Only two days after announcing the purchase of 12.6% of Finnish income-producing real estate company Citycom (HEX: CTI1S), Gazit-Globe (TASE: GLOB) today announced it had acquired 12.8% more of the company for NIS 147 million.
Gazit-Globe’s 25.4% stake, purchase for a total of NIS 281 million, makes it the largest shareholder in Citycom. The Finnish company focuses on commercial real estate in Finland. Its holdings include 150 properties with an aggregate value of €722 million (NIS 4.1 billion). Citycom has a market cap of €190 million (NIS 1.1 billion), corresponding to the value at which Gazit-Globe invested in it.
Citycon mainly owns Finnish commercial centers anchored by supermarkets, as well as individual stores. The company had a profit of €14.3 million in 2003 on over €20million in funds from operations (FFO). Citycon is a taxpaying limited company, not a real estate investment trust (REIT) with a special tax status like Gazit-Globe's most prominent subsidiary, Equity One (NYSE: EQY).
Citycon is Gazit-Globe's first investment in Europe, and is in line with last week's announcement. After accumulating properties worth $3 billion in the US and Canada, Gazit-Globe decided to expand into Europe, and will invest over NIS 2 billion (over $400 million) in European shopping centers. The company recently opened on office in London to coordinate its European activity.
Published by Globes [online] - www.globes.co.il - on March 4, 2004