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Sponda acquires six properties in the Forum block in Helsinki and plans a rights offering

Sponda Plc           
Stock Exchange Release
4 February 2016 at 8:25 a.m.

Sponda acquires six properties in the Forum block in Helsinki and plans a rights offering

Sponda Plc has today signed agreements with Forum Fastighets Kb and Föreningen Konstsamfundet r.f. on the acquisition of the shares in Ab Mercator Oy, which owns six properties in central Helsinki, as well as the shares in Ab Forum Capita Oy, which manages the properties in question. The total debt-free price of the entities being acquired is approximately EUR 576 million, to be paid in cash. The estimated net yield after the first year is approximately 4.9%. The purchase price is conditional on balance sheet adjustments and other standard adjustments made after an acquisition.

With the acquisition, Sponda continues the successful implementation of its strategy by increasing the share of office and shopping centre properties, which are its focus areas, in its property portfolio and focusing even more strongly on prime areas in Helsinki’s central business district.

The acquired properties

The acquisition comprises a total of six prime properties in the Forum block, including the Forum shopping centre and office premises. Of the properties’ total leasable area of 76,918 m2, some 48% is retail premises and 41% office premises, while 11% is storage space and other utility space.

Served by excellent transport connections, the properties are located in a prime area in central Helsinki and they provide attractive premises for both retail and office use. Forum is one of Finland’s largest and busiest shopping centres, with nearly 14 million visitors per year¹. The shopping centre includes a total of about 140 shops with combined annual sales of approximately EUR 200 million¹. The largest shops in the shopping centre include H&M, Gigantti and Stadium. Over EUR 50 million was invested in the shopping centre’s expansion and improvement project carried out in 2012-2015, which involved modernisation of the premises, improvements to energy efficiency and the addition of some 8,000 m2 of retail space. The properties have some 55 office tenants. The largest tenants include Mehiläinen and Hufvudstadsbladet. The majority of the premises have been recently renovated and they meet modern requirements to an excellent degree.

The total revenue of the property was approximately EUR 36.6 in 2015. Due to the expansion and improvement project completed in 2015, the premises were not in full use for the entire year 2015. The current occupancy rate corresponds to a total revenue of approximately EUR 37.7 million in 2016.

The properties being acquired, their leasable areas and their occupancy rates based on square metres are as follows:

¹ Covers the entire Forum shopping centre and includes six retail premises in a property owned by Maalaistentalo Oy, which is not included in the acquisition.

President and CEO Kari Inkinen

“We are very satisfied with this acquisition, which represents an excellent step forward in the implementation of Sponda’s strategy. This acquisition is a perfect fit with our current strategy of increasing the share of shopping centres and office properties in our portfolio, while also increasingly focusing our property ownership on the prime area in Helsinki’s central business district.

The financing of the acquisition

Sponda will finance the acquisition with its existing cash funds and a short-term bridge loan of approximately EUR 300 million. The company plans to arrange a rights offering to maintain its current capital structure and equity ratio following the transaction.

Sponda’s Board of Directors will convene an Extraordinary General Meeting to decide on the planned rights issue. Sponda’s Board of Directors is expected to decide on the size, timing and terms of the rights issue based on the authorisation of the General Meeting. The invitation to the Extraordinary General Meeting to decide on the authorisation of the Board of Directors will be published later today. The conclusion of the acquisition is not contingent on the realisation of the rights issue.

Approval and schedule of the transaction

Sponda expects that the transaction will be concluded by the end of February 2016, once the standard conditions for acquisitions are satisfied.

Sponda Plc
Kari Inkinen

For further information, please contact:
Kari Inkinen, President and CEO, +358 400 402 653
Pia Arrhenius, SVP, Corporate Planning and IR, +358 40 527 4462

Sponda Plc is a property investment company specialising in commercial properties in the largest cities in Finland. Sponda’s business concept is to own, lease and develop retail and office properties and shopping centres into environments that promote the business success of its clients. The fair value of Sponda’s investment properties is approximately EUR 3.2 billion and the leasable area is around 1.2 million m2.