The Finnish Property Market 2012 - KTI

The retail space stock increased in all major cities during
the first decade of 2000s. Both major shopping centres,
as well as hypermarket and supermarket properties have
been developed, both in city centres and in out-of-town
locations. New supply has, however, been well absorbed in
the market.
Players
Retail is the second biggest sector in the KTI Index,
representing some 22% of the database. Retail is typically
well represented in pension fund investment portfolios.
There are also some major players specialising in retail,
Citycon being the biggest in this group. Some international
investors have also concentrated in retail, either in shopping
centres or smaller retail properties. The two major Finnish
retailers, Kesko and S-Group, are also major players in retail
property development and investment.
The Finnish shopping centre market is dominated by
Citycon, who currently owns 23 shopping centres in Finland.
Some Finnish pension institutions own whole, typically
regional, shopping centres in which they typically invest in
quite early phases of the development. For example, Varma
has in recent years invested in new shopping centres in the
cities of Tornio and Hyvinkää. Pension funds also often enter
into joint investments with other investors in bigger centres.
For example, the Sello shopping centre in Espoo is owned
jointly by three pension institutions – Keva, Pension Fennia
and Etera – while the Jumbo shopping centre in Vantaa is
owned by a group consisting of a domestic pension fund,
foreign property company and owner-occupiers.
The Finnish shopping centre market has also attracted
foreign investors, such as Wereldhave, Rodamco-Unibail,
CBRE Global Investors, Cornerstone Real Estate and GIC
Real Estate. Domestic property funds, such as those managed
by Aberdeen and CapMan, have also invested in shopping
centres, concentrating in smaller centres in the Helsinki area
and some larger ones in other cities. Also, Sponda owns some
major shopping centre properties and development schemes.
During 2011, the shopping center supply increased through
the completion of the 33,500 sqm Karisma center in Lahti.
High street shops are typically located in CBD office
buildings, and, as a result, major office investors, such as
Sponda and Ilmarinen, are also significant retail owners.
High street shops typically compete for consumers with
out-of-town shopping centres. In many regional cities, the
attractiveness of city centres has been increased through
facelifts to the space supply, extension of pedestrian areas,
and through an increase in the parking facilities. During the
past few years, several new international retail chains have
entered the Finnish market, attracted by the modern highclass
retail space in prime locations.
Hypermarket and supermarket investments are
traditionally favoured by Finnish institutions due to the
typically long leases and secure cash flow. This sector has
also attracted foreign investors recently. Retail operators,
S-Group and Kesko, in particular, remain major owners
of hypermarket and supermarket buildings. Portfolios of
smaller retail units attracted foreign investors in 2006–2009.
Citycon is also a major player in smaller retail properties,
although it has announced that, in the future, it will
concentrate increasingly on shopping centres.
40
TOP 10 Shopping centres in Finland
Center Retail GLA Main Owners Location
The Finnish Property Market 2012
ITÄKESKUS 115 144 Wereldhave Finland Ltd HELSINKI
SELLO 97 900 KEVA, Etera, Pension Fennia ESPOO
IDEAPARK 91 712 Private investors LEMPÄÄLÄ
JUMBO 85 000 Unibail-Rodamco, Pension Fennia, HOK-Elanto, Kesko Plc VANTAA
ISO OMENA 48 500 Citycon Plc, GIC ESPOO
MYLLY 45 849 Kauppakeskus Mylly Ltd RAISIO
HANSA 36 688 Several owners: institutions, non-profit fund, property companies TURKU
TRIO 34 600 Citycon Plc, Co-operative bank of Päijät-Häme LAHTI
KAMPPI 34 079 Cornerstone Nordic Retail Fund HELSINKI
KARISMA 33 500 Ruokakesko Ltd LAHTI
Source: Finnish Council of Shopping Centres