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Extensive vacant retail space lurks amidst Helsinki region construction boom

Construction crews across the capital region are building hundreds of thousands of square metres of new shopping centres. But property management firms say that new capacity is roughly equal to the amount of existing, unused retail space sitting empty.

A 2014 rendering of the exterior of the Tripla shopping centre in Pasila, Helsinki which is currently under construction. Image: YIT

The Tripla shopping centre in Helsinki's Pasila district, which its creators have dubbed "the city's new centre" and the Redi mall in Kalasatama, are just a couple of new projects which will add some 150,000 square metres of new retail space to the metropolitan area in the not-too-distant future.

At the same time, at the beginning of July of this year there was some 145,000 square meters of available retail space sitting vacant in the capital area.

Most of that space is located in Vantaa, a city with more than five percent of its retail space left unused.

Hanna Kaleva, CEO of real estate analysis firm KTI Kiinteistötieto said that for the past three years they've increasingly noticed retailers giving up their shops in the area.

One of the problems with existing available retail spaces, Kaleva says, is that they're not in the right locations.

According KTI figures, tens of thousands of new shops and stores have already been built this year, and - like the projects in Pasila and Kalasatama - are located near public transport services like tram lines and the Metro.

Location is everything

"These bigger shopping centres can draw customers with diverse services," Kaleva said. "When you go shopping it's nice to go out to eat, sit at a cafe and go to the library."

She said that shopping centres on the periphery will have an increasingly difficult time competing with the newer, more centralised ones.

After it finally succumbed to its fate of bankruptcy this autumn, the department store chain Anttila left several large retail spaces empty across the region, as well as in the rest of the country.

Rauhala said that there has been a flurry of interest by firms who want to move into Anttila's sizeable former retail space at the Kamppi shopping centre in downtown Helsinki.

"The entrance is right next to the Metro, so the space is situated in a very busy area," Rauhala said.

Rauhala, whose firm handles Kamppi's rentals, says negotiations are already underway about which company will move in next.

According to Vantaa's Jumbo shopping centre, director Olli Lehtoaro, there is already interest in Anttila's location there, which has yet to finally shut its doors.

"There has been interest and we are currently negotiating," Lehtoaro said. "If needed the 3,000 square meter space can be split up into smaller shops, but we're hoping that we can find a single tenant for the whole space."