Kesko looks into setting up a real estate investment trust

KESKO CORPORATION STOCK EXCHANGE RELEASE 29.11.2013 AT 09.00 1(1)

Kesko is looking into selling some of the store sites it owns to a trust to be set up with Kesko as one of its significant investors. Kesko Group would continue its operations in the store sites under long-term leases signed in connection with their sales to the trust.

Kesko's objective is to set up a trust of mainly Kesko-owned store sites and shopping centres in Finland, Sweden and Russia with a maximum fair value of approximately €750 - 950 million. The trust is planned also to be made available to private investors. Listing of units is also being assessed.

The possible trust is expected to be launched in the course of 2014.

The sale of store sites to the trust is estimated to generate a significant non-recurring gain, the amount of which depends on the properties sold and return requirements applied to them. These will be specified at a later stage in the assessment.

Launching the real estate investment trust depends in addition to investor interest on whether it is possible for Kesko to achieve such terms and conditions in the arrangement that are economically justifiable for it, taking the Group's strong financial position into account. Moreover, starting a real estate investment trust is subject to the authorisation of the Financial Supervisory Authority.

As at 30 September 2013, the carrying amount of real estate owned by Kesko was €1.4 billion and the nominal value of lease commitments was €2.4 billion. The total area of store sites owned and leased by Kesko was approximately 4.1 million square metres. For the next five years, Kesko's capital expenditure in store sites will total approximately €1.0 - 1.5 billion, with an emphasis in Russia in particular.

Further information is available from Arja Talma, Senior Vice President, Store Sites and Investments, tel. +358 105 322 205 and Jarkko Karjalainen, Investment Director, tel.+358 105 322 694.

Kesko Corporation

Merja Haverinen
Vice President, Corporate Communications

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