The Finnish Property Market 2012 - KTI

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The Finnish Property Market 2012
Länsikeskus and the Mylly shopping centre in Raisio. In the
city centre, the redevelopment of the Centrum property
was completed in late 2011 by CapMan Real Estate. Another
ongoing retail redevelopment project in the city centre
is that of Kultatalo, which is part of the Hansa shopping
centre. New retail properties for Gigantti and Rautakesko
are currently being built in Biolaakso, next to Kupittaa area.
The completion of these projects is expected to increase
vacancy rates elsewhere in the region. A major extension
is planned for the region’s biggest shopping centre, Mylly,
located in Raisio.
Oulu: the northernmost growth centre of
Finland
Location: 600 km north of Helsinki
Population: Oulu: 144,000
Oulu region in total: 230,000
The Oulu region, consisting of the City of Oulu and 10
surrounding municipalities, has been one of the fastest
growing areas in Finland since the mid-1990s. Oulu is a
university, science and technology city, the influence of
which covers all of northern Finland – about one-half of the
area of the entire country. The region’s economic structure
emphasises services. Engineering and information technology
services, in particular, are regarded as specialities of the
region. The share of industrial production is lower than in
the whole country, with manufacturing of electrotechnical
goods being the main industrial sector.
Oulu’s real estate market is large enough to attract
domestic pension funds, whose position in the market
has remained quite strong. Listed property company
Technopolis, originally founded in Oulu, is an important
player in the office market.
No major transactions were recorded in the Oulu
region during 2011. The most important developmend
project completed in 2011 was the extension of the Zeppelin
shopping centre, which made it northern Finland’s biggest
shopping centre with total leasable area of ca. 30,000 sqm.
Currently, new development is limited to a few ongoing
industrial property projects.
The most important real estate market outside the
central area is the Linnanmaa area north of the city centre,
which accommodates several high-tech companies and Oulu
University. Technopolis is the biggest single private-sector
owner in the area. The quality of the stock in the area is
dispersed, which affects rental levels.
The office vacancy rate has remained very low for the
last several years, but has recently increased slightly.
Jyväskylä
Location: 270 km north of Helsinki,
in the centre of Finland
Population: Jyväskylä: 132,000
Jyväskylä region in total: 142,000
Jyväskylä is a dynamic university town that has a strong
emphasis on both traditional industries and new technology.
The Jyväskylä region’s most prominent industry areas cover
metal and machinery industries, as well as graphical industry.
Two-thirds of the region’s 68,600 jobs are, however, in
services. Jyväskylä’s location is favourable, because it is
in the junction of several important national main road
connections. Traffic connections in the area are planned
to be developed through a bypass road, which would ease
traffic through the city centre.
The city centre is the most important office market
area in the region, where, however, no new stock has been
developed recently. Other office areas with modern supply
include Tourula, where old industrial properties have been
redeveloped into office use, as well as Mattilanniemi/
Ylästönniemi and Lutakko areas with more modern supply.
In Lutakko, Technopolis is currently developing a new 5,000
sqm office property.
In the retail property market, Jyväskylä city centre is an
important regional centre. The major players include local
retailers as well as some national investors. The retail supply
has increased significantly during the past few years. In 2011,
the second phase of the Palokankeskus centre was completed,
adding thus supply by another 20,000 sqm. Currently, a
redevelopment of the Kauppakatu 32 property is underway
in the city centre. In addition, several major projects are
planned, but wait for improvement in the market. In the
logistics / industrial markets, a new project was completed in
early 2012 for Millog in Lievestuore near Jyväskylä.
In 2011, no major transactions were reported in
Jyväskylä.
The vacancy rate of offices still stands at a very low level
in Jyväskylä. In prime properties, rental levels are close to
the Turku and Tampere levels. Rents have remained stable. In
the retail market, the vacancy rate remains very low, and the
rents are expected to continue increasing slightly, although
the outlook has changed slightly more negative during 2011.
Despite active new development, the pedestrian shopping
district’s market position remains strong, and that is where
the highest retail rents are still found.