Kista Galleria Shopping Center in Stockholm Sells for $700 Million
- Dec 21, 2012
Stockholm, Sweden—Citycon Oyj, a subsidiary of Gazit-Globe Group, and the Canada Pension Plan Investment Board (CPPIB) have entered into definitive agreements to acquire the Kista Galleria shopping center in Stockholm from DNB Livsforsikring ASA. The value of the property amounts to approximately $700 million (SEK 4.6 billion). The shopping center will be owned by a joint venture controlled 50 percent by Citycon and 50 percent by CPPIB. The transaction is expected to close in January 2013.
Located in the heart of one of Europe’s growth hot spots, Kista Galleria has an annual footfall of approximately 18.1 million visitors (the highest in Stockholm) and annual sales of $360 million (third highest in Stockholm).
The shopping center offers access to 185 shops and restaurants as well as cinemas, bowling, indoor go-cart and other leisure activities. Overall, the facility features approximately 970,000 square feet of gross leasable area (GLA), including 650,000 square feet of retail space. The remaining 330,000 square feet comprise a hotel, student housing, healthcare premises and municipal services.
Kista Galleria will be Citycon’s largest shopping center by GLA. For CPPIB, it is the first direct property investment in the Nordics.
“The strength of Kista Galleria is its location and traffic connections, which generate a steady footfall of more than 50,000 daily visitors. Kista Galleria is located at the epicenter of one of the fastest growing areas of Stockholm, with thousands of new residential units being built within the next few years and steady growth of the office stock. Kista Galleria’s robust footfall, driven by its strong local catchment area and infrastructure, is natural and sustainable,” Marcel Kokkeel, Citycon Oyj’s CEO, says.
Kista is the largest office sub-market outside the Stockholm city center, hosting a large number of telecoms, Internet and IT companies. It is also home to more than 125,000 residents. Furthermore, the Kista Galleria Shopping Center is served by excellent transport connections both in terms of public transportation (metro station, commuter train and local buses) and access from major highways.
“As part of its strategy and sustainability model, Citycon invests in shopping centers located in city centers or in other vibrant urban environments. Sweden is a rapidly urbanizing society. While the population in the total catchment area currently stands at about 345,000, it is forecast to grow substantially in the coming years. In addition, it is estimated that in the next 15 years, the population of Stockholm will increase by half a million people,” Kokkeel adds.
“The acquisition of Kista Galleria marks a major milestone in Gazit-Globe’s business development in Europe,” says Chaim Katzman, chairman of Gazit-Globe Group. “The acquisition fits in well with the Group’s strategy of continuing to expand through the purchase of successful, yield-producing assets and contributing to their betterment by applying the global expertise and experience gained from holding more than 600 supermarket-anchored shopping centers in the United States, Canada, Europe and Brazil.”
Graeme Eadie, senior vice president, Real Estate Investments, CPPIB says, “We are very pleased to be making our first real estate investment in the Nordics together with Citycon, a recognized leader in this fast-growing market. We look forward to partnering with Citycon on future investment opportunities in the region as we continue to expand CPPIB’s retail portfolio in Europe.”