Nordicum - Real Estate Annual Finland 2012 | Page 65

lion. From the looks of things, the return to
a normal transaction volume won’t happen
for a while now.
Also property financing is harder to
come by nowadays. Catella predicts that
once the banks move towards the even stricter Basel III regulations, which tighten the
banks’ return requirements, more strain is
put on the price and availability of future
property financing. Especially banks dependent on wholesale funding will have to
strain lending in the future.
It is nevertheless unlikely that property
financing will totally freeze, says Ahonen.
“Good properties will continue to receive bank financing if they meet a certain
criteria.” This means that the foundation of
the property must be solid, loan-to-valueratio moderate and the plans of the owner plausible.

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Leverage Still Possible
The interest level is likely to remain at the
low level of recent years with the new economic threats forcing the hand of the European Central Bank – as a consequence, the
interest rates are dropping.
“This will keep the yield spread between properties and interests more or less
unchanged, which makes it possible to use
loan leverage efficiently also in the future
in cases where new financing is achieved,”
Tuomas Ahonen comments.
According to Catella, because of the
low interest rate, it is also conceivable that
potential problem loans, which have been
a much talked about subject in the property market for quite a while, will remain unresolved. This may happen, if the banks do
not see a justified cause or are not pushed
to realise their losses in the current non-liquid market situation, but instead extend the
loan maturities and wait for the situation to
be cured by itself in time.

Töölönlahti Leads
the Way
In Helsinki, it is noteworthy that there is a
constant short supply of retail space to be let
in the city centre. Furthermore, retail space
is more recession-resilient than office space,
as there are fewer alternative locations for
retail. Uncertain conditions also highlight
coming years, the Helsinki city centre will
also witness a relocation of office users involving tens of thousands of square metres,
once the Töölönlahti office area will be completed.
In December, it was announced that
UPM will build a new head office to Töölönlahti area in the Helsinki city centre. The
company has applied for building permit
from the City of Helsinki. UPM views the
business cycle to be favourable for the company, and has agreed with the constructor,

nordea.com

YIT Corporation, that construction work
will commence in early 2012.
Previously in the same neighbourhood, Etera won the competitive tendering
organised by Senaatti-kiinteistöt for the area’s third office quarter. The construction
of the area is well under way with the support of Lemminkäinen, which is in charge
of building and letting. The three quarters
have a total of 45,000 m2 of permitted building volume.
With the emerging new construction,
the Helsinki city centre will gain a substantial amount of new, modern office space that
is lacking in the neighbourhood. The main
user of the first building that will be completed by the end of 2012 is Alma Media.
KPMG will be the main user of the second
building, and the user of the third building
has not yet been revealed.

Keilaniemi: Finishing Touches
Another interesting milieu by the water is
Keilaniemi in Espoo which is known as the
“home shore” for Finnish corporate giants
such as Nokia, Kone and Fortum. The high
profile office neighbourhood is nearing its
completion with the newest construction projects: Keilaranta 1 and Swing Plus are already
under way, and negotiations with potential tenants to Keilaranta Tower are well in progress.

When these projects are finished,
Keilaniemi will measure approximately
250,000 m2. Spurred on by the introduction
of the metroline, also residential construction looks to be in the cards for Keilaniemi
in the near future.
Tuomas Ahonen notes that despite
economic turmoil, big infrastructure projects such as the metro have the ability to
generate good things for their surrounding
communities.
“The metro stations will benefit from
a significant wave of development over the
coming years,” Ahonen says, noting that the
stimulating effect of the metro is already
being felt.
In the future, the boundaries of Espoo
power triangle Tapiola-Otaniemi-Keilaniemi will blur even further as these three
areas will become easily accessible by the
metro.
An interesting new factor in the equation is the “innovation university” Aalto: due
to the concentration of the Aalto University in the hi-tech hub Otaniemi, new projects are under way in the area. For example, the Nokia Research Center will move
from Ruoholahti to the new Open Innovation
House office building in Otaniemi. Among
others, also the European Institute of Innovation and Technology (EIT) will settle into the same property.
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