Unibail-Rodamco launches €600m project

European listed property giant Unibail-Rodamco has unveiled plans for its largest development project in Europe, the Mall of Scandinavia.

The Euronext-listed firm said it started construction during spring 2012 of the 101,000 m2 shopping centre, which will involve a development cost of around €600 mln.

With 250 stores, Mall of Scandinavia will be the largest shopping centre in Scandinavia, Europe's wealthiest region, Lars-Åke Tollemark, director of Operations Nordic at Unibail-Rodamco told PropertyEU. ‘The reason why Unibail-Rodamco is investing in Stockholm is that it is one of the fastest growing capital cities, with a 22% population increase forecast over the period between 2010- 2030.

'In addition to this, retail sales are expected to grow by €7 bn by 2025 in Stockholm, and in GDP terms, the average in Sweden is 23% higher than in the rest of Europe.'

Mall of Scandinavia is part of Arenastaden (Arena City), a major development project representing a total investment of €2.5 bn. The area is located a few minutes from the city centre and has excellent communication links.

Unusually, the shopping centre is one of the final pieces of the project to be built. The Friends Arena opened last year, the hotel part will open this October and the infrastructure development is already in place. Fabege owns the office element of the complex. This element is not built yet but the surrounding new built offices are occupied.

Tollemark said leasing activity has already begun with the 10,000-m2 Cinema complex - the largest in the Nordics - already signed with 15 screens and a guaranteed 8 world premiers per year. ‘We want it to be a 'living' mall, full of entertainment.’

Unibail-Rodamco, which has a €7 bn development pipeline in Europe, said the opening of the scheme is planned for the fall of 2015. The mall will have a catchment area of 2.3 million people within a 60-minute drive. The company is financing the development with existing credit lines and bond issues which have lowered the cost of debt to 3.4% in the past months.

Unibail-Rodamco owns roughly €29 bn of assets across Europe and currently has a loan to value of 37%.