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Strengths
Opportunities
Location and traffic
connections
Expansion possibilities driven
by Kista City concept
Weaknesses
Threats
Unbalanced footfall
Competition will get tougher
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Kista Galleria: Development opportunities in three stages
1-3 years:
• Expand seating area in the food
court
• Improve footfall in the extension
opened in 2009
• Carry out a face-lift programme
3-5 years:
• Commercialize roof top
• Further optimize food court
• Intensify centre with residential,
medical and/or hotel facilities
>5 years:
• Build extension of up to 10,000 m2
retail space towards the metro
station
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Kista Galleria: Investment and Financing
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Investment rationale
Attractive first-year net yield is expected to be approx. 5.5 %.
Strategic acquisition that makes Citycon one of the three largest
players in the Swedish market
• More balanced portfolio geographically within Citycon
(Sweden’s share increases from approx. 25% to 40% in NRI)
• Strong and unique location
• Strong natural catchment area with a growing/improving
residential area and expanding office sub-market
• Excellent infrastructure in terms of public transportation and
road access
• Dominant shopping centre in its catchment area
• Development and extension opportunities
• Opportunity to potentially grow the CPPIB joint venture
platform in the Nordics
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Portfolio balance
Net Rental Income of Business Units on Sept. 30, 2012
Net Rental Income of Business Units with Kista
12,1 %
15,1 %
48,6 %
24,4 %
60,5 %
39,3 %
GLA of Business Units on Sept. 30, 2012
GLA of Business Units with Kista
13,1 %
11,9 %
27,4 %
54,4 %
59,5 %
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33,7 %
Financing of the acquisition
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Citycon will finance half of the acquisition with a stand-alone
property-based loan financing jointly with CPPIB, and the
remainder of Citycon’s part from its existing lines of credit and
cash.
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Citycon also considers possibilities to re-finance up to 50% of
company’s investment by issuing new equity through a capital
increase in order to strengthen its balance sheet.
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The details of such capital increase are still in the planning
stages and any decision is subject to approval by the
shareholder’s General Meeting.
Financial impact of the acquisition
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The investment will be fully consolidated to Citycon
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Balance sheet will grow by approx. EUR 530 million to approx.
EUR 3.3 billion from EUR 2.8 billion (Q3 2012)
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Will increase company’s net rental income, operating profit and
earnings
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By bringing Kista under Citycon’s management it will be
possible to improve Kista’s performance due to economies of
scale, as well as to improve the efficiency Citycon’s Swedish
operations
Contact information
CITYCON
Mr Marcel Kokkeel
CEO
Tel. +358 207 664 521
[email protected]
Mr Eero Sihvonen
CFO, Exec. VP
Tel. +358 50 5579 137
[email protected]
Mr Nils Styf
CIO
Tel. +46 733 5060 39
[email protected]
CPPIB
Linda Sims
Director of Media Relations
Tel. +1 416 868 8695
[email protected]
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Additional information
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Citycon’s geographical overview with key figures
Q1-Q3 2012
Citycon Total, EUR million
FINLAND
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Turnover Q1-Q3/2012: 177.1
Market value 30 Sept’12: 2,695.5
Net rental income: 119.9
Market leader
Net rental income EUR 72.5 million
60.5% of total net rental income
Currently 23 shopping centres, 35 other
retail properties, one unbuilt lot
SWEDEN
Net rental income accounted for 24.4% of
Citycon’s total NRI
• Net rental income EUR 29.3 million
• 9 shopping centres, 5 other retail
properties
Sweden (€m)
Finland (€m)
743.2
1,640.9
47.2
MV
TurnProperty over
105.9
29.3
Net
Rental
Income
Net
MV
TurnRental
Property over
Income
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BALTIC COUNTRIES AND NEW BUSINESS
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NRI 15.1% of Citycon’s total NRI
Includes the Danish Albertslund Centrum
Net rental income EUR 18.1 million
5 shopping centres, 3 countries
Baltic Countries and
New Business(€m)
311.4
24.0
MV
TurnProperty over
72.5
18.1
Net
Rental
Income
Canada Pension Plan Investment Board
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CPPIB is based in Toronto and its purpose is to invest the assets of the Canada
Pension Plan
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The CPPIB Fund is C$170 billion of which C$18 billion (approx. 11%) is real estate
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The real estate portfolio contains mostly office and retail properties located in major
centres across Canada, US, UK, Australia, Mexico, Brazil, Europe and the Asia-Pacific
region
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CPPIB invests in assets through joint ventures and real estate funds
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A key strategy for CPPIB in their joint venture investments is to partner with top-tier
investment managers around the world
Real Estate
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Current real estate JV partners include:
• Aliansce Shopping Centre SA
• Ancar Ivanhoe Shopping Centres
• The Westfield Group
• ING Real Estate
• Grosvenor
10,70%
Key ongoing property development projects in Kista City
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SEK 600 million hotel and office property development
completed in 2011
• 299 hotel rooms
• 5,000 m2 office space
Developed next to the Kista Fair
• 20,000 m2 expo center built in 2008
• Over 60 trade fairs per year
Developed by Arthur Buchardt, Norwegian hotel investor
• Hotel is operated by Scandic Hotels
NOD
Victoria Tower
ongoing
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SEK 700 million office/educational property development
• 25,000 m2
Developed by Atrium Ljungberg
Main tenant is Stockholm University, pre-let of ca 30% of
space
Construction has started and the project will be completed
in Q1 2014
Kista Torn
ongoing
KISTA TORN
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30 and 17 floor residential buildings next to Kista Galleria
• 290 apartments
At 120 meters – Stockholm’s tallest residential building
Developed by Swedish developer JM and its subsidiary AB
Borätt
• Sales started in November 2012
• Apartments will be sold as condominiums
Estimated completion in Q3 2014
Additional pipeline expected (new developments and redevelopments) to cater for
the anticipated growth in workers, students, researchers and residents
Kista: Residential developments
• In the next 10 years, 3,500 apartments and single-family
houses are planned for construction in Kista
• Areas include Kista Gård, Kista Äng, Kistahöjden and
Kista Torn
• Developers include NCC, Ikano, Veidekke, Einar
Mattsson and Familjebostäder
• The Municipality of Stockholm aims for a population
increase of 20,000-40,000 people within 15 years
• Apartments will consist of a mix of condominiums and
rental apartments, which will raise the income level
• Construction has started in Kista Gård and will start in
Kistahöjden and in Kista Äng during 2013
Kistahöjden
Old IBM campus
Kista Äng
NOD
Kista Gård
Kista Torn
• In the next ten years, 3,500 new apartments will be
built in Kista
• 2,000 of these will be finalized by 2018
• An increase of 20,000-40,000 people within 15 years
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