The Finnish Property Market 2012 - KTI

In some cases, the rental agreement is for net rent, but the
landlord takes care of the management and maintenance of
the building, the costs of which are then recharged separately
from the tenant. This kind of agreement is sometimes called
a “shared rent”. This kind of agreements are becoming more
popular as the basic form of “green leases”, as they attempt to
share the benefits and risks of, among other things, energy
cost fairly between the tenant and the landlord, as well as
to motivate both parties towards energy savings. Otherwise,
“green” terms of rental contracts are being developed actively
currently, but not very widely applied yet.
Rents can be indexed freely in all indefinite leases and in
fixed period leases where the term exceeds three years. The
Consumer Price Index is the most commonly used index.
“Green leases are not
widely applied yet”
Turnover-based rents are becoming more common in
shopping centres, and they usually consist of a minimum
base rent supplemented by an agreed share of turnover.
However, the turnover-based part of the rent is typically
quite low, as the landlord wants to secure a stable base for
their cash-flow.
In market downturns and over-supply situations, various
means to attract tenants can be applied. This has been clearly
seen, for instance, in the Helsinki metropolitan area office
markets in recent years. Besides a decrease in rent levels, the
use of rent-free periods, stepped rent increases and tenant
improvements, among other things, are applied.
plans. Detailed local plans are used to regulate the building
and formation of the physical townscape. In addition, every
local authority has its own building ordinance, the content of
which is defined according to local needs.
In the current act, local authorities have extensive powers
to make independent decisions in land-use planning matters.
It is also possible to agree on joint master plans between
municipalities forming a homogenous urban area. These
joint master plans require the approval of the Ministry of
the Environment. Together with the increased co-operation
and integration of the municipalities, these kinds of plans are
becoming more common.
The Land Use and Building Act oblige municipalities
to adopt an open and interactive approach to planning. The
local planning process is aimed at facilitating the involvement
of all those concerned in planning: landowners, residents and
businesses in the area.
Building permits are approved by municipalities. A
building permit may be granted if the plan allows the type
and size of building that is being applied for. Special permits
to exceed or change the use of the planned space can also be
granted, although these are becoming increasingly difficult
to obtain.
Planning and building permit practices have recently
been discussed actively, and they have been criticised
for their lack of holistic approach to sustainability and
urban structure issues, among other things. Municipalities
compete with each other by using planning and land-use
issues to attract taxpayers – both companies and residents –
and employers, which can sometimes impact their planning
decisions.
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The Finnish Property Market 2012
3.3 Planning
Land use in Finland is regulated by the Land Use and Building
Act. The system has three levels of land-use plans, including
a regional land-use plan, local master plan and detailed
local plans. Regulations and guidelines that complement the
legislation in the Land Use and Building Act are included in
The National Building Code. More detailed regulations and
controls on land use and construction are included in the
Land Use and Building Decree.
National principles for land-use and regional structure
are defined by the Council of State. These national principles
of land use are reflected in the regional plans, which embrace
structural, functional and environmental considerations.
Regional plans are drawn up and approved by Regional
Councils, and confirmed by the Ministry of the Environment.
The local master plan is an instrument for guiding and coordinating
land use at a general level. It is produced by local
authorities, but needs to follow the guidelines of the regional
“New legislation
controls the location of
large retail units”
Photo: Skanska / Pauliina Munukka