store sites and properties

The store site network is a strategic competitive factor for K Group. It provides opportunities for business operations to develop and sales and customer satisfaction to increase.

Kesko Group’s strategic store sites are properties that are or can be developed into large retail units. They involve important business interests related to the continuity of management, the flexibility of change and the financial value of the premises. In order to protect such interests, Kesko usually prefers to own these properties. In 2016, a total of 64% store sites were classified as strategic.

Standard properties are premises owned by Kesko Group, including large properties, without a significant development need, which can be sold and leased back for the Group's business operations.

Store sites in figures

Capital expenditure on store sites

In 2016, Kesko’s total capital expenditure on store sites was €216.7 (166.7) million. 

In view of our growth, key capital expenditure included:

  • In the grocery trade: increasing and modernising the K-Market network, and expanding the K-Supermarket network
  • In the building and technical trade: the K-Rauta network is modernised in all countries of operation

Capital expenditure is made on properties needed for Kesko's own or supporting business operations.
At the end of 2016, the most significant store sites under construction were:

  • K-Citymarket and the urban centre Easton in Helsinki, and K-Citymarket in Sastamala
  • New K-Supermarkets being built in Tampere and Ilmajoki, and in Niittykumpu, Espoonlahti, as well as Suurpelto in Espoo and Kalasatama and Pasila in Helsinki
  • K-Rauta in Savonlinna and in St. Petersburg, Russia

In the near future, Kesko’s most significant store site project will be the new shopping centre, Easton Helsinki, currently being built in Itäkeskus, Helsinki. The capital expenditure of the first phase is valued at €100 million. Its employment impact is about 250 person-years for a period of two years. The first part of Easton Helsinki will open to customers in autumn 2017. The next part is estimated to be completed in 2019. The capital expenditure on the whole complex is valued at over €200 million.

In 2015–2016, our total capital expenditure in business operations, acquisitions excluded, was €500 million. From 2018 onwards, we estimate the annual capital expenditure to remain below €200 million. The strategic objectives are to achieve growth in the Finnish grocery trade, the building and technical trade and the car trade.

Energy efficient construction and property maintenance

When a new store site or shopping centre is being planned and built, the starting point is sustainable development and energy efficiency. In maintenance and repairs, the starting point is also lowering lifecycle costs.

Store site projects involve major capital expenditure, the implementation of which requires skilled people, a high-quality network of cooperation and common rules. Kesko has long experience and plenty of competence in the implementation of demanding store site projects.

In order to indicate the high level of requirements, an international environmental classification, BREEAM or LEED, to be carried out by an external assessor is applied to the most significant store site projects.

The following store sites have or will have the BREEAM environmental rating:

  • Kesko’s new shopping centre being built in Itäkeskus, Helsinki
  • K-kampus, Kesko’s main office building planned for Kalasatama, Helsinki
  • The new shopping centres, each to include a K-Supermarket, being built in Suurpelto, Espoo and Laajasalo, Helsinki

It is important to keep an eye on developments in the building and energy sector and anticipate its changes. Technology advances rapidly, consequently development requires expertise to identify the right time to reject technology that is becoming obsolete and adopt technological advances and innovation.

Kesko is participating in the 2017–2025 action plan of the commerce sector's Energy Efficiency Agreement. In accordance with the agreement, we commit to reducing our energy consumption by 7.5% through various energy saving measures. All K Group chain stores are included in the agreement.

The measures include:

  • Solutions that decrease the consumption of materials and energy during the lifecycle of the property
  • The lowest lifecycle costs in the trading sector
  • Optimum conditions for customers, employees and products

Retail stores can achieve significant energy savings by adopting these energy efficient solutions:

  • Remote monitoring and building automation
  • Lids and doors on refrigeration equipment
  • Recovery of condensation heat
  • Refrigeration equipment that uses carbon dioxide
  • Adjustable and directional lighting
  • LED lights in neon signs
  • Increased use of LED lighting also inside the store
  • Solar power plants on store rooftops

Kesko's has around 40 real estate managers helping K-stores find ways to make their energy consumption more efficient while also preparing renovation programmes lasting 5 to 6 years.

Read more about store sites and properties:

Annual Report 2016

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