Kristianstad is approximately one hour’s drive north-east of Malmö and is the regional capital of a catchment of 300,000 people which does not currently have an out-of-town shopping centre. The newly acquired retail zone is on the E22 motorway and will include a 31,600 sqm shopping centre housing approximately 90 shops and restaurants. A 6,500 sqm hypermarket is being built opposite the shopping centre, with a further 2,500 sqm of complementary retail units alongside it. The Company has also conditionally committed to acquire a 20,500 sqm retail park on the site. The necessary planning consents have been received for all units.

The net acquisition yield for the shopping centre and the hypermarket is 6 percent and will generate a total purchase cost of around SEK 1.325 billion (EUR 134M), depending on the level of net rental income achieved. The net acquisition yield for the retail park will be 6.5%, if acquired, which will generate an additional cost of around SEK 350 million (EUR 35M). Ground works have begun and the hypermarket is expected to open by the end of 2017, with the shopping centre opening approximately one year later.

Peter Mills, Eurocommercial’s Director responsible for Sweden said, “The Swedish team, under the leadership of Martin Bjöörn, has developed considerable construction and leasing expertise in major extensions of our shopping centres over the years. The Kristianstad acquisition allows us to utilise this experience to acquire properties at an earlier stage, thus achieving much higher yields than simply buying existing assets in a highly competitive market.”

The seller is a group of private investors lead by the brothers Paul and Per Frankenius.