The Finnish Property Market 2012 - KTI

52
The Finnish Property Market 2012
Ruskeasuo – Pasila – Vallila – Sörnäinen
– Kalasatama
Other traditional office areas situated somewhat out of the
city centre include Pasila, Sörnäinen and Vallila. These areas
are characterised by a multifaceted office supply. There
are significant differences in rental levels between the new
and old property stock in these areas. As these areas are
typically considered as secondary locations – compared to
CBD and Ruoholahti – they have also suffered more from
the economic downturn, and the amount of vacant space has
increased during the past years. The older stock in the areas
does not meet the requirements of the demanding tenants,
and renting might thus require rent adjustments or tenant
improvements.
“Helsinki develops
new residential
and commercial
property areas in
Pasila, Jätkäsaari and
Kalasatama”
The development has recently been most active in Pasila /
Ilmala area, where Fennia Group’s Visio Business Park’s two
first phases have now been completed. Also, Sponda and YLE
Pension Foundation are planning to develop a major business
park concept in the area, although they had to postpone the
construction start due to the negative market conditions.
Another major project in Pasila includes the development of
the surroundings of the railway station, where the Finnish
state and City of Helsinki are the main players. The total
land area is 8.2 hectares, which will accommodate retail,
office and residential properties. In total, the investment is
estimated to amount to ca. €600 million. The project is now
in the planning phase, and construction is estimated to be
started in 2015.
Next to Pasila is the developing Ruskeasuo office area
with mostly modern space supply. Skanska started the first
two phases of the so-called Manskun Rasti in the area in 2010.
This is a major office development project in Ruskeasuo,
which will, when completed, comprise four office buildings.
Skanska is also going to move its own head office in the
complex in early 2012. Also, NCC is constructing a new
business park property in Ruskeasuo.
Another developing area in the vicinity of the city
centre is Kalasatama, adjacent to Sörnäinen, where the
land was released when the harbour moved its operations
to Vuosaari. The first new office building in the area was
completed in early 2010, with several others being planned.
At the moment, construction work in the area concentrates
on residential projects. In the centre of the area, a complex
consisting of six residential buildings, a shopping centre and
a hotel / office tower is being planned. The project requires
substantial rearrangements in traffic connections during
2012. The actual construction work of the centre is estimated
to be completed in phases between 2015 and 2021.
Pitäjänmäki
Pitäjänmäki, situated seven kilometres north of the city
centre, is an old industrial area that has been converted into
mainly office use in 1990–2000s, comprising both multitenant
office buildings, some head office type properties as
well as some modern business parks. Pitäjänmäki is one of the
areas in Helsinki that has suffered from fluctuating demand,
which has caused volatility in rents and vacancies. Because of
the heterogeneous space supply, rental levels vary markedly
between the different areas in Pitäjänmäki. In older buildings
in particular, investors have been forced to attract tenants by
relatively low rents, whereas the modern buildings closer to
the railway station have retained their attractiveness. Rents
continue decreasing in the area In the KTI rental database,
€11 per sqm was the median rent in new agreements in autumn
2011. The amount of vacant space remains high. Low rental
levels and scarce demand do not allow significant investments
in premises. All ongoing construction projects in the area
are residential buidligns. Also, some old office / industrial
properties are being converted into residential use.
“Amount of vacant
space remains high in
Pitäjänmäki”
Eastern Helsinki
East of the central city area is Arabianranta area, which, in
the past, was the origin of industrial production in Helsinki.
This area has also been developing rapidly recently. The
area currently accommodates ca. 10,000 residents, 5,000
jobs and 6,000 students. The area also accommodates
shopping centre Arabia, as well as and office and retail centre
Arabiakeskus, which have both been developed into old
industrial buildings. Portaali Business Park represents more
modern office supply in the area. Residential construction
has been active in the area in recent years.
Herttoniemi is an area five kilometres east of the CBD,
adjacent to both the eastern radial route and the metro line.
Herttoniemi is an old warehousing area that has gradually
transformed into a more diversified area with office and retail
supply. High office vacancy rates have characterised the
area recently, although the absolute amount of vacant space
is not significant. In late 2011, a new industrial / warehouse