The master planning for the Travel and Service Centre and the making of the local detailed plan no have been started in 2016.

Transcription

1 Summary

2 Starting points Travel and Service Centre The master planning for the Travel and Service Centre and the making of the local detailed plan no have been started in In addition, project planning for an underground parking facility and the preparations for the related local detailed plan no began in The report on the comparison options at the master planning phase proposed an option to function as a basis for further planning. On 6 April 2017, the project steering group approved the option. The option and its scope data are the starting point for the estimates regarding the economic impacts. The planning and immediate impact area for local detailed plan no. 8640

3 Starting point for the estimates Premises (phase 1 + phase 2) Offices: 56,500 gross floor m 2 (30, ,245) Retail: 27,308 gross floor m 2 (15, ,308) Housing: 115,073 gross floor m 2 (67, ,795) Total: 198,881 gross floor m 2 6 April 2017

4 Source: Images. Inc. Study design Scenarios for the estimates The basic scenario until 2040: moderate growth until 2030 and from there onwards, accelerating growth The international airport scenario, the passenger terminal at the Travel and Service Centre Levels in the study of the traffic system Tampere Central Region National level International level Levels in the study of the ecosystem Network level Organisation level

5 Method Assessment of the ecosystem effects as a method The conventional unit of measurement in urban development is the gross floor square metre. The value of a gross floor square metre often becomes simplified into the price of land, construction costs and the profits expected from a property investment. The final value of a gross floor square metre is created by the activities of the residents and the enterprises using the premises: i.e., by the ecosystem effects. The ecosystem effects deal with the income effect caused by a change that will take place in the mobility of people.

6 Method In the ecosystem theory, value is created at the network level and appropriated at the organisation level Network level Organisation level Features of an ecosystem Value creation Value appropriation Means for value appropriation

7 Results Foreign tourism income in the Tampere Region 8 Current state 210,000 overnight stays by foreign travellers (Visit Finland s statistics) Income flow 31 million euros Basic scenario 2040 Assumption: Annual growth of 4% in tourism (Visit Finland) 525,000 overnight stays by foreign travellers Income flow 79 million euros International airport scenario 2040 Assumption: The annual number of passengers travelling via Tampere-Pirkkala Airport will be 4 million higher than in the basic scenario % of the air passengers will be foreigners 44% of the foreign visitors will stay overnight in the Tampere Region and the rest in other Finnish regions 1,330,000 overnight stays by foreign travellers Income flow 199 million euros Source: Matkailu ja työllisyys Tampereen seutukunnassa vuonna 2012 Overnight stays by foreign travelers in the Tampere Region in 2040 Current Nykytila state 2040 perus basic 2040 airport lento Income flow from the overnight stays by foreign travelers ( million per year) 0 Current Nykytila state 2040 basic perus 2040 airport lento

8 Results Domestic tourism income in the Tampere Region 9 Current state 1.24 million overnight stays by domestic travellers (Visit Finland s statistics) Assumption: 150 euros / person / day Income flow 186 million euros Basic scenario 2040 Assumption: An annual growth of 4% in tourism (Visit Finland) 3.1 million overnight stays by domestic travellers Income flow 466 million euros International airport scenario 2040 Assumption: The growth in domestic travel will comply with the basic scenario ,50 3,00 2,50 2,00 1,50 1,00 0,50 0, Source: Matkailu ja työllisyys Tampereen seutukunnassa vuonna 2012 Overnight stays by domestic travelers in the Tampere Region (million travelers per year) Current Nykytila state 2040 basic perus 2040 airport lento Income flow from the overnight stays by domestic travelers ( million per year) 0 Current Nykytila state 2040 perus basic 2040 airport lento

9 Results Income gained from daily shopping 10 Current state During the peak hour, 1,880 long-distance train passengers (10% of the number of daily passengers) They spend 16 euros on daily shopping on their trip 200 long-distance bus passengers They spend 12 euros on daily shopping on their trip The annual income flow: 16 million euros Basic scenario 2040 During the peak hour, 2,000 long-distance train passengers During the peak hour, 1,580 commuter train passengers 200 long-distance bus passengers Income flow in 2040: 26 million euros International airport scenario 2040 For the part of daily shopping, the increase in the income flow will comply with the basic scenario 2040 Regional travellers daily consumer goods specialty shops restaurants/cafés Train travellers daily consumer goods specialty shops restaurants/cafés Tampere Travel and Service Centre Spending by visitors /day /day The spending by the visitors has been calculated as shopping during one day. i.e., their consumption at the Travel and Service Centre during their trips. 11,86 5,05 3,86 2,95 16,08 3,37 3,86 8,85 Average value of daily consumer goods 21,90 Source: Santasalo, PTY

10 The ecosystem perspective describes the long-term economic impacts of urban development The ecosystem effects of the Travel and Service Centre project can be estimated in two ways: Retail Offices Housing Retail Offices Housing Value creation in the ecosystem describes the potential of the economic activities Value appropriation in the ecosystem describes the result of the economic activities

