Good morning, everyone, and welcome to Citycon's Q4 and full year results audiocast. This morning, we published our full year 2021 financial statements, which as usual, you will find in the investor section of our website. My name is Sakari Järvelä, and I am the Vice President for Investor Relations and Corporate Finance at Citycon, and will be hosting the call today. With me here in the call are our CEO, Mr. Scott Ball, and our CFO, Mr. Bret McLeod. We will start the presentation by Scott going through a summary of our business and operational highlights for 2021, and after that, Bret will go through our full year financial result and our financial guidance for 2022. Scott will then conclude our presentation by commenting on Citycon's strategic activities going forward.
After the presentations, there will be a separate Q&A session, so we will be opening the line for questions from the audience. With that, I will pass on to Scott. Please go ahead.
Thanks, Sakari. Good morning, everyone, and greetings from snowy Sweden this morning. As mentioned, we're pleased to present Citycon's Q4 and full year 2021 results. I'll start with some highlights from the quarter, then Bret will review Citycon's financial results for 2021 as well as our guidance for 2022, and then I'll conclude the presentation with an update on our portfolio and capital recycling activities. Citycon continued to demonstrate the strength and stability of its portfolio in the COVID-19 environment in 2021, as our operational results are nearly back to pre-COVID levels. We did not see the dramatic declines during COVID that others in the sector saw, so we therefore use 2019 as our recovery benchmark. A few highlights from the quarter and the year. In Q4, like-for-like net rental income increased 2.9% compared to Q4 2020.
Like-for-like NRI for full year 2021 was off 1.6%, which is encouraging considering the Q1 of 2020 was pre-pandemic. We are very pleased to see that tenant sales exceeded 2020 levels, and in Q4 actually exceeded 2019 levels. This is a direct result of our tenant mix and large share of necessity categories, such as groceries, pharmacies, municipal, and healthcare services, growing an additional 3.8% from last year. Our operating properties recorded a fourth consecutive quarter of valuation uplift, and the total fair value change of investment properties in 2021 amounted to EUR 48.6 million, of which EUR 42.7 million occurred in Q4 alone. We are gaining significant momentum in this category.
This positive development highlights not only the quality of our grocery-anchored urban hubs, but also the improving investor appetite for retail assets in the Nordics and greater Europe, which we'll discuss later. On the operational side, rent collection remained high at 96%, and in prior quarters actually grew to 97%. We continue to exhibit one of the best collection rates in the industry, and I would remind you that we do not adjust for rent relief as some others do. Leasing activity continued to be very strong as we signed over 40,000 sq m of new leases during the quarter and almost 250,000 sq m for the year. This is the most we've ever signed at the company.
In 2021, when we continued our active capital recycling and sold four non-core assets during the year for approximately EUR 250 million, which is above book value. In addition to demonstrating strong private market demand for retail assets, we have also demonstrated our disciplined capital allocation by using parts of the proceeds to repurchase 10 million of our own shares, taking advantage of the large discount of those shares relative to NRV. This action was a strategic move to remove the overhang of shares owned by a large institutional shareholder, and we succeeded in acquiring the majority of those shares. On the financing front, we successfully issued a EUR 350 million green bond in March and decided to partially use the net proceeds to pay back the bond maturing in 2022.
In May, we successfully priced a EUR 350 million hybrid bond, further strengthening our balance sheet. As a result, we end the year with confirmed investment-grade ratings with stable outlook from all three major credit rating agencies and no significant near-term debt maturities until 2024. Given the recent movement in bond spreads, our timing seems to be perfect. This also gives us greater financial flexibility and the ability to pursue our long-term strategic goals of moving further towards owning and developing mixed-use urban hubs. In addition to focusing on portfolio recycling and financing activities, Citycon continued to make progress with organic growth projects on several fronts. 2021 saw us reach major zoning and planning milestones for the remainder of our development pipeline, including major projects at Liljeholmen, Hercules, Myyrmanni, and Trekanten.
Like Lippulaiva, which will be opening this spring, these organic developments utilize our existing building rights will be significant opportunities for growth going forward, which we will discuss later. We have continued to be active after the year-end and have announced important transactions furthering our strategic goals. As disclosed on February seventh, we have an agreement to dispose of two additional non-core assets in Norway early in this year. Again, above the latest IFRS fair value and at an attractive blended cap rate of 5%. We have now sold EUR 400 million in assets in the last 12 months, including assets in all three major countries we operate in. We also announced on February seventh that we have entered into a forward funding agreement to purchase a brand-new residential asset comprising 200 apartments in Stockholm near our Kista and Jakobsberg centers.
