Töölö Hospital

Capital Markets

BACKGROUND

The Hospital District of Helsinki and Uusimaa (HUS) develops a new Siltasairaala Hospital to Meilahti hospital area. The construction of Siltasairaala takes place during 2018-2022 and the new hospital will be brought into use in 2023. When completed, it will replace the iconic Töölö Hospital located in downtown Helsinki.

CHALLENGE

With the construction of the new Siltasairaala Hospital, the old Töölö Hospital will be left unused. HUS wanted to divest the hospital area and secure its operation in the premises until the end of 2022 by signing a lease agreement with the new owner.

HUS had already applied for a city plan alteration, where the hospital plot had mainly been designated to residential use. The city plan draft enables demolition of the newer wing of the hospital and construction of residential buildings to its place, whereas the old listed part of the hospital needs to be developed to commercial or service use.

HUS tendered a commercial advisor to execute the sales process of the hospital and to provide necessary commercial services related to the real estate transaction. In a public tendering, Newsec was selected as the commercial advisor. In particular, our strong experience in large-scale real estate arrangements, extensive public sector references and excellent price quality ratio of the service contributed to the selection.

SOLUTION

We took full responsibility of coordination of the sales process, which included, inter alia, defining the commercial terms of the lease agreement and determining the optimal sales structure. Newsec’s Workplace Team prepared provisional development plans that were distributed to the investors with the marketing materials. Extensive and targeted marketing of the asset ensured international and domestic investor demand.

OUTCOME

We received a dozen or so offers from international and domestic investors. With two-phased tendering process, we were able to guarantee an excellent purchase price and a suitable investor as the new landlord of HUS. The hospital area was sold to Veritas Pension Insurance Company for EUR 64 million. HUS will continue as a tenant in Töölö hospital until the completion of Siltasairaala.

After the lease term, Veritas will start the development of the iconic Töölö Hospital into residential and commercial use.

  • Summary Sale and fixed-term leaseback of Töölö Hospital development opportunity
  • Location Topeliuksenkatu 5, downtown Helsinki, Finland
  • Customer The Hospital District of Helsinki and Uusimaa (HUS)
  • Status The sale was completed in August 2018
  • Services provided Capital Markets
Esa Pentikäinen Vice Head of Commercial Brokerage, Newsec Advisory in Finland, MRICS, Partner +358 50 300 6567
Amos Larinkoski Partner, Capital Markets, Newsec Advisory in Finland +358 415 196 462