11 Value creation: companies turnovers and residents income Value creation in the ecosystem consists, for the part of offices and retail premises, of the combined turnover of the enterprises and shops that occupy the premises and, for the part of housing, of the combined income of the residents Based on a cash flow statement The turnovers and the income have been discounted to the current value and summed for the cash flow statement period of the property Retail Offices Housing Offices: 5,100 million euros Retail: 1,100 million euros Housing: 2,300 million euros As for the offices, for example, 200 times higher than the value of the land and 31 times higher than the value of the property investment Desribes the potential of the economic activities enabled by property type

12 Value appropriation: the operating profit and the savings Value appropriation in the ecosystem consists, for the part of offices and retail premises, of the combined turnover of the enterprises and shops that occupy the premises and, for the part of housing, of the combined income of the residents Retail Offices Housing Based on a cash flow statement The turnovers and the income have been discounted to the current value and summed for the cash flow statement period of the property Offices: 700 million euros Retail: 50 million euros Housing: 300 million euros As for the offices, for example, 28 times higher than the value of the land and 4.4 times higher than the value of the property investment Describes the result of the economic activities enabled by property type

13 M M Comparison of the ecosystem effects in the two scenarios Retail Offices Housing Retail Offices Housing Basic scenario Value creation Value appropriation Airport scenario Housing Asuminen Retail Liiketilat Offices Toimistot Asuminen Housing Liiketilat Retail Toimistot Offices

14 Results Ecosystem effects in the airport scenario Offices Value creation + 29% Value appropriation + 34% Retail Value creation + 18% Value appropriation + 488% Housing Value creation + 9% Value appropriation + 33% The changes in the ecosystem effects for the part of offices when more international companies are located in the area (the rent and yield levels in Ruoholahti, Helsinki, Catella 2017) A 29% increase in value creation (a total of 6,603 million euros) The yield will decrease by 1.25 percentage points The rent will increase by 4.5% The share of the rent out of the turnover will decrease by 0.25 percentage points Value appropriation will increase by 34% (a total of 929 million euros) The changes in the ecosystem effects for the part of retail premises, taking into account the increased traffic flows and demand due to the Tampere international airport Value creation will increase by 18% (a total of 1,303 million euros) The share of services out of the retail premises will increase to 45% and the average rent level will increase by 20% Value appropriation will increase by 488% (a total of 294 million euros) The growing traffic flows will considerably increase the profit margins of the service entrepreneurs operating at the retail premises The changes in the ecosystem effects when the residents average income is 33% higher (Statistics Finland) Value creation will increase by 9% (a total of 2,507 million euros) Imputed rent will be the same as in the basic scenario The occupancy rate will improve by one third Less people will move to the area Value appropriation will increase by 33% (a total of 500 million euros)

15 Results Ecosystem effects in the basic scenario / year OFFICES 325 MILLION HOUSING 64 MILLION RETAIL 72 MILLION The ecosystem effects are partly overlapping

16 Results OFFICES 325 MILLION HOUSING 64 MILLION RETAIL 72 MILLION DAILY SHOPPING 10 MILLION The ecosystem effects during the first year of use, compared with the increase in the tourism income and daily shopping with respect to the current state FOREIGN TOURISM INCOME 47 MILLION DOMESTIC TOURISM INCOME 280 MILLION

17 Results Ecosystem effects in the international airport scenario / year OFFICES 362 MILLION HOUSING 69 MILLION RETAIL 85 MILLION The ecosystem effects in the international airport scenario

18 Results OFFICES 362 MILLION HOUSING 69 MILLION RETAIL 85 MILLION DAILY SHOPPING 10 MILLION In the international airport scenario, the foreign tourism income will increase vigorously FOREIGN TOURISM INCOME 168 MILLION DOMESTIC TOURISM INCOME 280 MILLION

19 Results Impact on jobs Separate study (in addition to the economic impacts created by the activities at the premises and the income effect of the flows of people) Construction Direct effect: 3,388 person-years Indirect effect: 7,260 person-years Use of the premises Offices: 2,600 jobs Retail: 1,100 jobs The increase in employment created by a one-million-euro investment is directly 7 person-years and indirectly 15 person-years (Source: Statistics Finland) The calculation criterion used for offices is 18 m 2 /employee and 20 m 2 /employee for retail premises (Source: Deloitte 2010)

20 Results Key conclusions and recommendations Conclusions The value of the economic ecosystem effects of the implementation of the Travel and Service Centre will be large, compared with the investments required by the implementation of the project. The implementation of the other projects in the nearby areas will catalyse and bring synergies for value creation. In the international airport scenario, the foreign tourism income can be more than tripled and the value creation of the activities at the premises would be approximately 10-15% higher. Recommendations for planning and project development Development of a unified commercial or shopping centre concept the focus will be on the Travel Centre and the surrounding area will be included in the study. Ensuring the functionality of the Travel and Service Centre by modelling flows of people. Proactive adaptation of the services to the peak hours (the commercial supply, the Travel Centre services, public transport and other transport services). Development of the services of a sharing economy ensuring the purchasing power. Increased value creation in tourism by developing the Travel and Service Centre and the travel chains a need for organising. The visibility of internationality, the local technology and scientific community and the conference activities at the Travel and Service Centre - preparations in the room programme. Preparations for the development of the airport and for more extensive terminal facilities adaptability in the Travel and Service Centre s room programme. Recommendations for the management Development of the Travel Centre as a private project in the lifecycle. Focus on the optimisation of value creation in the ecosystem, instead of on the maximisation of the price of the land. Organising the management of value creation in the ecocystem a need for organising.

