The Finnish Property Market 2009 - KTI

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Preferred office locations in Helsinki Metropolitan Area % Northern down-town of Helsinki Helsinki CBD Western Helsinki Northern Helsinki Tapiola area Western radial route district Airport area Ruoholahti Eastern Vantaa Leppävaara area Northern Espoo Other Eastern Helsinki Ring road II area Other parts of Helsinki Peninsula Western Vantaa 0 2 4 6 8 10 12 14 16 18 % Source: Future Workplace barometer survey; KTI and Skanska 46 The Finnish Property Market 2009 retail supply. New projects in the area include the Opus Business Park, the third phase of which was completed in 2008. The office vacancy rate has increased recently in the area, although the amount of vacant space measured by floor area is not as significant because of the relatively small office stock. New projects in the area are waiting for increasing demand. Further east is Itäkeskus (which is roughly translated as the ‘eastern city centre’), located at the junction of Ring Road I and the eastern radial route. The Itäkeskus shopping mall, owned by Wereldhave, is one of the largest shopping centres in northern Europe with a leasable area of 112,000 square metres. In the immediate vicinity of the shopping centre, a new 14,000 square metre hypermarket building for S-Group is about to be completed in early 2009. Espoo – a city with multifaceted areas Espoo is a city with several regional property market areas. Submarkets around the western radial route include Keilaniemi, Otaniemi, Tapiola, Niittykumpu and Matinkylä, which are expected to get a boost from a west-bound metro line to be completed by 2013. Further along the Ring Road I is a developing area called Leppävaara. West of Tapiola, a new Suurpelto area is currently being developed, with a vision of housing some 7,000 residents and numerous companies. The areas of Keilaniemi, Tapiola, Otaniemi and southern Leppävaara create an increasingly important converging office market area in Espoo. The Keilaniemi area houses several major headquarters – including Nokia, KONE, Fortum and Neste. Several new business park projects have been completed in recent years, including the High Tech Center and Swing Life Center. In the best premises, the rents are close to the levels of Ruoholahti. However, due to the increased supply, there is also a lot of vacant space in the Otaniemi-Keilaniemi area. The vacancy rate has increased dramatically due to the completion of the new projects. “Supply of office space has increased rapidly in Keilaniemi” The Helsinki University of Technology is situated in Otaniemi, located in the immediate neighbourhood of Keilaniemi. The area will also host the new Aalto University, which will be created in 2010 by combining the Helsinki University of Technology, Helsinki School of Economics and the University of Art and Design. The offices in Otaniemi mainly have technology companies as tenants. New office space is being developed through the construction of the Falcon Business Park, where the second phase was completed in 2008. In Leppävaara, office supply has increased through the completions of the 20,000 square metre Panorama Tower and the first phase of Polaris Business Park in 2008. The amount of vacant space has also increased. The Sello Shopping centre was extended in 2008 by the completion of the cinema and new retail premises. The traditional centre of Tapiola is undergoing a major facelift. The development plans include significant amount of new retail space and major underground parking facilities. The Tapiola Group is also currently developing a major new head office building with leasable area of 33,000 square meters. In addition to the centre of Tapiola, retail space in Espoo is concentrated in the Iso Omena (Big Apple) shopping centre close to the western radial route as well as in the Leppävaara area, where the Sello shopping centre is located. Another retail area is Espoo Centrum, where the Espoontori shopping centre and train and bus terminal are being extended. A new 16,500 square metre shopping and service centre Entresse was completed in late 2008.
The heterogeneity of the Espoo commercial property stock can be seen in the development of rents and vacancies in the various sub-markets. According to Catella, the vacancy rate for offices in Espoo has exceeded 14%, representing the highest figure among all Finnish growth centres. Vacant office space can be found in Keilaniemi, Leppävaara and Kilo areas especially. Retail space is fully occupied. Vantaa: development continues in the airport area The Aviapolis area around the Helsinki-Vantaa Airport has developed rapidly during the past few years. The main players in the area include the City of Vantaa, Finavia, main property developers as well as property companies Sponda, Technopolis and Julius Tallberg Kiinteistöt. The area currently hosts some 35,000 jobs. There are also extensive property development plans with some 400,000 square metres of office space alone being planned. During 2008, some 26,000 square metres of new office space was completed, and some new space will also come to the market during 2009. Traffic connections to the airport will be improved through the development of the Ring Rail Road, scheduled to be operational in 2014, thus linking the airport area with the city centre. Also the Ring Road III is planned to be upgraded in order to find solutions to the increased traffic to and from the Vuosaari Harbour. At the airport itself, a new international terminal will be in 2009. The 85,000 square metre Jumbo shopping centre is the major retail centre in the area. In the immediate neighbourhood, the new Flamingo leisure centre comprising hotel, office and leisure premises was completed in late 2008. In the vicinity of Aviapolis, Pakkala and Tammisto areas are also important retail areas, favoured by big-box retail units, such as outlets for motor vehicles, furniture, gardening and the like. There are also some new development projects that also attract investors. “The Flamingo leisure centre was completed in 2008” Because of the modern supply, the rents in the Airport area are relatively high, and have been increasing steadily. The area has attracted tenants, and there is not much vacant space supply. With the exception of the airport area, Tikkurila is the main office area in Vantaa and the location for most of the city’s administration buildings. Because of Vantaa’s diversified office stock, rental levels are dispersed. Highest office rents can be found in the modern buildings at the airport area. Total returns by region 1998-2008 % 16 14 12 10 8 6 Helsinki Metropolitan Area All property Rest of Finland Other Major Cities* 4 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 *including cities of Turku, Tampere, Oulu, Lahti, Kuopio and Jyväskylä 47 The Finnish Property Market 2009 Source: KTI
Page 1: The Finnish Property Market 2009 1
Page 5: Contents Preface 7 1. Basic facts a
Page 8 and 9: 1. Basic facts about Finland 2. The
Page 10 and 11: subordinated loans or state guarant
Page 12 and 13: Key Figures - Finnish Economy 2001
Page 14 and 15: 14 The Finnish Property Market 2009
Page 16 and 17: The indefinite leases often last lo
Page 22 and 23: Real estate investments’ proporti
Page 26 and 27: The Finnish fund managers concentra
Page 32 and 33: 5. Property sectors - market struct
Page 34 and 35: The office market in 2009 The deman
Page 36 and 37: Prime office yields in Finnish citi
Page 38 and 39: Rental practices Rental practices i
Page 42 and 43: 5.4 Logistics market - a developing
Page 44 and 45: The Helsinki Central Business Distr
Page 48 and 49: 6.2 Other growth centres: Tampere,
Page 50 and 51: Throughout the recent years, the va
Page 54 and 55: Key terminology Property Kiinteist
Page 56: 56 The Finnish Property Market 2009

The Finnish Property Market 2009 - KTI

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