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HELSINKI, FINLAND-In a deal that will complete the divestment of eight Finnish shopping centers acquired jointly in 2004, European real estate fund manager Doughty Hanson & Co. has agreed to trade a 650,000-sf mall in the city’s western district. Iso Omena, or “Big Apple,” is being purchased by Citycon Oyj for $450 million.

“The sale of Iso Omena marks another successful example of Doughty Hanson’s strategy of actively managing and improving its Finnish portfolio to create significant value for investors,” says Nils Styf, director of Nordic activities for the UK-based firm. Doughty Hanson pursued a value-enhancement platform at Iso Omena that has created another 75,000 sf of retail, increased rental income for the 115 stores and filled 85,000 sf of office space in the three-story, mixed-use complex. Iso Omena also sports 85 upscale apartments. Opened in 2001 in the Helsinki suburb of Espoo, the center attracts an estimated nine million people annually.

The retail properties acquired for the Doughty Hanson Real Estate Fund I will yield a multiple of 7.6 times on the equity investment, company officials estimate, providing a gross IRR of 100%. Secured from Ilmarinen Mutual Pension Insurance Co. of Finland, the portfolio was cut in half in 2006 via one sale, while three more malls were purchased earlier this year by ING Real Estate Investment Management for $250 million.

Citycon has now completed four transactions with Doughty Hanson, two in Finland and two in Sweden. “We are confident that, as the new owners, (Citycon) will continue to develop and improve the Iso Omena center,” says Styf, adding that Finland “remains an attractive market in which we constantly review opportunities.” The country is among several in the Nordic region the Doughty Hanson European Real Estate Fund II is eyeing. Armed with commitments of $800 million, the recently closed Fund II is also chasing CRE in France, Germany, Italy, Spain and the UK, and has already made seven commitments accounting for 42% of the fund’s equity.

Five of the Fund II deals have closed, including a portfolio of six office buildings in Stockholm’s Kista submarket. Doughty Hanson’s funds have made a total of 26 investments in eight countries, having secured 140 million sf and a portfolio valued at more than $5.4 billion.

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