21 Background report

22 CONTENTS 1 ECONOMIC ECOSYSTEM AND A CHANGE IN MOBILITY 1.1 Basic idea of the ecosystem effects 1.2 The current state of and development prospects for the traffic system 2 TRAVEL AND SERVICE CENTRE PROJECT 2.1 Gross floor areas and uses 2.2 Planning phase 3 STARTING POINTS FOR THE ESTIMATES 3.1 Assumptions and calculation criteria 3.2 Scenarios and methods 4 RESULTS 4.1 Impact on jobs 4.2 Value creation based on the mobility of people 4.3 Value creation (based on the premises) in the ecosystem 5 CONCLUSIONS AND RECOMMENDATIONS

23 1. Economic ecosystem and a change in mobility 1.1 Ecosystem perspective on urban development

24 Basic idea of the ecosystem effects The conventional unit of measurement in urban development is the gross floor square metre. The value of a gross floor square metre often becomes simplified into the price of land, construction costs and the profits expected from a property investment. The final value of a gross floor square metre is created by the activities of the residents and the enterprises using the premises: i.e., by the ecosystem effects. The ecosystem effects deal with the income effect caused by a change that will take place in the mobility of people.

25 The ecosystem perspective describes the long-term economic impacts of urban development The ecosystem effects of the Travel and Service Centre project can be estimated in two ways: Offices Retail Housing Offices Retail Housing Value creation in the ecosystem describes the potential of the economic activities Value appropriation in the ecosystem describes the result of the economic activities

26 Value creation: companies turnovers and residents income Desribes the potential of the economic activities enabled by property type Offices Retail Housing Value creation in the ecosystem consists, for the part of offices and retail premises, of the combined turnover of the enterprises and shops that occupy the premises and, for the part of housing, of the combined income of the residents Based on a cash flow statement The turnovers and the income have been discounted to the current value and summed for the cash flow statement period of the property Offices: 5,100 million euros Retail: 1,100 million euros Housing: 2,300 million euros As for the offices, for example, 200 times higher than the value of the land and 31 times higher than the value of the property investment

27 Value appropriation: the operating profit and the savings Offices Describes the result of the economic activities enabled by property type Retail Housing Value appropriation in the ecosystem consists, for the part of offices and retail premises, of the combined turnover of the enterprises and shops that occupy the premises and, for the part of housing, of the combined income of the residents Based on a cash flow statement The turnovers and the income have been discounted to the current value and summed for the cash flow statement period of the property Offices: 700 million euros Retail: 50 million euros Housing: 300 million euros As for the offices, for example, 28 times higher than the value of the land and 4.4 times higher than the value of the property investment

28 Levels of ecosystem effects Value creation A city s focus is often on the value of the land, which forms a small part of all economic activities Describes the amount of the activities: Vibrancy of the area The citizens pay taxes on their income Value appropriation Enterprises cannot operate in the area if their operations are unprofitable, i.e. value appropriation is more important to enterprises Describes the sustainability of the activities: Vitality of the area The enterprises pay taxes on their profits

29 In the ecosystem theory, value is created at the network level and appropriated at the organisation level Network level Organisation level Features of an ecosystem Value creation Value appropriation Means for value appropriation

30 1. Economic ecosystem and a change in mobility 1.2 Mobility as an enabler of the ecosystem

31 Tampere 32 The growing population The population in the Tampere Region is increasing and has vigorously focused on the Tampere Central Region, attracting a highly educated labour force and a wide range of business activities. Tampere Region remains as an attractive, strongly growing area in the middle of the growth zone that is located between the Helsinki Metropolitan Area and Ostrobothnia. Tampere Region has good preconditions for this position, as it represents Finland in a miniature size. Besides the Tampere Central Region, Tampere Region boasts several vital subregions, as well as rural resources and natural features Tampere region Pirkanmaa Source: Tampere Region land use plan

32 At a glance Accessibility is a competitive asset 33 The Tampere region is an area from where a number of cities can be reached in a couple of hours. In the future, along with increased train speeds, several cities could be reached in an hour. As regards the current train speeds, shorter travel times would be possible but the capacity of the railway network is not large enough. Tampere Region is a hub for national traffic. Fast connections to the Helsinki Metropolitan Area and to other centres are important. The traffic connections within Tampere Region and the development of the traffic in the Tampere Central Region are important shorterdistance objects of development. The flight connections from Tampere-Pirkkala Airport and Helsinki Airport are a precondition for communication between Tampere Region and the rest of the world. The direct flight connections from Tampere-Pirkkala Airport to European destinations are particularly important ,000 km

33 Traffic development projects 34 The first phase of the tramway from the city centre to Hervanta and to Tampere University Hospital is being built and will start operating in During the second phase, the tramway will extend from the city centre to Lentävänniemi. The Tampere Region land use plan has made preparations for extending the tramway to Linnainmaa, Pirkkala and Ylöjärvi. Along with the growing Tampere Central Region, there will be more demand for commuter train transport. The railway network will extend towards Kangasala, Lempäälä, Nokia and Ylöjärvi. Thanks to the ribbon-like land use, it will be possible to locate housing and jobs along the railway lines, ensuring sufficient passenger flows. There is a reservation for a new rail link from the Travel and Service Centre to Tampere-Pirkkala Airport in the plan. Source: Tampere Region land use plan 2040

