Helsinki-based Citycon is seeking an international credit rating so that it can become a more active player on European capital markets, CEO Marcel Kokkeel has told PropertyEU.

Helsinki-based Citycon is seeking an international credit rating so that it can become a more active player on European capital markets, CEO Marcel Kokkeel has told PropertyEU.

‘This is something we have wanted for some time and we are now working on it, it’s on the management agenda. We aim to diversify our capital sources, that is a key issue for management of all companies these days. We can’t rely on the traditional sources of the past and need to be more flexible.’

The company will need to raise funds to realise the refurbishments and extensions on its agenda. Earlier this year Citycon partnered with Canada Pension Plan Investment Board (CPPIB) to buy Kista Galleria together - one of the largest shopping centres in Scandinavia for more than €532 mln.

Kokkeel is putting plans for a major extension on the back burner, but sees opportunities for a facelift and upgrading in the near term.

The joint venture marks Citycon’s third with a large international investor. In its home base Finland, Citycon owns the Iso Omena mall in Matinkylä Espoo in a 60-40 partnership with GIC of Singapore. The Helsinki-listed company also has a 50-50 joint venture with Finnish pension fund Ilmarinen for the IsoKristiina shopping centre in the city centre of Lappeenranta near the Russian border. The partners plan to extend the leasable area from 19,800 m2 to 34,000 m2 for a total investment of around €100 mln.

While Citycon is open to new partnerships, Kokkeel does not foresee any new alliances in the short term with sovereign wealth funds or other international investors seeking to obtain a foothold in the Nordics. ‘We already have three partners and we need to invest first in these existing relationships.'

Nor does he envisage any new deals of the likes of Kista Galleria in the near future. ‘Kista is a wonderful asset, but now we need to focus on leveraging its advantages and potential as well as improving the rest of our portfolio.’

Until now, the penetration of international retail brands in the Nordics has been relatively limited, but this is about to change, Kokkeel predicted. ‘The Nordics have really lagged behind other parts of Europe where the penetration of international brands is about 45% higher. But if you look at the spending power of Nordic consumers and the high internet penetration, there is a wealth of opportunities for international retailers with a multichannel approach.’

At 8.5% of total sales, online spending in the Nordics is still limited and one of the lowest figures in Europe. However, internet penetration is very high at over 90%, Kokkeel pointed out. ‘This is one of the highest levels in Europe.’