Detached house plot in Kaarelan Kuninkaantammi, plot 33322/6, Pitkäkoskenkuja 4, area 434 m², building rights 160 m², Helsinki

The City of Helsinki leases, by open price competition, seven (7) detached house plots in the Pitkäkosken area of Kuninkaantammi in district 33 (Kaarela) to the bidder whose price offer is accepted as the highest. Each plot is a separate auction lot where offers are made. Offers may be submitted for each plot.

The city has the right to accept or reject offers made in the price competition.

The rent is determined on the basis of the accepted price competition offer with a 3.5% yield target. Before signing the long-term lease the tenant must obtain an authorisation from the landlord to apply for a building permit. The authorisation is valid for up to 1 year and a two-month rent is charged for that period. The authorisation is decided in connection with the long-term lease. A long-term lease decision can be made after the building permit has been granted at the tenant’s request. If more floor area is built on the plots than the main use specified in the zoning plan allows, an additional purchase price/additional land rent will be charged for the excess in accordance with the terms of the draft deed/draft ground lease.

The tenant has the option to purchase the plot within five (5) years from the start date of the long-term lease provided that a residential building has been completed and approved for use by building control and the obligations under the long-term ground lease have been complied with. If the purchase option is not exercised, the lease term is approximately 80 years. The rent includes a so-called level adjustment, meaning that the annual rent for the residential area is adjusted at each level adjustment by the average of the three (3) most recent annual averages of the Greater Helsinki housing price index for existing apartments (price index for existing apartment flats 2020=100) (adjustment index). For each level adjustment, the base index value used is the annual figure of the housing price index for existing apartments for the year preceding the start of the lease. The level-adjusted annual rent is calculated by dividing the adjustment index figure by the base index figure and multiplying the annual rent by the resulting factor. Thereafter the rent is adjusted every 10 or 20 years at the tenant’s choice compared with the same index. If a level adjustment cannot be carried out because the housing price index is unavailable at the time of adjustment, the new annual rent for the residential area will instead be determined using the average of the consumer price index figures for the year preceding the adjustment (adjustment index), adjusted according to the amount of residential building right (m²) implemented (as stated in the lease or higher), the market value per m² (EUR/m²) and a 4% yield requirement, and rent development will be tied to changes in the consumer price index as set out in the lease. The base index is the base index specified at the start of the lease.

A reservation fee of EUR 5,000 must be paid by invoice before the short-term lease decision for applying for a building permit. The reservation fee will be credited against the rents of the long-term ground lease if the long-term lease is implemented. Otherwise the reservation fee is non-refundable.

More detailed instructions are provided in the attached Price Competition Brochure.