The building will be completed in 2024 and will enhance the demand for our existing centers while continuing to diversify our portfolio with a greater share of residential income. We finished our share repurchase program, purchasing another 1.46 million shares in January for a total of 10 million shares owned during November through January. We continued to increase our share of municipal and grocery tenants as our tenant mix, which brings resilience to our portfolio and has positioned us well through the pandemic. Over 35% of our GRI comes from stable necessity tenants. Only 5% of GRI is turnover-based, and I would particularly highlight that 92% of our leases are tied to indexation, providing protection against potential inflation threats. In addition to grocery tenants, municipality and healthcare tenants are a strategic focus for the company. This gives us many benefits.
First, we benefit from the high creditworthiness of our public sector tenants, which improve the certainty of cash flows and further support the resilience of our assets. Secondly, lease periods for public tenants are usually longer, between 10-20 years. Last, public tenants also represent an integral part of our densification strategy as they drive footfall to our locations. Tenant demand for our shopping centers continued to be demonstrated by strong leasing activity as the number of leases increased again from last year. A record amount of 248,000 sq m of new leases were completed during 2021, and at the same time, our average rent rose to 22.6 EUR/sq m from 22 EUR/sq m in 2020.
We are pleased to see that retail occupancy increased 50 basis points in Q4 from the previous quarter and was at 94.2%. I think this might be the most interesting data point given what it signals for future growth. Also, footfall continued to develop very positively during the last quarter of 2021 with an 8% like-for-like increase compared to Q4 2020. Q4 2021 was also a strong quarter for our tenants, with total like-for-like sales up 7.6% compared to Q4 2020. I would point out this is higher than Q4 2019, which was a pre-COVID period. The full year comparison like-for-like tenant sales increased by 3.8% compared to 2020. As an aside, like-for-like grocery sales for the full year 2021 were 13% higher than the full year 2019.
This is the support from our peer group and is a strong demonstration of the benefits of our strategy of owning grocery anchored urban hubs in densely populated growing locations with direct connection to transportation. With that, I'd like to turn it over to Bret.
Thanks, Scott, and good morning, everyone. As Scott has described, it was a strong quarter on many fronts and a solid year versus a tough 2020 comp, given the Q1 of 2020 was effectively pre-pandemic. Probably the most important takeaways from Q4 are that like-for-like NRI was up 2.9% and net fair value increased nearly EUR 43 million, the largest quarterly gain of 2021, and the fourth consecutive increase of net value gains for our operating properties. Both are very promising trends as we look forward into 2022. Looking to slide 10, while total Q4 NRI of EUR 49.3 million was slightly behind Q4 2020, this was mainly a result of the Swedish and Columbus asset sales and somewhat offset by a stronger NOK currency, which helped quarterly NRI by EUR 1 million.
Direct operating profit was further impacted by a one-time increase in direct admin expenses, a result of duplicate positions during the CFO transition. Looking at EPRA Earnings, one-time items in direct current and direct deferred taxes were the most impactful, driving the change in Q4 2021 versus Q4 2020. Direct current taxes increased EUR 1.6 million in Q4 as a result of a timing issue resulting from a tax accrual reversal in Norway in the Q4 of 2020. We also saw EUR 1.5 million change in direct deferred taxes as a result of the Columbus sale, reducing the taxable loss of the parent company. These one-time adjustments to EPRA Earnings were slightly offset by the positive impact of our Q4 share repurchase, which lowered our weighted average share count in the quarter and improved EPRA EPS by EUR 0.003.
In June 2021, we were very pleased with the execution of our EUR 350 million hybrid bond as it solidified our financial position and overall flexibility. However, the new issuance did result in EUR 3.6 million of incremental hybrid interest expense in Q4, which impacted adjusted EPRA earnings and EPS compared to Q4 2020. Looking at our full year results, total NRI in 2021 was lower than 2020 by EUR 1 million, mainly driven by the difficult comp of a pre-pandemic Q1 2020, as well as slightly higher energy expenses throughout the year. Strong FX gains during the year were more than offset by the strategic divestments of Columbus and our Swedish assets early in 2021. Importantly, like-for-like NRI was only off 2020 by about 1.5% and approaching 2019 levels.
