Estonians are buying the Kristiine shopping center from the Finns

Kristiine Keskus shopping mall in Tallinn. Photo: Konstantin Sednev

Eften ABC4 OÜ, a company bringing together several Estonian investors, signed an agreement with the Finnish listed company Citycon Oyj on Tuesday to acquire the Kristiine Keskus shopping mall in Tallinn.

Citycon said in a stock exchange announcement it has signed a binding agreement to divest Kristiine Keskus for a gross purchase price of around 129 million euros, all cash. This divestment is in line with the company's strategy to divest non-core assets and focus on its core, Nordic urban portfolio. The transaction reflects around 9 percent discount to the mall's latest International Financial Reporting Standards (IFRS) book value, it said.

Eften meanwhile informed the stock exchange that Eften United Property Fund is investing 2.5 million euros, representing roughly 9 percent of the assets under the fund's management, in Eften Real Estate Fund 5 aimed at institutional investors for the latter to acquire the Kristiine Keskus mall in Tallinn.

The new owner company of Kristiine Keskus belongs to Ivar Vendelin, Anders Anderson, Taavet Hinrikus, Kristjan Rahu, Priit Koit, Toonart Rääsk, Eften Real Estate Fund 5, Tõnu Uustalu and Viljar Arakas. Eften Real Estate Fund 5 is the largest single investment of Eften United Property Fund, listed on the stock exchange, which means that close to 6,000 Estonian retail investors will become co-owners of the shopping center, Eften said in a press release.

A special asset management company, as a partnership of Eften Capital, Ivar Vendelin and Anders Anderson, will manage the mall. Everyday operations of running the mall will be the responsibility of Eften.

"With Estonian investors, Kristiine Keskus will get a strong owner, for whom it's not just another investment, but as residents of Tallinn we perceive higher responsibility for the development of a vital location in central Tallinn. Kristiine Keskus is a very well-known brand and enjoys high popularity, with six million visitors per year. The acquisition of Kristiine Keskus is one of major transactions in 2024, which confirms that Estonian investors are continuously ready to contribute," said Viljar Arakas, CEO of Eften Capital.

"We can see a market situation where Estonian capital has opportunities and courage to acquire companies of importance for Estonia. Good to see that a group of respected investors was quickly set up and I'm confident that it will not remain our last step. I'm glad that a thought, which popped up early in the summer during a conversation with the good friend Viljar at Niitvälja golf course, has come to successful fruition," said Ivar Vendelin, investor and partner of the new asset management company.

Eften ABC4 OÜ and Citycon Oyj signed a binding agreement, and the transaction is due to be closed before the end of 2024, after proceedings by the Estonian Competition Authority have been completed.

A syndicate consisting of SEB bank and Swedbank finances the transaction. RASK Attorneys-at-Law advises the buyer.

Kristiine Keskus is one of Estonia's best known shopping centers, with 45,300 square meters of gross leasable area on two floors. The mall, opened in 1999, underwent a complete renovation in 2019. Approximately 120 shops, service points and eateries can be found in Kristiine Keskus. The anchor tenants are Prisma, H&M, Sportland, Reserved, Rademar, Apollo, O’Learys, New Yorker and Jysk.