Translation: Original published in Finnish on 10/21/2026 at 7:45 am EEST.

Cityvarasto announced that it had purchased a property from LähiTapiola in Helsinki's Vallila district, featuring a nearly 15,000 m² former industrial building on its own lot (Mäkelänkatu 58–60). The company plans to open a self-storage facility in the building in 2027, adding self-storage units in phases according to demand, as much of the property will continue to be used as commercial and business premises in the near term. The purchase price was not disclosed, but we estimate that the acquisition is significant relative to the company's size. However, the price per square meter was likely low since the property apparently produced very little income for LähiTapiola. We consider this acquisition a sound strategic move because large city center properties on their own lots rarely come on the market at a good price. The ramp-up of the facility is slowed somewhat, in our view, by the presence of a nearby competitor, Pelican. Nonetheless, we see that there is room for two operators in this growing area and believe that a property like this, which poses a challenge to other business premises providers, fits perfectly with Cityvarasto’s strategy.

Great location, with a competitor right next door

We believe Vallila is an excellent location for self-storage. The surrounding area's high density of housing and small apartments increases the need for storage space outside the home. Over 40% of the apartments in Vallila are studios (Helsinki: 23%), and the average apartment size in the Alppila–Vallila postal code area is only around 42 m² (Helsinki: 63 m²). More than 41,000 vehicles pass by the site on Mäkelänkatu each day, and it is less than a kilometer from Pasila railway station. Furthermore, the population in the surrounding area is expected to grow by around twice the pace of Helsinki by 2030 as the Kalasatama, Pasila, and Hermanninranta areas are developed, meaning the demand base will support even a large facility's occupancy in the long term.

Across Elimäenkatu is Pelican Self Storage’s Vallila location, which opened in 2010 and has approximately 750 storage units. Pelican is Cityvarasto's biggest competitor by far, and 15 of its 16 locations in Finland are in the Helsinki metropolitan area. Cityvarasto also has its own small Pasila facility located only ~1.3 km away. Cityvarasto will proceed with the property in its familiar phased manner, gradually converting business premises into self-storage facilities according to demand.

Second largest real estate acquisition in the company's history

The property was built in 1971. We estimate that the property’s current gross floor area (approximately 11,700 m²) accounts for about 8% of the company’s total lettable area (Q2'26: 140,000 m²), and, according to our estimates, this is the second-largest real estate acquisition in the company’s history. Based on the company's rule of thumb, around 2/3 of the space can be rented out as self-storage area, meaning the entire building could theoretically accommodate ~7,800 m² of self-storage. That is over 10% of the current self-storage space (Q2'26: 67,000 m²), indicating that the property offers years of growth potential in an excellent location. There is also a pending zoning amendment for the lot which was applied for in 2024, and the proposal was on public display in November–December 2025. Under the proposal, the building would partially rise to nine stories, and the gross floor area permitted for building would increase to 12,700 m², 10,000 m² of which would be residential space. While we primarily view this as a factor that could increase the property’s residual value, the property’s development will proceed in accordance with the company’s typical strategy for self-storage and business premises. The ground floor has a K-Market grocery store as a tenant, but the occupancy rate is otherwise very low, in our estimation. Consequently, success in renting business premises will also significantly impact returns.

Cityvarasto could turn LähiTapiola's problem property into a potentially very profitable site

We estimate the transaction price to be around 3-6 MEUR. It is important to note that it is still very difficult to assess the amount at this time. A more precise figure can be estimated from the Q4 report. In any case, we estimate that the purchase price will be significant relative to the average annual investment target of 10 MEUR, and our near-term investment forecasts face upward pressure. The extremely weak condition of the business premises market has likely weighed on the price, as the vacancy rate of Vallila offices has risen to 22.8% (Helsinki Research Forum, 9/2026). Cityvarasto's strategy of leasing business premises at favorable rates and gradually converting them into self-storage facilities can make a property very profitable relative to a low purchase price, even though the site was likely very challenging for LähiTapiola. However, due to the target's large size, achieving strong return figures will likely take longer than usual.