A very positive development that we believe sets us apart from our industry peers. Full year EPRA earnings were impacted by many of the items discussed that occurred in the Q4 . In addition to those, 2021 direct other operating income was lower than 2020 as a result of our exit of the managed business in Norway early last year. Other direct items declined by EUR 3.1 million and were primarily a result of a decline in our direct share of results in our Kista JV in 2021 compared to 2020. Again, Kista suffered from comparing to a year with a pre-pandemic Q1 . On the positive side, we were very pleased to see a EUR 1.4 million increase in net fair value at the asset during the quarter as things are clearly beginning to turn around.
On slide 11, we've provided NRI and EPRA earnings bridges to graphically portray the items I've just discussed. Before we leave slide 11, I also want to point out the improvements in EPRA NRV per share we saw in both the quarter and the full year. While we have historically calculated this metric using a weighted average share count as listed in our financial statements, given the significant share repurchase at the end of 2021, we also wanted to highlight the true impact of the combination of net fair value increases and permanent reduction in share count represented by our actual share count. Using our actual share count as of the end of the year, our adjusted EPRA NAV per share stands at EUR 12.15, an increase of nearly 6% over the same metric as of year-end 2020.
As you can see on slide 12, net fair value changes for the quarter and the year increased EUR 42.7 million and EUR 48.6 million respectively. Notably, excluding our development asset Lippulaiva, total net fair value changes for 2021 amounted to nearly EUR 77 million. We received independent appraisals from JLL and CBRE on our assets in the Q4 , and overall, we've observed appraisers turning more positive on retail, particularly the type of necessity-based retail that are at the core of our urban hubs and strategy, as evidenced by the gains our portfolio exhibited throughout the year and in the Q4 . This is being driven both by an improved operating outlook as COVID subsides, and more importantly, by increasing investor appetite for retail properties in the private markets.
We've provided strong support of this point with our asset sales last year and again with our recent announcement of two Norwegian dispositions. As noted on slide 13, we continue to maintain a strong and flexible balance sheet with ample liquidity, which has been enhanced by the pending Norwegian asset sales later this quarter and is over EUR 660 million, including 100% availability under our EUR 500 million credit facility. In addition, we have a well-laddered maturity schedule with no significant maturities prior to 2024. 100% of our assets are unencumbered, and we carry an investment grade rating and stable outlook from all three major rating agencies. Our credit metrics continued to improve in 2021, with IFRS leverage better by 620 basis points to 40.7%, and interest coverage and net debt to EBITDA materially improved.
Post Norway asset sales, these metrics will only strengthen. I would also point out that these levels are inclusive of our successful Reverse ABB share repurchase in Q4, which as Scott mentioned, removed the overhang of a large institutional shareholder. We have already seen the positive impact to stock liquidity since the Reverse ABB, as our average daily volume has increased nearly 60% from 350,000 to over 560,000. On slide 15, we've included our initial guidance for 2022, adjusting for the impact of our recently announced Norwegian asset sales, which impact full year NRI by approximately EUR 8 million. A few items I would like to point out. First, if we had not announced these strategic dispositions, our initial guidance would be reflected in the table on the left of the slide.
The ranges in the left table would have resulted in 2022 guidance midpoints for direct operating profit, EPRA EPS, and adjusted EPRA EPS of EUR 180 million, EUR 0.70, and EUR 0.55 respectively. I would also note that EUR 180 million of direct operating profit would be a 2.3% increase over the same in 2021 and derives from estimated like-for-like NRI improvement that would trail 2019 NRI by less than 2%. To reach our current guidance, we've simply adjusted direct operating profit down by approximately EUR 8 million at both the low and high end of the range for the anticipated lost NRI due to the strategic Norwegian asset sales.
This results in an initial 2022 guidance range for direct operating profit of EUR 164 million-EUR 180 million, EPRA EPS of EUR 0.62-EUR 0.72, and adjusted EPRA EPS of EUR 0.48-EUR 0.58. In addition to accounting for the Norwegian asset sales, we have assumed full year interest expense for the June 2021 hybrid issuance in 2022, as well as reflecting the full year impact of the 10 million shares repurchased late last year and early this year. Our official guidance also assumes that the majority of proceeds from the Norwegian disposition is held in cash, which we believe to be a conservative approach.
We continue to maintain our disciplined approach to capital allocation, and should there be an opportunity to reinvest some or all of those proceeds during the course of the year, that would be accretive to the guidance provided this morning. Finally, the midpoint of our current adjusted EPRA EPS guidance for 2022 is EUR 0.53, which covers the EUR 0.50 annualized amount of the last quarterly equity repayment of EUR 0.125 that we announced in December 2021. Before I turn the call back to Scott, I just wanted to take a moment to say thank you to Eero for his graciousness and support as I have transitioned into the CFO role. I would also like to thank our board and Scott for the trust they've shown in appointing me to this position.
