Q & A
Why was the company founded? Why could Senate Properties not manage this as a public utility?
In spring 2018, it was decided in the Government budget framework talks that non-strategic state- and state company-owned land fit for housing development or business would be centralised under Senate Properties, and a subsidiary was founded for this purpose. Following the decision in the budget framework talks and the related decision taken by the Finnish Government in autumn 2018, Senate Properties founded a subsidiary, Senate Station Properties Ltd, under which the development of railway station areas in 22 locations would be centralised.
Until now, the ownership of properties has been divided between Senate Properties, Finland’s national railway operator – VR – and the Finnish Transport Agency. Centralised ownership and responsibility will bring clarity and flexibility to the development work. Senate Station Properties Ltd will manage the development of these areas in close cooperation with towns and municipalities.
Senate Properties could have managed this as a public utility; however, the subsidiary model makes operations more flexible. For example, Senate Station Properties Ltd can establish a local subsidiary or joint-ownership company that the town or other operators can join.
Who is responsible for the company’s operations? Will some employees from Senate Properties, the Finnish Transport Agency or VR be transferred to the new company?
Senate Station Properties Ltd is a subsidiary of Senate Properties, and Senate Properties is responsible for the company’s operations. Employees from Senate Properties, the Finnish Transport Agency and VR will not be transferred to the new company. The company will be led and managed by the Senate Properties organisation.
The company’s Board includes representatives of the Finnish Ministry of the Environment, Ministry of Transport and Communications, Prime Minister’s Office and Senate Properties.
How and on what grounds were the properties transferred to the chosen company?
As preparations were made to launch the company in 2018, a review was conducted of all Finnish station areas that needed development or where development work had not been completed. Many station areas had already been developed to some extent before Senate Station Properties Ltd was founded. Senate Properties was involved in the development of the Keski-Pasila station areas, which may be the largest station area development project in Finland. This project is already in the selling stage. The project has been moved forward successfully with a long-term approach in good cooperation with the City of Helsinki.
How is the company financed? Is the development work financed by the state?
In the start-up stage, the company is primarily financed by Senate Properties. However, the company operates under business principles and will eventually finance its operations through the sales revenue it receives from the developed properties.
How soon will the company start its first development projects?
Development work has started in some locations and some have already made great progress. For example, preparations for the Oulu station area development project together with the City of Oulu have been ongoing for some time now. Other examples of ongoing development projects include Kirkkonummi, Kauklahti in Espoo, Riihimäki and Seinäjoki.
The existing development projects will continue without interruptions while new projects are launched once the common targets and project timetables have been determined together with each town or municipality. Preparatory work and planning must be executed with care so that the long-term development of each area is considered.
What will happen to the tenants? Who will be the lessor?
The changes will not affect the existing rental agreements, terms of the agreements or the use of the premises of state-owned properties located in the station areas. The lessor and its contact details may change. In the relevant locations, the lessor will be either Senate Station Properties Ltd or a local estate agent. Possible changes in contact details will be communicated to all relevant parties.
We will also inform the parties well in advance of any further changes and new business opportunities possibly arising as a result of property development. The development of station areas will create new opportunities for local businesses as well as for those carrying out and investing in the projects.
What happens to the properties after the development projects have been completed?
The company primarily uses town planning as a means to develop station areas and to facilitate the diverse use of these areas for housing, business and transportation purposes. The aim is to sell the developed properties.
The company may also choose to continue to own properties after development if this is considered necessary by the town or other parties to the project.
The company may, of its own volition, also take part in further property development in cooperation with the towns through separate local companies.
Will all properties transferred to the company be sold in the near future? What happens when they have all been sold?
Property development is a long-term effort. Preparations, town planning and development take a considerably long time. This can all add up to years or even decades of work.
At this point, it would be premature to speculate what will happen when all of the company’s properties have been sold.
Where will the sales revenue go?
The use of the revenue incurred by Senate Station Properties Ltd will be decided at the annual general meeting. The revenue can be used to finance the company’s operations, while some of the revenue will also go to the Finnish state through Senate Properties.