IPE - April 3, 2009
The Kesko Pension Fund has bought four retail properties for €50m in a sale and leaseback deal with Finnish trading company Kesko Group.
The €400m Finnish pension fund has purchased a total of 26,000 square metres of store space in Finland, including the K-citimarket in Helsinki, K-rauta Lielahti in Tampere, interests in the K-supermarket Nekala and K-citymarket properties in Tampere.
The pension fund currently allocates 40% to real estate and invests mainly in Finnish trading centres.
Velko Savela, the pension fund’s executive vice president, said the real estate portfolio returned around 8% last year but saw very few transactions.
Savela said the fund held off from making new investments in 2008 and sold very few properties, but is currently considering increasing its allocation to real estate slightly.
The latest deal does not involve any changes in the stores’ operations and all properties have been leased back to Kesko’s parent company for a further 10-15 years.
Kesko Group said it gained around €19m from the transaction, once debt had been added, and said the sale was designed to boost the firm’s liquidity and improve its use.
At 31 December 2008, Kesko owned one million square metres of properties and had 2.9 million square metres of properties leased in Finland and neighbouring Nordic countries.
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