Sektor takeover fills big gap in Citycon’s Nordic platform

Citycon’s €1.5 bn takeover of Norwegian shopping centre specialist Sektor Gruppen fills a major gap in the Helsinki-based company’s Nordic platform.

‘Before the acquisition we had no business in Norway,’ Citycon’s CEO Marcel Kokkeel told PropertyEU in an interview. ‘The acquisition makes us a truly pan-Nordic player and the largest in the Nordics.’

On Monday Citycon announced it has acquired Oslo-based Sektor Gruppen for €1.5 bn. The deal - by far the largest property transaction in the Nordics so far this year and the largest property transaction in Norway ever – will lift Citycon’s gross asset value (GAV) by nearly 50%, from €3.4 bn to € 4.9 bn, the company said in a press release.

Following the completion of the acquisition, Citycon will have leading market positions in Finland, Sweden, Norway and Estonia, as well as an established foothold in Denmark. Finland remains the biggest market, accounting for 35% of the total, followed by Norway with 31% and Sweden with 25%. The Baltics account for 7% while Denmark makes up the remainder – or 2%.

Kokkeel pointed out that the Nordic region as a whole comprises 25 million consumers. ‘International retailers often analyse the Nordics as one market and now we can offer them a complete Nordic platform,’ he said. ‘Citycon and Sektor share the same asset strategy of shopping centres located in the heart of communities, in urban crosspoints, and catering to customers’ everyday needs.’

According to Kokkeel, size matters in retail because it makes the property portfolio more attractive for tenants and provides economies of scale for procurement, operations and digital innovation. ‘A larger portfolio provides a firm foundation for best-practice sharing, specialty leasing, cross-country tenanting and digital marketing initiatives,’ he added.

The bulk of Sektor’s portfolio is located in the Oslo, Bergen and Stavanger regions and matches Citycon’s focus on assets in urban and fast-growing Nordic cities. The shopping centres are supermarket -anchored and fulfil Citycon’s asset selection criteria with regard to proximity to public transportation and services to ensure consistent footfall.

Sektor’s shopping centres attract more than 60 million visitors a year. Major tenants include Norway’s biggest grocery chain NorgesGruppen and clothing company Varner Gruppen, whose brands include Dressmann, Bik Bok and Cubus among others. The Sektor portfolio has an occupancy rate of approximately 97%.

‘In recent years, we have been focusing on optimising our revenues, our portfolio and the flexibility of our funding structure and, now we are ready for a strategic step by enlarging our operating platform,’ Kokkeel said.