RE Finland

Core Competence

Oulu is revitalizing downtown with plans to add 10,000 residents and 5,000 jobs over the next 20 years

artikkelikuva: Core Competence

Oulu, known as the powerhouse of the North, is ready to take growth to another level entirely. Heralded as the “Capital of the Northern Scandinavia,” Oulu features the best demographic structure in the Nordic countries, offering a solid mix of young and old.

We have the healthiest demographic structure in the Nordics, with the population growing by 2,000 – 3,000 residents every year,” says Director Juha Ala-Mursula from the economic development company BusinessOulu.

To accelerate future growth, Oulu is active on multiple fronts, boosting the prerequisites for success of companies and citizens alike. A key objective is making the Oulu city center more dynamic under the City Center 2040 vision: already, the downtown area is being thoroughly revitalized, with both office and residential development hitting the city center in a big way.

“The local hi-tech companies are going strong and the demand is certainly there for business premises – and certainly the same goes for the residential side,” Ala-Mursula says, adding that various hybrid solutions will be utilized in the downtown area more and more.

“By 2040, we want to introduce 10,000 new residents and 5,000 new jobs into the city center,” he lays out the game plan.

Wanted: Dynamic Downtown

One crucial concern is the reinvention of the railway station quarter, since its excellent location in the city core provides plenty of opportunities for redevelopment. The main land owners, Senate and VR Group, are working with the City of Oulu to create a modern, exciting travel hub.

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Photo: L Arkkitehdit Oy

“We expect big things from the railway station quarter,” Ala-Mursula says.

Oulu is also exploring its vertical reach: city’s highest tower hotel is under construction right by the market square. Reaching over 60 meters, the building goes by the name Terwa Tower and it could be open for business, conceivably, by 2023.

“Tower construction is a good fit for the downtown area, adding diversity to the city center,” Ala-Mursula comments, pointing out that hotels are in high demand as hotel occupancy rate in the city is around 75%.

Business Campus Excellence

Workspace provider Technopolis has a long history with Oulu, launching its first business campus in 1982. To kick off 2020, Technopolis will add another building to the entity, as the Sepänkatu 20 business campus will get going. The campus will feature about 8,400 m2 of leasable space.

“We are practically fully booked now and waiting for the construction to be completed in early 2020, so that the first companies can start moving in in April,” explains Director Marko Lind from Technopolis.

Sepänkatu 20 consists of five floors above ground and two below; all premises are easily modified according to companies’ needs. The business campus will boast an impressive lobby, lounge and restaurant. There will be conference rooms beside the lobby and a unique setup of smaller offices.

Make It a Double

According to Lind, the first business campus, Ydinkeskusta (City Center), has been such a great commercial success that Technopolis has been planning to “double the fun” for quite some time now.

“In downtown Oulu, there is high demand for modern, flexible office space,” Lind says, adding that the retooling of the city center has shaken things up a bit – in a good way.

“The City of Oulu has a clear vision about downtown and the means to see it through,” Lind says, clearly pleased with the dynamic, ‘can-do’ attitude.

According to Lind, Sepänkatu 20 is a great choice for companies looking for modern and space-efficient office premises. For instance, ventilation, lighting, telecommunication solutions and acoustics are of the highest standard, and space utilization efficiency is top-notch as well.

Companies today also appreciate a great location, he adds. “Technopolis Oulu is located right in the heart of Oulu city center. Campus is easy to access by train, bus or car.” The railway station, for instance, is only a ten-minute walk away.

Retail Renaissance

A major move was made in downtown Oulu in the summer, as Trevian real estate fund purchased the majority of the shopping block Pekuri, formerly known as the Stockmann building. Located in the very heart of the city by the Rotuaari pedestrian boulevard, the block features as much as 17,000 square meters of leasable space.

Commercial Director Tea Siivola from Trevian says that the property in question was highly attractive in the eyes of the real estate fund.

“Pekuri is the number one spot in town, featuring a lot of opportunities for development,” she says.

The “battle plan” has already been drawn out: the first floor is to feature stores, the second floor will house entertainment and a food garden and the top floors (3–5) will be reserved for offices.

“Pekuri can accommodate about 1,000 office workers,” Siivola says.

Major Appeal

The beauty treatment of the venerable old property, dating back to 1947, will not come cheap: Siivola talks about Trevian investing tens of millions of euros into the make-over.

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“We want to open up the block and make it more accessible and enjoyable to the citizens,” she says, adding that the service offering will get a serious upgrade, too. A lot of international retail chains, for instance, are interested to hear about the new direction of Pekuri and are now seriously considering Oulu for operations, perhaps for the first time.

“We’ve had a lot of very good negotiations and expecting new chains for tenants.”

More Opportunities to Come?

Trevian was active in the local real estate market also in the spring, as it purchased the Pauketie 2 property (6,210 sqm) which houses a car dealership. Siivola says that this year’s two purchases reflect the fact the Oulu is an exciting, dynamic city in the eyes of the real estate fund.

“We’re sure to be active again, as a suitable opportunity presents itself,” she says. In fact, Siivola says she has been “positively surprised” by Oulu’s high-level appeal of late:

“Talking with prospective tenants, it is clear that they have been quite impressed with Oulu’s recent development.”

Juha Ala-Mursula points out that Oulu has some “extra edge” in the field of real estate, too: the city boasts a series of Prop Tech companies who use hi-tech to boost the performance of buildings.

“Use of sensors and IoT is opening new possibilities in real estate, for instance, in lighting or safety solutions,” Ala-Mursula comments.

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Oulu – Fast Facts

– over 200,000 residents (250,000 in Oulu Region)
– growth in purchasing power during last 10 years among Finland’s strongest
– renewed university campus of 23,000 students kicks off in 2020
– average age of residents in Oulu Region youngest in Finland

– largest investment projects in coming years:
- Nallikari holiday resort +100 Meur
- Station center and areena +450 Meur
- Terwa Tower – seaside hotel +100 Meur
- Future Hospital 2030 projects +1,500 Meur

– office vacancy rate at the city centre 4,3 % (Q2/2019)
– retail vacancy rate at the city centre 5,8 % (Q2/2019)

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