34 Commuting and shopping in Tampere Region 35 The location of Tampere Region in the strongest one fourth of the Finnish economy, in the inland of southern and western Finland, makes it a significant area of trade, production and services. Most of the commuter traffic runs to Tampere, but shopping trips are also made between other municipalities. The growing population in the Tampere Central Region, the export industries and international communication require good traffic connections. Needs for travelling between the municipalities in the ELY Centre s area of competence Commuting ( ) Commuting (over 200) Needs for travelling between the municipalities in the ELY Centre s area of competence Shopping trips Source: Tampere Region land use plan 2040

35 Railway traffic as an accelerator of growth 36 Tampere is the most significant railway traffic hub in Finland with connections to Helsinki, Seinäjoki, Jyväskylä, Turku and Pori. The number of passengers on the main railway line and the Ostrobothnia line are the largest in Finland and will continue to increase vigorously. Tampere s central location and good traffic connections also create preconditions for the economic growth of the surrounding regions. Passenger transport in 2016 Long-distance transport 12,047 million trips Number of trips per railway section Under 0,1 million 0,1 0,5 million 0,5 1 million 1 2 million 2 3 million 3 5 million 5 million The figures per railway section indicate the annual number of trips (1,000 trips). Due to the changes made in the compilation of statistics, the figures are not fully comparable to the ones from previous years. Source: Finnish Transport Agency, VR

36 Growth forecast for railway traffic 2035 It is predicted that the largest increase will take place on the Helsinki-Oulu railway line and on the line running from Helsinki to the eastern State border. Under 0,1 million 0,1 0,5 million 0,5 1 million 1 2 million 2 3 million 3 5 million 5 million Change Increasing passenger numbers Decreasing passenger numbers 37 According to estimates, there will be about 6 million passengers along the Tampere-Helsinki line and about 3 million along the Tampere-Seinäjoki line in Thanks to the Helsinki - Turku shortcut, the annual number of passengers will increase to about 2.5 million. Source: Finnish Transport Agency, Liikenneolosuhteet Rautateiden henkilöliikenteen ennustetarkasteluja (Transport Conditions 2035: Forecasting Surveys on Rail Passenger Transport, English summary)

37 At a glance 38 Railway connects the growing central regions In Finland, urbanisation will continue and most of the population growth will take place along the railways. According to estimates, the Tampere Central Region will grow proportionally the most by The implementation of shorter travel times requires more rail track capacity towards Helsinki and Seinäjoki. Fast trains and the opening up of the passenger transport for competition will increase passenger numbers between the central regions. The most vigorously growing central regions in Finland until 2030 (growth rate ) Tampere Central Region 12.9% Helsinki Central Region 12.0% Porvoo Central Region 8.8% Kuopio Central Region 7.5% Oulu Central Region 7.4% Turku Central Region 5.2% Jakobstad Central Region 5.1% Jyväskylä Central Region 4.7% Vaasa Central Region 3.7% Riihimäki Central Region 2.6% Hämeenlinna Central Region 2.6% Seinäjoki Central Region 1.9% Asukasluku 2015 = Population 2015 Kasvu vuoteen 2030 = Increase by 2030 Source: Statistics Finland

38 Tampere, by far the most accessible city Thanks to the higher speeds in railway traffic in the future, the accessibility of Tampere will significantly improve for trips that take more than one hour: The population that can be reached within 1 h 30 min will almost triple (~1 million => ~3 million) 0,08 0,30 0,36 0,43 0,49 0,56 0,67 0,09 0,34 0,42 0,48 0,58 0,73 0,96 Within two hours of travelling, almost four million inhabitants (about 70% of Finland s population in 2030) Year ,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 Accessibility of Tampere (million residents) 10 min 20 min 30 min 40 min 50 min 1 h 1 h 10 min 1,67 0,84 1 h 20 min 2,77 Vuosi 2016 Skenaario ,05 1 h 30 min 3,49 1,75 1 h 40 min 3,79 2,88 1 h 50 min 3,93 3,36 2 h 9 CALCULATION CRITERIA FOR ACCESSIBILITY Accessibility has been calculated by using the shortest travel time (car, train or their combination) 2016 Saavutettavuus = accessibility 2030 For train travels, 10 minutes for park-and-ride activities have been included in the calculations Year 2016 The current speeds of motor and railway traffic Population data from 2016 Basic scenario 2030 The travel times for railway traffic will be 30% shorter The motor traffic speeds will remain unchanged The population will grow as estimated by a projection by Statistics Finland

39 Long-distance traffic between Tampere Region and the other regions All modes of travel 40 Out of the trips made between Finnish regions that are longer than 100 km, the largest volume is between Tampere Region and Uusimaa Region (7.6 million trips per year). Amongst other important directions for Tampere Region are Southwest Finland, Satakunta Region, Central Finland and Southern Ostrobothnia. Trips longer than 100 km / million trips (2012) Uusimaa 7,571 Varsinais-Suomi 2,551 Satakunta 2,046 Keski-Suomi 1,696 Etelä-Pohjanmaa 1,570 Päijät-Häme 1,324 Pirkanmaa 1,320 ABROAD 0,798 Kanta-Häme 0,524 Pohjois-Pohjanmaa 0,508

40 Current state of Finnish air traffic Out of the total volume of Helsinki Airport, by far the strongest passenger flow is between Finland and Europe (11.9 million). A total of 2.7 million trips per year are made between Helsinki and the domestic destinations. A total of 1.9 million trips are made between Helsinki and Asia. In Finland, the traffic at the regional airports is quite modest compared with the other Nordic Countries. However, they would have a significant effect on the growth potential of the regional economies. Passenger flows at Helsinki Airport in 2016 Rest of the world 440,000 EU 10.4 million Domestic 2.7 million Asia 1.9 million Other parts of Europe 1.5 million A trip means a person s one-way journey.

