Citycon sells Finnish university campus project at 10% premium

Helsinki-listed Citycon has entered into an agreement to sell the new campus of the Satakunta University of Applied Sciences (SAMK) that is currently under construction in Pori, on the west coast of Finland, to the Swedish property company Hemsö.

Citycon, the sole owner and developer of the Porin Asema-aukio project, said ownership of the property will be transferred to Hemsö when construction is completed around May 2017. The sales price for the property of €57 mln reflects an over 10% premium to the asset’s latest IFRS fair value (including remaining construction costs).

This divestment is in line with Citycon’s strategy to focus on urban, grocery-anchored shopping centres in the Nordics and Baltics and to divest its non-core portfolio of smaller retail assets, non-core shopping centres and non-retail properties.

Citycon was selected as the developer of the campus project in early 2014 in a tendering process organised by the City of Pori, and the construction started in early 2015.

As part of the project, the company will partly demolish the old office and retail building located on the plot to replace them with six new buildings that will house the SAMK education premises. In total, Citycon will develop a total of 14,000 m2 of new leasable space while a further 9,000 m2 will be totally redeveloped.

SAMK is to lease 19,200 m2 of the 23,000 m2 asset under a 20-year agreement. In addition to SAMK, the current K-supermarket will remain as tenant, making the project fully pre-let.

'This development project involved changing the existing use of the Asema-aukio square from a predominantly retail property with large vacancies to fully let educational premises. Thus, the long-term ownership of the property is not within the scope of Citycon’s core strategy. Hemsö, on the other hand, specializes in owning and managing properties of this type,' said Nils Styf, Chief Investment Officer at Citycon.