Retail landlord Citycon is scanning Norway for new development opportunities and extensions, the company's CEO Marcel Kokkeel told PropertyEU.
The Helsinki-listed company added the large Norwegian market to its portfolio in May 2015 following the acquisition of Sektor Gruppen, Norway's second-largest shopping centre owner and manager, in a move that made it the largest listed shopping centre specialist in the Nordics and the third-largest listed mall operator in continental Europe.
The Sektor acquisition has increased Citycon's cashflow and given it access to new tenants, Kokkeel said. But he also sees potential to upgrade the Norwegian portfolio. ‘We see that F&B is undersupplied in Norway. On average, F&B accounts for 6-7% of the total retail offering in our Norwegian shopping centres. That is extremely low. Norwegians rank among the richest people in Europe and they don’t have good access to F&B in their shopping centres!'
Room for improvement
The Norwegian portfolio is generating robust rental growth of around 3.5% on a like-for-like basis, quarter after quarter, Kokkeel said. 'But there's room for further improvement, he added. 'The target is to raise the share of F&B to over 10% in a couple of years. We are now identifying new development opportunities and have found one extension possibility in Bergen and another at Trekanten Senter (pictured) in Oslo.'
Kokkeel sees scope to play the 'Citycon game' and create an integrated multifunctional project with a public library, housing, healthcare facilities and retail. The retail landlord is already creating schemes with this mix at its Iso Omena shopping centre in Espoo near Helsinki and has plans to do the same at its Lippulaiva scheme elsewhere in the area.
'We are aiming to repeat the story. The Trekanten scheme should become the flagship centre in Oslo.'
Non-core properties will be sold off
At the same time, the company will continue to sell off non-core retail properties. It has already sold off centres valued at approximately €350 mln over the past 2.5 years, Kokkeel said. The focus is on centres that combine daily convenience, for example through grocery anchors, with strong urban locations. In addition to that, Citycon is seeking to add another layer that could be described as experience through facilities such as libraries and healthcare services and entertainment.
All in all, it is seeking to spin off another €250 mln in properties in Sweden and Norway in the next five years, Kokkeel said. 'They're not bad properties, they're the best locations in secondary towns. it's just that we don’t see them as our future and we don’t want to be in this market.'
