Hotel conversion in Helsinki CBD

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About the case

Talonrakennusteollisuus (TRT) is a joint interest organization of house building contractors. The approximately 450 members of the organization include the largest construction companies in Finland and numerous small and average-sized house building contractors nationwide.

Challenge

The premises and building technology systems of the former headquarter of TRT at Unioninkatu were outdated and the building was nearing the end of its life cycle. TRT needed new premises for its operations and a plan for the old headquarter that would be vacated.

We at Newsec were a familiar advisor for TRT from previous projects and were able to provide TRT with a full service offer which included tenant representation services as well as an offer to organize the sales process for the property. Based on the positive experiences from previous projects, TRT chose Newsec as a commercial advisor to organize the sales process.

Solution

From the beginning it was clear that the highest purchase price would be achieved by selling the property as a development opportunity. We met with the city representatives to discuss about the development potential of the building and prepared initial plans for different development options. The initial development plans, including feasibility studies of different use scenarios and floor plans, were presented in the sales material distributed to investors. The building was introduced to investors as an excellent and rare development opportunity in the Helsinki CBD.

The investor demand for the property was extremely high and a number of indicative bids were received. We were able to increase the indicative bids notably by organizing a second round auction for the investors. As a result, the property was sold to Barings Real Estate Advisers in July 2017. The sales price was €16.3 million translating to €3,800/sqm. TRT moved to new premises at the end of 2017 and Barings is currently converting the former headquarter property into a new 120 room business class hotel.

RESULTS and Quick facts

The investor demand for the property was extremely high and a number of indicative bids were received. We were able to increase the indicative bids notably by organizing a second round auction for the investors. As a result, the property was sold to Barings Real Estate Advisers in July 2017. The sales price was €16.3 million translating to €3,800/sqm. TRT moved to new premises at the end of 2017 and Barings is currently converting the former headquarter property into a new 120 room business class hotel.

Summary: The sales of the former HQ of TRT
Location: Unioninkatu, Helsinki CBD
Customer: Talonrakennusteollisuus ry (TRT)
Status: The property was sold in July 2017
Services: Capital Markets

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