Tuesday, September 30, 2008

Kesko Completes EUR 44 Million Sale Leaseback of 23 Stores in Finland

Kesko Web Site - September 30, 2008

The Kesko Group, the Kesko Pension Fund and Valluga-Sijoitus Oy have today sold 23 of their store properties in different parts of Finland to Aberdeen Property Fund Finland 1 Ky. The selling price is about 56 million euros, of which the Kesko Group's share is about 44 million euros. The Kesko Group's gain on the sale is about 16 million euros, which will be treated as a non-recurring item in Kesko's third quarter operating profit.

All of the above premises have been leased back for use by Kesko's division parent companies mainly under 5 or 10-year leases with extension options. The total lease liability for the properties sold by the Kesko Group is approximately 27 million euros (a 6.2% initial yield) and is not classified as a finance lease.

Of all the 23 properties included in the sale 20 are used by K-food store chains, and two by the K-rauta and Rautia chains. The sale also includes Kesko's Northern Finland district centre property in Oulu. The sale will not change the stores' operations. The total area of the properties sold is about 50,000 m2, of which the Kesko Group's share is about 35,000 m2

The aim of the property disposal is to enhance the use of the Kesko Group capital. The proceeds from the sale will be used to strengthen the store network in Finland and abroad,

At 31 December 2007, Kesko owned 1.0 million m2 of properties and had 2.6 million m2 of properties on leasehold in Finland and other Nordic countries, the Baltic countries and Russia. Kesko's store site investments were 189 million euros in 2007. Sphere: Related Content

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