Smart Business City plan moves ahead

TALLINN - A plan for the further development of the Ulemiste business city has been finally drawn up so that the area will soon be able to meet a brighter future and greater success. The Ulemiste City business quarter on the outskirts of Tallinn will create, together with Finnish bourse-listed company Technopolis, the joint venture Technopolis Ulemiste, that will start developing the grand project.

The cooperation was made under a contract which identified that two thirds of the territory is still owned by Mainor. Mainor’s board chairman, Rainer Aunpu, stated that “The two have a plan to start developing the so-called Smart Business City concept in Latvia, Lithuania, and Russia as well.” Aunpu added that “The value of the business quarter was around 1.5 billion kroons (96.1 million euros). The new company’s equity capital is around 300 million kroons.

However, the cooperation will make “a terrific success,” together with the knowledge within the partnership and gained experiences of the company, assured Martin Seppala, a Technopolis Plc representative.
According to CEO of the Estonian investment company Eften Capital, Viljar Arakas, the joint venture agreement between the Estonian innovation incubator Ulemiste City and Finland’s Technopolis is an event of signal importance and hard to overestimate.

“This is a step of signal importance and high significance which is hard to overestimate in the context of the Estonian real estate market in such a transaction-poor time,” Arakas said.
In his words, the agreement is another sign of Scandinavian companies’ renewed readiness to invest in Estonia. “Be it the takeover of Eesti Telekom, Autoliv’s buyout bid for Norma – it’s like a sign of faith that the worst is behind in Estonia,” he said. The old owner’s staying on in Ulemiste City was certainly expected by Technopolic, Arakas said. “As this probably is Technopolis’ first transaction outside Finland, they surely want the old owner to be on board so the risks are smaller,” he said.

Technopolis representative Seppala said at a news conference that the deal does not represent a real estate transaction for Technopolis. There would have been multiple opportunities for various property deals, but that’s not the objective of Technopolis’ business, he said.

According to the agreement, Ulemiste City and Technopolis will establish a joint venture, called Technopolis Ulemiste, which will acquire around 12 hectares out of the 33 hectares of land owned in Tallinn by Ulemiste City. The property is valued at one billion kroons. Out of the building rights for 162,000 square meters, 46,000 square meters has been already built.
Ulemiste City is the most modern innovation city in the Nordic countries, its biggest values being human-centeredness, energy-efficiency, environment-friendliness and the creative approach in developing a modern working environment.

“Our goal is to create something extraordinary: something that will last for years to come and reveal its true value time and again; a place for the kind of companies to come together whose proximity to one another will allow them to generate that very value - partners we can work with to build the sort of environment we all need. Ulemiste City is a business hub founded on open thinking, where the seeds of good ideas are sown and given all the support and encouragement they need to sprout into successful projects,” says the management of Ulemiste City.

A number of parking garages, a health center, bank branches, fully landscaped parks and a pond are just some of the many examples of structures planned for the city. “The company will be named Technopolis Ulemiste and it will be our first international acquisition and lays an excellent foundation for further growth in Estonia. The Technopolis growth strategy calls for establishing operations in 2 - 3 new countries outside Finland by the year 2014,” says Technopolis Executive Chairman Pertti Huuskonen.

“By partnering with a professional team with a proven track record we will gain swift access to the Tallinn market. With a world class team, infrastructure and customer base, Technopolis Ulemiste center already meets our selection criteria,” says Technopolis CEO Keith Silverang.
“The final execution of the deal within the planned framework depends on the approval of due diligence and joint venture financing procedures. Assuming these procedures are successfully concluded, we estimate that the closing will take place in June of 2010.”

Technopolis’s business focus is to control real estate on the basis of ownership and leasing rights and to construct operating and service premises in order to lease them to companies, and to provide equipment rental, training and advisory services in the high tech area as well as project and service operations, promoting the business of customer companies.