Detached house plot in Kaarelan Kuninkaantammi, plot 33322/5, Pitkäkoskentie 10, area 370 m², building rights 160 k-m², Helsinki

The City of Helsinki leases, by open price competition to the highest accepted bidder, seven (7) detached house plots from the Kuninkaantammi—Pitkäkoski area in the 33rd district (Kaarela). Each plot has its own auction lot where bids are submitted. Bids may be made for each plot.

The city reserves the right to accept or reject bids made in the price competition.

Rent is determined on the basis of the accepted price competition bid with a target yield of 3.5%. Before signing a long-term lease the tenant must obtain authorisation from the lessor to apply for a building permit. The authorisation is valid for up to one 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 may be made after a building permit has been granted at the tenant’s request. If more gross floor area is constructed on the plots than the main use in the zoning plan allows for the plot, an additional purchase price/additional land rent will be charged for the excess in accordance with the terms of the draft deed/lease agreement.

The tenant may purchase the plot within five (5) years from the commencement of the long-term lease provided that a residential building has been erected on the plot to a use-ready state approved by building control, and the obligations under the long-term ground lease have been observed. If the purchase option is not used, the lease term will be approx. 80 years. The rent includes a so-called "tasotarkistus" (level adjustment), meaning the annual rent for the residential premises is adjusted at each level adjustment by using the average of the annual averages of the Greater Helsinki housing price index for the three (3) previous years (old apartments price index, 2020=100) (the adjustment index). For each level adjustment the base index is the Greater Helsinki old apartments price index value for the year preceding the start of the lease. The level-adjusted annual rent is calculated by dividing the adjustment index by the base index 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 above index. If a level adjustment cannot be carried out at a given time due to the absence of the housing price index, the new annual rent for the residential premises will be determined instead by using the average of the consumer price index figures for the year preceding the adjustment (adjustment index), adjusted according to the agreed or the actually implemented, equal or higher amount of residential building right (m²), its market value (EUR/m²) and a 4% yield requirement, and the rent development will be linked to changes in the consumer price index in accordance with the lease terms. The base index in this lease is the index value determined at the start of the lease term.

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 rents under the long-term ground lease if the long-term lease is concluded. Otherwise the reservation fee is non-refundable.

More detailed instructions can be found in the attached Price Competition Brochure.