Detached house plot in Kaarela Kuninkaantammi, plot 33412/3, Pitkäkoskentie 5, area 379 m², building right 160 m² (gross floor area), Helsinki

The City of Helsinki will lease, by open tender to the bidder whose price offer is accepted as the highest, seven (7) detached house plots in the Pitkäkoski area of Kuninkaantammi, district 33 (Kaarela). Each plot has its own auction listing where bids are submitted. Bids may be placed 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 offer using a 3.5% target yield. Before signing the long-term lease the tenant must obtain authorisation from the landlord to apply for a building permit. The authorisation is valid for up to 1 year and a fee equivalent to two months’ rent is charged for that period. The authorisation is decided as part of the long-term lease. A long-term lease decision may be made after the building permit has been granted at the tenant’s request. If more floor area than the plan’s main use for the plot is built, additional purchase price/additional land rent will be charged for the excess in accordance with the draft deed/land lease draft terms.

The tenant has the option to buy the plot within five (5) years from the start date of the long-term lease provided that a residential building has been completed to an occupancy-ready standard approved by the building control authority 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, which means that the annual rent for the residential area is adjusted at each level adjustment by the arithmetic mean of the annual averages of the Helsinki metropolitan area housing price index (price index for older apartments 2020=100) for the three (3) years preceding the adjustment (adjustment index). In each level adjustment the base index point used is the index point for the year preceding the start of the lease. The level‑adjusted annual residential rent is calculated by dividing the adjustment index by the base index and multiplying the annual rent by the result. Thereafter the rent is adjusted every 10 or 20 years at the tenant’s choice based on the above index. If the level adjustment cannot be performed due to the absence of the housing price index at the time of adjustment, the new annual residential rent will be determined using, instead of the level‑adjusted initial annual rent, 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) stated in the lease or the higher realised amount, its market value (euros/m²) and a 4% yield requirement, and the rent development will be tied to changes in the consumer price index in accordance with the lease terms. The base index is the base index specified at the start of the lease.

A reservation fee of €5,000 must be paid according to the invoice before the short‑term lease decision for applying for the building permit. The reservation fee will be credited against rents under the long‑term ground lease if the long‑term lease proceeds. Otherwise the reservation fee is not refunded.

Detailed instructions can be found in the attached Price Competition Brochure.