Doughty Hanson sells final Finnish shopping center(2)

British private equity real estate firm Doughty Hanson has sold the Iso Omena shopping center—the last property in its Finnish retail portfolio—to property investment company Citycon for €329m.

London-based Doughty Hanson announced it has sold the Iso Omena shopping center in Finland to retail property investment company Citycon for €329 million ($443 million). Iso Omena is the final property to be sold from the portfolio of eight shopping centers the firm acquired in 2004 from Ilmarinen Mutual Pension Insurance Company.
The 61,000-square-meter shopping center is located in western Helsinki and accommodates more than 120 stores and restaurants.

“The sale of Iso Omena marks another successful example of Doughty Hanson’s strategy of actively managing and improving its Finnish retail portfolio to create significant value for investors,” Nils Styf, who is responsible for Doughty Hanson’s Nordic activities, said in a statement. “Finland remains an attractive market in which we constantly review opportunities.”

Total returns from the Finnish retail portfolio represent a multiple of 7.6 times on the fund’s equity investment and a gross internal rate of return of 100 percent, according to the firm.

Earlier this year, the firm sold three shopping centers, two in Helsinki and one in Oulu, to ING Real Estate Investment Management for €186 million.

Other private equity firms are showing increasing interest in the Finnish property market. In July, The Carlyle Group made its first real estate investment in Finland with the acquisition of four buildings in Helsinki from YLE, the Pension Fund of the Finnish Broadcasting Company. The investment was made through Carlyle Europe Real Estate Partners II.

In the same month, Aberdeen Property Investors, the Sweden-based property division of Aberdeen Asset Management, acquired a €108-million portfolio of five office properties in Tampere and Jyväskylä in Finland via its SICAV Pan-Nordic Fund.

The Iso Omena transaction is not the first Helsinki property investment for Citycon.

“This is a strategic investment in a first-class shopping centre in the affluent western part of the Helsinki metropolitan area, where Citycon already owns several retail properties,” Petri Olkinuora, chief executive officer of Citycon, said in a statement. “The acquisition provides us with a unique opportunity to increase our market share in the growing retail sector of the Helsinki region.”

The transaction is expected to be completed by the end of September.