Sponda acquires Helsinki's Forum complex in €576m share deal

Finnish listed property firm Sponda is acquiring the Forum shopping centre complex in central Helsinki for €576 mln.

The transaction takes the form of Sponda agreeing to acquire all the shares in Ab Mercator, owner of Forum and five other properties in the same block, from Forum Fastighets Kb and Föreningen Konstsamfundet.

Sponda is also taking control of Ab Forum Capita, the manager of the assets. In total, Sponda is paying €576 mln in cash for the shares, reflecting a net yield of 4.9%.

The assets provide 76,918 m2 of space, 48% of which is retail space and 41% is for office use. Storage and other utility space represents the remaining 11%. 'This acquisition is a perfect fit with our current strategy of increasing the share of shopping centres and office properties in our portfolio, while also increasingly focusing our property ownership on the prime area in Helsinki’s central business district,' commented Sponda's president and CEO Kari Inkinen.

Forum
Forum is one of Finland’s largest and busiest shopping centres, with nearly 14 million visitors per year. The shopping centre includes a total of about 140 shops with combined annual sales of €200 mln. The office element is let to a total of 55 tenants with the largest occupiers including Mehiläinen and Hufvudstadsbladet.

The Forum complex generated rents of €36.6 mln in 2015, although it was not in full use. The current occupancy rate of 96.3% corresponds to a total revenue of €37.7 mln for 2016.

Sponda will finance the acquisition with its existing cash funds and a short-term bridge loan of €300 mln. The company plans to arrange a rights offering to maintain its current capital structure and equity ratio following the transaction. Sponda expects that the transaction will be concluded by the end of February 2016.