DAILY NEWS Dec 21, 2012 10:00 AM - 0 comments

CPPIB acquires stake in major Swedish shopping centre

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TORONTO 2012-12-21

Canada Pension Plan Investment Board (CPPIB) announced that it has signed an agreement to jointly acquire Kista Galleria Shopping Centre in Stockholm, Sweden alongside Citycon Oyj, a major owner and operator of shopping centres in the Nordic and Baltic countries. The transaction is based on a property value of approximately SEK 4.6 billion (C$691 million). Kista Galleria will be owned by a joint venture company controlled 50 per cent by CPPIB and 50 per cent by Citycon. CPPIB's equity investment will be approximately SEK 1.18 billion (C$177 million).

"This is our first real estate investment in the Nordic region and we are excited to acquire a stake in Kista Galleria, a prime shopping centre in Stockholm," said Graeme Eadie, senior vice-president, Real Estate Investments, CPPIB. "We look forward to partnering with Citycon on future investment opportunities in the region as we continue to expand CPPIB's retail portfolio in Europe."

Kista Galleria, one of the largest and most successful shopping centres in the Stockholm area, features a well-balanced array of 185 shops and restaurants as well as a cinema, bowling, indoor go-cart and other leisure activities. Located 15 minutes north of Stockholm's Central Business District, Kista Galleria has a gross leasable area of more than 90,000 square meters (969,000-square-feet) and the property also includes a hotel, student housing, healthcare premises and municipal services. With annual sales of over EUR280 million, Kista Galleria has average foot traffic of approximately 18.1 million visitors per year, the highest in Stockholm. The shopping centre underwent a complete renovation and large extension in 2002 and was further expanded in 2009.

Based in Finland, Citycon is a leading owner, developer and operator of shopping centres and commercial properties in the Nordic and Baltic countries. Citycon will be the asset manager for Kista Galleria.

At September 30, 2012, CPPIB's real estate portfolio totalled $18.0 billion which includes ownership interests in shopping centres in Canada, Australia, Brazil, China, Germany, Turkey, the U.K. and the U.S.

The transaction is expected to close in January 2013.

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