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Largest single asset transaction ever in Finland

Finnish institutional joint venture led by SRV set to launch construction of EUR 480 million REDI Shopping Centre in Helsinki


helsinki-jllThe REDI Shopping Centre project in the metro quarter of Kalasatama, Helsinki, has been launched by SRV Group Plc. The shopping centre and parking facility is scheduled to open in autumn 2018. SRV is responsible for the design, construction and leasing of the project.

The total value of the shopping centre and parking facility investment is EUR 480 million, of which EUR 240 million will be financed with the owners’ equity investments.  The remainder of the investment will be covered by project credits which have been now agreed.

Partners in the JV developing the shopping centre and parking facility are SRV, Ilmarinen Mutual Pension Insurance Company, LocalTapiola and OP-Pohjola Group and a fund managed by the OP-Pohjola Group.  The equity investment shares of the consortium are divided so that SRV’s share is 40%, Ilmarinen has 30% share, LocalTapiola’s share is 15% and the share of OP-Pohjola Group and a fund managed by the Group is 15%.

In order to construct the shopping centre and parking facility elements of the project a EUR 225 million project credit agreement has been signed with a syndicate of banks.  The syndicate arranging the project loan facilities consists of Pohjola Bank Plc, Nordea Bank Finland Plc and Helaba Landesbank Hessen-Thüringen as the mandated lead arrangers, and Danske Bank Plc and Swedbank AB as other lenders in the syndicate.  In addition, SRV has granted an unsecured project credit of EUR 15 million for construction.

Markus Laine, Director, Real Estate Transactions and Investors SRV Group Plc said: “We are very pleased to launch the REDI project with the most prominent domestic institutional investors backed by the bank consortium formed by the leading Nordic and International banks active in Finland.  The commitment from both investors and banks is a strong testimony to the project and to SRV’s experience of mega projects in inner city locations.  The REDI development is the second mega project for SRV in Helsinki following on the successful completion of Kamppi block including shopping centre in 2006.”

Christian Hohenthal, Head of Capital Markets JLL Finland said:  “We are thrilled to facilitate the largest ever single asset transaction in Finland.  There is strong momentum among both investors and banks’ continuing the record year 2014 and thus, 2015 is set to be a new record year in the Finnish property investment market.  In addition to prime Finnish institutions, there was a strong interest from international investors to join this rare shopping centre joint venture and project development opportunity.  REDI really ticks all the right boxes; Helsinki is one of the fastest growing cities in Western Europe, SRV is a credible and experienced developer and REDI has a prime location.  REDI Shopping Centre will be the heart of the new city district forming an integrated transport hub combining fashion, leisure, strong food offer, public services, residential and hotel all under one roof.”

SRV also plans to build six residential towers as well as office and hotel towers above the shopping centre.  The residential towers will consist of 1,200 housing units, of which most will be directed to the consumer market.  The construction of the first two residential towers is expected to begin in 2016, when the construction phase of the Shopping Centre technically allows this. The first tower is expected to be completed by the end of 2018 and the second tower in 2019, depending on demand.  REDI as whole is expected to be completed during 2022-2024 depending on the market situation. Turnover from the shopping centre, parking facility and towers is expected to be over EUR one billion.

JLL acted as advisor to SRV Group on the transaction and forming of the JV. Krogerus Attorneys Ltd. advised SRV Group on the transaction and the investor consortium in debt financing. Castrén & Snellman Attorneys Ltd. advised the investor consortium and Roschier, Attorneys Ltd. advised the bank consortium.