41 Share (%) of the overnight stays by foreign travelers in the Finnish regions in 2016 International tourism by region 42 A total of 5.8 million overnight stays by foreign travellers were registered in Finland in 2016 The parts of Finland that are located between Uusimaa Region and Lapland are clearly behind in international tourism. The share of foreign visitors to the Tampere Region (14%) can be increased considerably. It requires the development of the tourism product of the Tampere Region, as well as the development of marketing, international flight connections and travel chains. The Travel and Service Centre will be an important hub for flows of travellers.

42 Share of the overnight stays by foreign travelers out of all overnight stays per region in 2016 Tourism income (comparable to export income) 3.9 billion euros - has doubled since the year more than twice as big as the health sector export - bigger than the total of the high tech export from Finland 43 Growth target? Other Japan Estonia Russia China Sweden Germany Spending per visit 1. China Australia Switzerland Canada Spain France USA India 551 Growth target? Growth target? Global tourism grows at an annual rate of 4% Growth target? By 2040, 10 billion euros of tourism income in Finland Growth target? Source: Visit Finland, Statistics Service Rudolf Source: Ministry of Economic Affairs and Employment of Finland and Visit Finland: Finnish Tourism in Numbers 2016

43 Yöpymiset Overnight stays All travelers Overnight stays in the Tampere Subregion Tampere Muut Other kunnat municipalities Overnight Yöpymiset stays Foreign travelers Even though the number of foreign travellers in the Tampere Region has decreased, the number of domestic travellers has increased. Travel in the Tampere region has currently focused on the domestic market. However, Tampere has a large potential for increasing international travel Tampere Muut Other kunnat municipalities Geographic boundaries in 2017 Source: Statistics Finland

44 Making Tampere-Pirkkala Airport an international hub for Inland Finland 45 Tampere is a hub in Inland Finland that is very easily accessible by road and rail. The good national accessibility and the large population potential create the preconditions for Tampere for becoming a hub for international air transport serving Inland Finland. More international flight connections and a fast connection from the Tampere Travel and Service Centre to the airport are required in order to attract international companies and increase international travel. Source: AiRRport report (forecast) Passengers at Tampere-Pirkkala Airport 0.4 million million Helsinki Airport passengers who shift to using Tampere-Pirkkala Airport (based on the current total number of passengers) 0.8 million million Total 1.2 million million Unimplemented potential million million Total million million Table 7: Passenger potential of Tampere Airport, along with significant improvements in land and flight connections. Image 66: An estimate for each region regarding the shares of the current international passengers of Helsinki Airport (excluding the international transit passengers) who will shift to flying via Tampere AiRRport, along with improved land and flight connections.

45 Potential flight connections from Tampere Category Potential destinations The most important economic centres in Europe => transit connections to North America London, Franfurt, Paris, Amsterdam, Brussels Core business region in Europe & the city holiday destinations City holiday destinations Mediterranean destinations Main airports in Northern Europe => transit connections further to Europe Prague, Vienna, Milan, Berlin Barcelona, Malaga, Rome, Athens, Antalya Alanya (seasonal variation) Copenhagen, Stockholm, Oslo, Riga Table 14: The most important flight connections from Tampere, grouped by nature of destination. 46 Sun belt Source: AiRRport report

46 2. Travel and Service Centre project 2.1 Planning phase 2.2 Gross floor areas and uses

47 Planning phase The master planning for the Travel and Service Centre and the making of the local detailed plan no have been started in In addition, project planning for an underground parking facility and the preparations for the related local detailed plan no began in The final report on the comparison options at the master planning phase proposed an option to function as a basis for further planning. The option and its scope data are the starting point for the estimates regarding the economic impacts. On 6 April 2017, the project steering group approved the proposition in the final report to function as the basic solution and total volume for the Travel and Service Centre. The planning and immediate impact area for local detailed plan no. 8640

48 Gross floor areas and uses Premises (phase 1 + phase 2) Offices: 56,500 gross floor m 2 (30, ,245) Retail: 27,308 gross floor m 2 (15, ,308) Housing: 115,073 gross floor m 2 (67, ,795) Total: 198,881 gross floor m 2 6 April 2017

49 3. Starting points for the estimates 3.1 Assumptions and calculation criteria

50 Development areas in the city centre of Tampere 51 The station area is the most important development object in the Tampere City Centre Development Programme. According to calculations, there will be about 6,000 new jobs and 3,400 residents in the station area. It will also boast a large amount of accommodation capacity. After the completion of the Travel and Service Centre, it is expected that more than 20 million passengers per year will travel via it. FIVE-STAR CITY CENTRE DEVELOPMENT CONCEPT TAMPERE CITY CENTRE DEVELOPMENT PROGRAMME CITY BOARD OF TAMPERE, 2017

