Finnish-based developer Citycon is looking to densify its centres and optimise its retail portfolio as the company continues to establish a new platform for future growth, according to CEO Scott Ball.
In an exclusive interview, Ball set out his vision for the reshaped Citycon portfolio.
The American joined the company in January of this year as head of a largely new management team and has spent much of 2019 realigning the business with a pan-Nordic outlook – rather than country-specific management – optimising assets, renegotiating its debt and divesting non-core properties to enhance its loan to value rate.
Having largely achieved his objectives, Ball said that the company is now seeking to densify its shopping centres, with the initial focus on residential. It is currently determining the most effective way to do this and is likely to trial different models, including selling residential rights, running its own developments and entering into joint ventures.
“The first part of our transformation was really to try and squeeze everything we could out of our current assets,” he said. “The malls have been very stable, with occupancy rates remaining very high over the past years. So the next stage is not to replace the retail with other uses but to add to the retail.”
Ball said that Citycon is focusing on top two cities within each Nordic country and assets in the most densely populated areas of those cities. While the company is open to adding any sort of appropriate real estate use, interest from residential developers in the Citycon sites has led the company to prioritise these opportunities.
“We really favour centres with great transport links, such as a metro station, because that drives footfall and is also ideal for residential,” said Ball. “Furthermore, our centres tend to be anchored by two or even three grocery stores and fashion only stands at about 25% of GLA, with more focus on retail services. So these mixes are very complementary to residents.”
The initiatives are part of a five-year plan which Ball hopes will see the company change its market perception from a shopping centre developer to a mixed use operator.
