German Aareal and OKO Bank to finance Kamppi Centre
The Kamppi Center, in the heart of Helsinki, is SRV Group Plc's largest project. The Center will include a shopping center, offices, residential flats, a parking center and bus terminals. The Center will be completed and opened for use in two stages 2005-2006.
The owner of the shopping centre under construction, Helsingin Kamppi Center Oy, has signed a final financing agreement with Aareal Bank AG and OKO Bank Group Plc. The total amount of financing comes to 200 million euros. Aareal Bank has taken the main responsibility for financing the project with OKO Bank taking on 25%.
At the turn of the year, SRV Viitoset Ltd sold 70% of Helsingin Kamppi Center Oy to Pontos Oy group, which invested the required capital through AS Hotell Viru. SRV Viitoset retained 30% ownership of the Helsingin Kamppi Center.
The published financing arrangement was made possible by the long-term lease of AS Hotell Viru. Its business operations and movables were sold to AS Sokotel last year, when the property was refinanced.
Aareal Bank is a German bank that focuses on property financing. The bank specialises in financing shopping centers, hotels and logistics centers.
"We found the Kamppi Center to be a suitable object of financing for us due to its central location and good business idea. We have had good experiences with projects like this all over Europe. Success with Kamppi can be achieved just by utilising the pedestrian traffic through it. There are only a few projects of this scale in the heart of a capital city underway in Europe. The arrival of a modern shopping center in the middle of the city will transform its structure and alter its 'center of gravity'. SRV has been excellent in carrying out the project and we are very pleased to have been chosen as the financiers for the Kamppi shopping center", says the Head of Aareal Bank AG's Stockholm office Jonas Lindholm.
"OKO has been the main organiser of financing for the Kamppi project from the beginning. The construction work has gone forward in an exemplary manner and we can be pleased with our involvement with the project. The model of financing employed is an important step in revitalising the Finnish property market. It improves the liquidity of property ownership and further enhances the interest of investors towards the business area", states Managing Director Mikael Silvennoinen from OKO.
"So far we have made agreements for leasing premises in the shopping center and simultaneously had negotiations about the final financing of the center and agreed upon the ownership details. Things have gone according to plan and the project is now at a good stage. Towards the end of the financing negotiations, we considered three different options in detail of which Aareal Bank proved to be the best one for us. We can now concentrate on improving the quality of Kamppi with the goal of making it the most attractive shopping center in central Helsinki. SRV Viitoset Ltd will now focus on carrying out the construction work. Responsibility for the development of the shopping center and for leasing the premises will move to the Helsingin Kamppi Center Oy", says the Chairman of the Board of Directors of the SRV Group Plc Ilpo Kokkila.
"Half of the premises in the shopping center have already been leased although the center is still two years from completion. We expect increased demand for the remaining available premises once the building gets its final shape during the summer. The chosen ownership and financing solution helps the implementation of the concept for the shopping center", states Ilpo Kokkila.
The majority owner of Helsingin Kamppi Center Oy, Pontos Oy group, is an affiliate of SRV Group Plc and its major holdings are Hotel Viru and Radisson SAS Hotelli in Tallinn and the two shopping centers, Viru Center and Kamppi Center. The total value of these holdings comes to about 500 million euros.
SRV Group Plc is Finland's fifth largest construction company. It is a notable property developer in its line of business and a leading project management contractor. In 2003 its turnover was over 276 million euros and made a profit of 9.8 million euros before tax.
For more information:
Aareal Bank, Stockholm Office
Tel.+46 8 546 420 10
Tel. +358 9 404 2549