First, I want to say that I am both excited and grateful for this opportunity to serve as the next CEO of Citycon. During my 13 years in the company, I have had the privilege to be part of Citycon's journey to become the leading owner and developer of urban hubs in the Nordics and Baltics. We continue to stay committed to our long-stated necessity-based strategy, focusing on high-quality assets in strong, growing urban markets in the major Nordic cities, and most importantly, creating value for all our stakeholders. At the same time, it is important to acknowledge the changes in our operating environment over the last two years, in particular the high interest rates, which have had a major impact on the real estate sector and also Citycon.
Operational performance in January-March 2024 was strong with like-for-like net rental income increasing by 6.5 % supported by rent indexation and strong performance of our core assets. Like-for-like tenant sales increased 3.0 % as sales development continued strong especially in our main tenant categories. Retail occupancy rate, including Kista Galleria, increased 30 bps compared to same period previous year. There was a decline in the occupancy rate compared to year-end due to the Kista consolidation and normal seasonal variation.
Our EPRA earnings remained stable and was EUR 24.5 million, including some one-time costs and restructuring costs related to organizational changes. Excluding these one-off costs, EPRA earnings grew and amounted to EUR 28.8 million.
In connection with the financial statements 2023 we outlined actions to be taken in 2024 regarding asset disposals and cost savings measures with the main goal of strengthening our balance sheet and cash flow. I would like to highlight our commitment to the investment-grade credit rating, which enables us to access the financing market with competitive terms. We demonstrated this commitment during the first quarter as we executed an approximately EUR 50 million share issuance. This action was necessary to defend our investment grade credit rating, and the best solution for the company and all its shareholders. The share issue also facilitated a very successful EUR 300 million new green bond issuance in February, which significantly improved our debt maturity profile and reduced our refinancing risk.
We have set a divestment target of EUR 950 million over next the 24 months and are confident that we will execute that by the end of 2025. In May, we signed a deal to sell Kongssenteret in Norway with pricing close to our book value. With that transaction, we showcase the attractiveness of our necessity-based centers but also highlight the fact that the transaction market is picking up.
During the first quarter of 2024 we have executed several cost-saving measures. Through organizational changes and consolidation of group functions to our Iso Omena head office we have been able to reduce our headcount costs substantially and are committed to delivering on our overhead run-rate target of less than 10% of NRI by the end of this year.
Years 2024 and 2025 will be years of execution and delivery. I am looking forward to building the company’s future together with a strong team. Our business fundamentals are strong, and together with a focus on the balance sheet, Citycon is and will be well-positioned going forward. We acknowledge that now is the time to execute on our promises, and that is the key priority for me as a new CEO and for the whole management team.
Henrica Ginström
Chief Executive Officer
Source: Citycon's Interim Report Q1/2024