Stockmann sells its Helsinki flagship store property to Keva

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Stockmann sells its Helsinki flagship store property to Keva

Finnish retail giant Stockmann on Monday agreed on the sale of its department store property in Helsinki city centre to the pension provider Keva, said Stockmann in a press release.

Stockmann, however, will continue its department store operations in the entire building under a long lease-back agreement to be made with the new owner.

The value of the transaction is EUR 400 million, of which about EUR 391 million will be paid in connection with the transaction.

The remaining part will be taken into account in the rent during the next few years. The net yield is about 4.2 per cent.

The sale is subject to customary closing conditions and Stockmann expects the sale to be completed by the end of April 2022 at the latest.

Stockmann will use the proceeds from the sale of the property to fully repay both the secured restructuring debts of EUR 342.6 million and the undisputed unsecured restructuring debts of EUR 21.8 million that are currently subject to the corporate restructuring payment programme.

The company also has unsecured restructuring debt that remains conditional, maximum amount or disputed, in respect of which the amount subject to the payment programme will be confirmed later.

“We are pleased that we have found a stable and reliable domestic owner for the property. The department store building in Helsinki city centre is iconic and has an excellent location, which facilitated the sale of the property”, said Jari Latvanen, CEO of Stockmann.

”Stockmann’s property is a unique and high-quality entity, where we see an investment opportunity with stable returns and development opportunities. The valuable property in a central location is a good addition to Keva's growing real estate portfolio. It is in line with Keva's investment strategy to make long-term investments in objects that maintain their value and offer a stable return”, said Jaakko Kiander, CEO of Keva.

The department store in Helsinki city centre is designed by the architect Sigurd Frosterus and has a total leasable area of about 51 500 square meters. The building was completed in 1930 and has after that been enlarged to its entirety.

Keva is a public sector pension provider and Finland’s largest employment pension institution with a total of 1.3 million private customers.

The value of Keva’s investment assets at the end of 2021 was approximately EUR 67 billion.


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