GIC acquires 40% stake in Iso Omena for EUR 132m

The property investment arm of the Government of Singapore Investment Corporation has agreed to purchase a major stake in Iso Omena shopping centre in Helsinki for just under EUR 132 mln.

GIC Real Estate (GIC RE) announced the signing of a partnership agreement with Finnish property company Citycon on Wednesday. Citycon acquired the property in September 2007 for EUR 329 mln. On completion of the partnership deal, Citycon will own 60% of the shopping centre and GIC will own 40%. The parties have agreed that Citycon will continue to be responsible for the business and management of the shopping centre.

Citycon and GIC RE said they intend to be long-term investors in the shopping centre and have agreed to develop and extend the mall. Located in the Helsinki Metropolitan Area, Iso Omena is Finland's fifth largest modern shopping centre. Its total lettable area is 61,300 m2, of which approximately 49,000 m² of retail space. The shopping centre also has planning permission for a further 7,000 m².

'Iso Omena is the largest and best centre in our shopping centre portfolio. With this agreement, we will release capital for the redevelopment of our property portfolio in accordance with our strategy. This business concept may also become part of our strategy and source of capital,' commented Citycon CEO Petri Olkinuora.

Jones Lang LaSalle advised GIC on the transaction.

Jeremy Eddy, director European Retail Capital Markets at Jones Lang LaSalle: 'This acquisition by GIC underlines the continued appetite from institutional investors for dominant shopping centers in Continental Europe; this type of opportunity is rare. The centre offers significant asset management opportunities both in the short and medium term. Citycon is an excellent shopping centre owner and manager who is well placed to extract the inherent value in this centre. The Finnish market, with strong rental and sales growth, a buoyant economy and increasing international retailer demand, continues to remain attractive for real estate investors.'

Earlier in February GIC teamed up with Dutch property giant ING Real Estate to buy the new Roma Est shopping centre near Rome for EUR 400 mln. It was the largest single-asset deal ever in the Italian retail property sector.

* The International Council of Shopping Centres holds its European conference in Amsterdam from 16 to 18 April this year. Click on the link below for more information.