51 Destinations close to the Travel and Service Centre Tampere Hall 335,000 visitors per year The target is 420, events per year ANNUAL NUMBER OF VISITORS TO EVENTS AND EVENT VENUES Tampere University and Technopolis Museums 52 University: 2,100 jobs, 15,000 students Deck and the Arena Cinemas Football A large number of events, ice hockey in the Finnish Elite League Theaters Ice Hockey Expectation: More than one million visitors per year 2,400 jobs Tampere Region Festivals (Pirfest) Tamper Hall

52 Traffic flows at the Travel and Service Centre 53 At the Travel and Service Centre Train passengers Residents The shopping centre s customers The hotels customers Office workers Arriving and departing Trams and buses Coaches Trains Cars Pedestrians Cyclists Number of train passengers per year 4.3 million (2015) 4.9 million (the 2040 forecast, an annual increase of 0.5%) If an annual increase of 1% => 5.5 million passengers in 2040 If an annual increase of 1.5% => 6.2 million passengers in 2040 If an annual increase of 2% => 7 million passengers in 2040 Peak-hour (4 pm - 5 pm) passenger numbers City transport 2,200 passengers (2015, by bus) 3,000 passengers (the 2040 forecast, 65% by tram) Long-distance buses 200 passengers (the 2040 forecast) Commuter trains 1,580 passengers (the 2040 forecast) Long-distance trains 1,800 passengers (2015) 2,000 passengers (the 2040 forecast) Cyclists and pedestrians Source: EP Logistics, ,000 people (the 2040 forecast)

53 Traffic flows at the Tampere Travel and Service Centre 54 According to an estimate by EP Logistics, the flow of people during the peak hour would be divided as depicted on the adjacent image and it would be approximately 10,500 persons per hour. According to the estimate, the flow of people would increase by about 20% from the current situation.

54 Spending by travellers 55 Source: Matkailu ja työllisyys Tampereen seutukunnassa vuonna 2012

55 Tampere Travel and Service Centre spending by visitors Tampere Travel and Service Centre Spending by visitors /day /day 56 Regional travellers daily consumer goods specialty shops restaurants/cafés Train travellers daily consumer goods specialty shops restaurants/cafés 11,86 5,05 3,86 2,95 16,08 3,37 3,86 8,85 The spending by the visitors has been calculated as shopping during one day. i.e., their consumption at the Travel and Service Centre during their trips. Average value of daily consumer goods 21,90 Source: Santasalo, PTY

56 Value of land and the construction costs Value of the building rights / gross floor m 2 (total) Offices: 450/gross floor m 2 ( 25,425,000) Retail: 550/gross floor m 2 ( 15,019,400) Housing: 800/gross floor m 2 ( 92,058,400) Total: 132,502,800 Source: Newsec 2015 Offices Business spaces Apartments Land value Cost of construction The amount of building rights, grouped by property type (phase 1 + phase 2) Offices: 56,500 gross floor m 2 (30, ,245) Retail: 27,308 gross floor m 2 (15, ,308) Housing: 115,073 gross floor m 2 (67, ,795) Construction costs / gross floor m 2 (total) Offices: 1,700/gross floor m 2 ( 96,050,000) Retail: 2,000/gross floor m 2 ( 54,616,000) Housing: 2,900/gross floor m 2 ( 333,711,700) Total: 484,377,700 Source: Newsec 2015 The construction costs for the deck, 3,000 euros/m 2 (Newsec 2015), have not been taken into account in the calculation Total: 198,881 gross floor m 2

57 Property investment value offices Yield: 6.75% The estimate varies between % (Catella 2017) Vacant premises: 0 4.5% Inflation: 1% Rentable area: 49,226 m 2 Relation to the gross floor area: 87% (Haahtela) Gross rent: 22/m 2 /month (a total of 1,082,977/month) The estimate varies between 16 23/m 2 /month (Catella 2017) Maintenance costs: 3/m 2 /month ( 147,679/month) Cash flow Discounted cash flow Discounted residual value Cash flow in the first year: 11 million Discounted residual value: 81 million Property investment value: 157 million Renovation costs: 0.30/m 2 /month ( 177,214/month) The property investment value is calculated by summing the discounted cash flows for the period of ten years and the discounted residual value

58 Property investment value retail Yield: 6.75% The estimate varies between % (Catella 2017) Vacant premises: 0 1.5% Inflation: 1% Rentable area: 19,116 m 2 Relation to the gross floor area: 70% (estimate) Gross rent: 25/m 2 /month (a total of 477,890 /month) The estimate varies between 15 35/m 2 /month (Catella 2017) Cash flow Discounted cash flow Discounted residual value Maintenance costs: 3.5/m 2 /month ( 147,679/month) Renovation costs: 0.30/m 2 /month ( 177,214/month) Cash flow in the first year: 5 million Discounted residual value: 37 million Property investment value: 71 million The property investment value is calculated by summing the discounted cash flows for the period of ten years and the discounted residual value

