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Doughty Hanson Sells Three Shopping Centres In Finland
09/05/2007

Doughty Hanson Sells Three Shopping Centres In Finland

Doughty Hanson & Co Real Estate, one of the largest and most successful European real estate fund managers, has sold three more properties from its Finnish retail portfolio. The shopping centres, two in Helsinki and one in Oulu, have been sold to ING Real Estate Investment Management for €186 million.

The properties form a high-quality retail portfolio:

Kluuvi shopping centre - an 18,000 sq m city-centre shopping centre, anchored by fashion retailer Halonen, in the central business district of Helsinki;

Megahertsi shopping centre – a 6,800 sq m retail centre in one of Helsinki's fastest-growing residential suburbs; and

Stockmann department store – a 22,400 sq m shopping centre in the northern town of Oulu for one of Finland's best-known and largest retailers.

Highlights are as follows:

Total returns from the total Finnish retail portfolio to date represent a multiple of 3.3 times on the Fund's equity investment and a gross IRR of 55%;

Seven properties have now been sold, with Iso Omena, a 61,000 sq m shopping centre in western Helsinki, the one remaining asset. Iso Omena is currently being marketed for sale;

Doughty Hanson & Co Real Estate Fund I acquired the portfolio of eight Finnish shopping centres in 2004 from Ilmarinen Mutual Pension Insurance Company which, at the time, was the largest ever cross-border real estate transaction in Finland;

The Fund sold four properties from the portfolio in 2005/2006 and completed a refinancing of the remaining portfolio in October 2006.

In the past three years, Doughty Hanson & Co Real Estate has implemented an active management and value enhancement programme at the properties including consolidating the ownership at the shopping centre in Oulu, implementing a leasing programme at Kluuvi and Megahertsi and preparing for the redevelopment of Kluuvi.

Nils Styf, responsible for the Nordic activities of Doughty Hanson & Co Real Estate, said: “Our acquisition of the Finnish retail portfolio has been a great success and we continue to view Finland as an attractive market. ING Real Estate is a long-term institutional investor and we are confident it will continue to develop these three shopping centres positively.”

Doughty Hanson & Co Real Estate was advised on the sale by Jones Lang LaSalle.

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