Last, but certainly not least, I would like to thank all of my colleagues for making me feel so welcome at Citycon. I'm excited for the future here and for the opportunity to meet with all of you listening in some capacity very soon. Over to you, Scott.
Thank you, Bret. We hope that all of you will join us on March thirtieth for the opening of the first phase of our flagship development, Lippulaiva. Lippulaiva is a prototype of our strategy in action, an efficient, sustainable net zero emissions project. Phase one includes the necessity-based retail, which is completely integrated into a new metro station and bus terminal. Phase two, which is under construction, will consist of eight residential buildings with 575 apartments, of which we will develop 400 units as rentals and which will be kept on our balance sheet. The retail portion of Lippulaiva is a great example of necessity-based tenant mix, including four grocery store operators, healthcare, community services such as a public library and a preschool, as well as a gym, which combined represent almost 70% of the GLA.
In addition, we will have some fashion and an excellent restaurant offering. We are currently 90% pre-leased and most recently announced a healthcare provider and some other important anchor tenants such as Clas Ohlson. We anticipate the stabilized NRI to be approximately EUR 21 million-EUR 22 million. On the transaction front, the Nordic real estate transaction market has continued to be very active with a great deal of both domestic and foreign capital flooding the space. The Nordic property market set a new groundbreaking record with a transaction volume of more than EUR 72 billion in 2021, which is 67% higher than 2020 and by far the highest volume ever recorded for a single year in the Nordics. For example, the transaction volume in December was EUR 13 billion, the highest volume ever recorded for a single month.
The appetite and pricing for high quality assets continues to be on an attractive level and facilitates selective capital recycling activities in line with our portfolio transformation strategy, which will increase the share of residential premises and decrease the proportion of non-essential retail in the portfolio. As I mentioned earlier, we are continuing our capital recycling activities. In early February, we agreed to sell two non-core assets in Norway. The assets were sold at book value, which highlights once again the strong private transaction market. These sales not only demonstrated strong execution, but also reflect the underlying quality of our portfolio and its attractiveness to institutional investors. We have now sold assets in all three of our major countries in the last 12 months.
Additionally, Citycon entered into a forward funding agreement to purchase a 200-unit residential building in Sweden with a small down payment to be paid this year. This acquisition is near our existing necessity-based assets in the area and is consistent with our strategy of diversifying our income profile by increasing the share of residential in our portfolio. This transaction also highlights Citycon's efficient capital allocation as the proceeds from the two divested assets in Norway will be used to strengthen our investment grade balance sheet and provide the flexibility to pursue strategic investments. This acquisition, along with the residential coming online in Lippulaiva and the construction of Hercules, demonstrates our commitment to this strategy with residential projects now in all three major countries. To summarize, we picked up significant momentum as the year progressed, and the last quarter demonstrates the recovery is picking up steam.
With key metrics now at or above 2019 levels and our 2022 NRI projected to be very near 2022 levels, we are very excited about what's coming this year. I'd like to thank you and hand it back over to you, Sakari Järvelä.
If there are any questions, we'll be happy to take those questions at this time.
Okay, thank you, Scott and Bret for presentations. We're then ready to move on to Q&A, and turn on the audio line. Operator, please go ahead.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press 0 and 1 on your telephone keypad. Please hold until we have the first question. Hello, can you hear me?
Yes, we can.
You can ask your question now.
Hi, this is Pranav Mayidipudi from Barclays. Thank you for the presentation and thank you for taking my question. I had a question around your shareholding in the current situation. I understand the share buyback has now reduced shareholding of an institutional investor, but now your majority shareholder has higher than 50%. I was wondering what your relationship is with Gazit Globe and where you see that going in the future, especially in the context of Gazit Globe taking over Atrium.
Thank you for the question. As you mentioned, the share repurchase did cause Gazit Globe to move over 50% ownership. That did not trigger anything as it relates to mandatory buyback or anything like that, because it was an action taken independent of the shareholder. Our relationship remains unchanged with Gazit. They continue to be very supportive of the strategy that we've embarked upon. We're not aware of any changes in how they are approaching their investment with Citycon. If they have any changes in mind, they haven't shared them with us. We believe that it's basically status quo at this point.
Sure. Thank you.
Yeah.
Thank you. There are no further questions at this time. I hand back to you.
Go ahead.
Thank you everyone today for your time, and we really appreciate it, and we look forward to speaking to you soon and on our next earnings call. Thanks.
Thanks, everybody.