59 Property investment value housing Cash flow Discounted cash flow Discounted residual value Cash flow in the first year: 16 million Discounted residual value: 377 million Property investment value: 507 million Yield: 3% The estimate is based on expert interviews Vacant premises: 0 4.5% Inflation: 1% Rentable area: 49,226 m 2 Relation to the gross floor area: 87% (Haahtela) Gross rent: 18/m 2 /month (a total of 1,585,189/month) The estimate is based on expert interviews Maintenance costs: 3/m 2 /month ( 147,679/month) Renovation costs: 0.30/m 2 /month ( 177,214/month) The property investment value is calculated by summing the discounted cash flows for the period of ten years and the discounted residual value

60 3. Starting points for the estimates 3.2 Scenarios and methods

61 Kuva: Images. Inc. Scenarios The basic scenario until 2040: moderate growth until 2030 and from there onwards, accelerating growth The international airport scenario Levels in the study of the traffic system Tampere Central Region National level International level Levels in the study of the ecosystem Network level Organisation level

62 General description of methods The main method that has been used in this work is the ecosystem approach (ecosystem and platform business models) that estimates the preconditions for the development of the business and industrial sector. The method for creating ecosystems estimates how the master plan draft for the planning area will support the companies ability to create new value together (i.e. the draft will act as a platform for the companies) and enable profitable business activities. The ecosystem theory defines the boundary conditions with the help of which the preconditions for the creation, development and vitality of an ecosystem can be estimated. The ecosystem theory is suitable for analysing both current and developing networks. The volumes of international and domestic tourism and commuting are estimated on the basis of accessibility and the development forecasts in the field. This deals with what functions the regenerated station area will attract and how actively the functions will be promoted. Objectives at various levels are estimated, using the scenario technique. The income generated by the increasing traffic, enabled by the Travel and Service Centre, is estimated based on studies regarding the average purchase of different groups of people. The domestic and foreign travellers and daily visitors are studied separately. The overall development of the traffic system is in the background. The effects of the Travel and Service Centre project on the future potential of Tampere Airport are estimated separately, assuming that the Travel and Service Centre would function as a national supply point for the airport. When estimating the change in the attraction of the investments, real option thinking for the investments is used, in addition to the conventional return value based method. The conventional return value based method is suitable for estimating investments in a situation where it is easy to predict the future. Real option thinking has guided the assessment regarding the ecosystem effects in the alternative scenarios. Due to the long time span for development and the general fast rate of change, the estimated area has several attractive uses that will change over the course of time. By means of real option thinking, it can be perceived how the value of the investments can be increased if the original uses of the area change along with the development of the area and how it should steer the planning.

63 Calculation method for the ecosystem effects Offices The share of the rent is 4% of the turnover The combined turnover of the enterprises operating at the premises is estimated by calculating the rent per square metre / 0.04 * the rentable square metres Variable costs 80% and fixed costs 5% of the turnover Operating profit is calculated by subtracting the costs from the turnover Retail The share of the rent is 8% of the turnover The combined turnover of the enterprises operating at the premises is estimated in the same way as for the offices Personnel costs 9% and the other costs 86% of the turnover Operating profit is calculated by subtracting the costs from the turnover Housing The share of the housing costs is 29% of the income The combined income of the residents in the area are estimated by calculating the imputed rent per square metre / 0.29 * the square metres for housing Other consumption 63% and the housing costs 22% of all consumption expenditure Savings are calculated by subtracting the consumption expenditure from the income

64 4. Results 4.1 Impact on jobs during the construction and use of the premises

65 Results Impact on jobs Separate study (in addition to the economic impacts created by the activities at the premises and the income effect of the flows of people) Construction Direct effect: 3,388 person-years Indirect effect: 7,260 person-years Use of the premises Offices: 2,600 jobs Retail: 1,100 jobs The increase in employment created by a one-million-euro investment is directly 7 person-years and indirectly 15 person-years (Source: Statistics Finland) The calculation criterion used for offices is 18 m 2 /employee and 20 m 2 /employee for retail premises (Source: Deloitte 2010)

66 4.2 Economic impacts of tourism and travelling

67 Economic impacts of tourism and travelling 68 Consists of three sources of income Foreign tourism income According to estimates, the spending by travellers complies with the figures given in the report Matkailu ja työllisyys Tampereen seutukunnassa vuonna 2012 (~150 euros/person/day) According to the Visit Finland s Visitor Survey 2016, travellers stay the average of 3.7 days Domestic tourism income Spending by domestic travellers has been assessed in the same way as for the foreign tourism income The number of overnight stays and their development forecast are based on the estimates by Visit Finland Income gained from daily shopping The number of daily passengers is based on the report Tampere Travel and Service Centre, Flows of People 2040, by EP Logistics Spending on daily shopping has been calculated on the basis of the reports by Tuomas Santasalo

