Tampere Tram

Why and how were we chosen as a partner?

Newsec has been involved since the 1990s in the development of extensive zoning areas in cities and municipalities. We have carried out land use calculations for the Tampere tramway project from the early stages of the project, starting in 2013. In addition to the Tampere project, Newsec has supported, among others, the Raidejokeri light rail project in the Helsinki metropolitan area, as well as the tramway projects in Vantaa, Turku and Oulu, and has examined the real estate economics of major rail projects such as the Pisararata, Suomirata and Itärata lines.

We are experts in rail projects – what does that mean?

Newsecilla has many years of experience in real estate economics calculations for rail projects. The analyses have been carried out in close cooperation with the clients. We have acquired extensive specialist expertise based on the observations and results that have emerged in previous projects. We use the data obtained from these to examine variables in real estate economics and to analyse changes in the value of rail connections.

A good example of this is the analysis of the Tampere tramway that has been carried out over several years. In that work we have had access to stop-specific time series data showing changes in land use and land prices along the rail project, as well as more broadly across the rest of the city area. The studies require strong market expertise regarding demand, supply and market price levels in the areas under review, both at the time of assessment and as the projects progress. In mapping the market situation, we made use of Newsec’s unique market database, as well as insightful information such as data collected by our property development team on construction companies’ land searches and companies’ location criteria.

What is typically done and examined in rail projects?

Typically, the purpose of these analyses is to determine the expected floor area, floor-area prices, and to estimate how much land-use revenue can be expected from the areas under review in the future from the city’s perspective. The revenues may come from the sale of the areas or from land-use agreement compensations. As part of the property economics analysis for the tramway in Tampere, a market price level was defined for the building rights of plot land in the study areas through which the tramway route passes.

What was Newsec’s role in the Tampere Tram project?

We have been involved in the Tampere project from the very beginning, since 2013. In addition to the alignment of phases 1 and 2 of the tramway between Hervanta–Lielahti–Lentävänniemi, the project also examined a new route plan between Pirkkala town centre and the Linnainmaa district of Tampere in early 2023.

End result?

For phase 1 of the tramway, it was observed that the areas under review had begun to develop in some respects even faster than the original land use plans in the master plan had anticipated. For phase 2 as well, development had started more quickly than projected under the assumption of steady growth, but due to the short review period, the conclusions will be refined in later monitoring reports.

Mention all other rail projects and what significant points there are to say about them?

The construction costs of tramway projects are quickly becoming a topic of public debate. As a counterbalance to these costs, it is justified to also examine the potential land-use revenues associated with tramway projects. From the cities’ perspective, these are a significant and easily measurable source of income. Real estate economic studies are prepared as part of other assessments so that decision-makers receive the broadest possible overall picture of the project’s expenses – and also its returns.

“These studies require strong market expertise regarding demand, supply and market price levels in the areas under review, both at the time of assessment and as the projects progress. In mapping the market situation, we make use of Newsec’s unique market database as well as insightful information, such as data collected by our property development team on construction companies’ land searches and companies’ location criteria,” says Heikki Kangas emphasizing the critical importance of accurate market data.