68 Results Foreign tourism income in the Tampere Region 69 Current state 210,000 overnight stays by foreign travellers (Visit Finland s statistics) Income flow 31 million euros Basic scenario 2040 Assumption: Annual growth of 4% in tourism (Visit Finland) 525,000 overnight stays by foreign travellers Income flow 79 million euros International airport scenario 2040 Assumption: The annual number of passengers travelling via Tampere-Pirkkala Airport will be 4 million higher than in the basic scenario % of the air passengers will be foreigners 44% of the foreign visitors will stay overnight in the Tampere Region and the rest in other Finnish regions 1,330,000 overnight stays by foreign travellers Income flow 199 million euros Source: Matkailu ja työllisyys Tampereen seutukunnassa vuonna 2012 Overnight stays by foreign travellers in the Tampere Region in 2040 Current Nykytila state 2040 perus basic 2040 airport lento Income flow from the overnight stays by foreign travellers ( million per year) 0 Current Nykytila state 2040 basic perus 2040 airport lento

69 Results Domestic tourism income in the Tampere Region 70 Current state million overnight stays by domestic travellers (Visit Finland s statistics) - Assumption: 150 euros / person / day - Income flow 186 million euros Basic scenario Assumption: An annual growth of 4% in tourism (Visit Finland) million overnight stays by domestic travellers - Income flow 466 million euros International airport scenario Assumption: The growth in domestic travel will comply with the basic scenario ,50 3,00 2,50 2,00 1,50 1,00 0,50 0, Source: Matkailu ja työllisyys Tampereen seutukunnassa vuonna 2012 Overnight stays by domestic travellers in the Tampere Region (million travellers per year) Current Nykytila state 2040 basic perus 2040 airport lento Income flow from the overnight stays by domestic travelers ( million per year) 0 Current Nykytila state 2040 perus basic 2040 airport lento

70 Results Income gained from daily shopping 71 Current state - During the peak hour, 1,880 long-distance train passengers (10% of the number of daily passengers) - They spend 16 euros on daily shopping on their trip long-distance bus passengers - They spend 12 euros on daily shopping on their trip - The annual income flow: 16 million euros Basic scenario During the peak hour, 2,000 long-distance train passengers - During the peak hour, 1,580 commuter train passengers long-distance bus passengers - Income flow in 2040: 26 million euros International airport scenario For the part of daily shopping, the increase in the income flow will comply with the basic scenario 2040 Regional travellers daily consumer goods specialty shops restaurants/cafés Train travellers daily consumer goods specialty shops restaurants/cafés Tampere Travel and Service Centre Spending by visitors /day /day The spending by the visitors has been calculated as shopping during one day. i.e., their consumption at the Travel and Service Centre during their trips. 11,86 5,05 3,86 2,95 16,08 3,37 3,86 8,85 Average value of daily consumer goods 21,90 Source: Santasalo, PTY

71 4.3 Ecosystem effects in the basic and airport scenarios

72 M M Comparison of the ecosystem effects in the two scenarios Retail Offices Housing Retail Offices Housing Basic scenario Value creation Value appropriation Airport scenario Housing Asuminen Retail Liiketilat Offices Toimistot Asuminen Housing Liiketilat Retail Toimistot Offices

73 Ecosystem effects in the airport scenario Offices Value creation + 29% Value appropriation + 34% Retail Value creation + 18% Value appropriation + 488% Housing Value creation + 9% Value appropriation + 33% The changes in the ecosystem effects for the part of offices when more international companies are located in the area (the rent and yield levels in Ruoholahti, Helsinki, Catella 2017) A 29% increase in value creation (a total of 6,603 million euros) The yield will decrease by 1.25 percentage points The rent will increase by 4.5% The share of the rent out of the turnover will decrease by 0.25 percentage points Value appropriation will increase by 34% (a total of 929 million euros) The changes in the ecosystem effects for the part of retail premises, taking into account the increased traffic flows and demand due to the Tampere international airport Value creation will increase by 18% (a total of 1,303 million euros) The share of services out of the retail premises will increase to 45% and the average rent level will increase by 20% Value appropriation will increase by 488% (a total of 294 million euros) The growing traffic flows will considerably increase the profit margins of the service entrepreneurs operating at the retail premises The changes in the ecosystem effects when the residents average income is 33% higher (Statistics Finland) Value creation will increase by 9% (a total of 2,507 million euros) Imputed rent will be the same as in the basic scenario The occupancy rate will improve by one third Less people will move to the area Value appropriation will increase by 33% (a total of 500 million euros)

74 Ecosystem effects in the basic scenario / year OFFICES 325 MILLION HOUSING 64 MILLION RETAIL 72 MILLION The ecosystem effects are partly overlapping

75 OFFICES 325 MILLION HOUSING 64 MILLION RETAIL 72 MILLION DAILY SHOPPING 10 MILLION The ecosystem effects during the first year of use, compared with the increase in the tourism income and daily shopping with respect to the current state FOREIGN TOURISM INCOME 47 MILLION DOMESTIC TOURISM INCOME 280 MILLION

76 Ecosystem effects in the international airport scenario /year OFFICES 362 MILLION HOUSING 69 MILLION RETAIL 85 MILLION Ecosystem effects in the airport scenario

77 OFFICES 362 MILLION HOUSING 69 MILLION RETAIL 85 MILLION DAILY SHOPPING 10 MILLION In the airport scenario, the foreign tourism income will increase vigorously FOREIGN TOURISM INCOME 168 MILLION DOMESTIC TOURISM INCOME 280 MILLION

78 5. Conclusions and recommendations

79 Management of the economic impacts caused by flows of people Superior geographical location Unused potential Along with the higher speeds in the railway traffic, the population that can be reached within 1 h 30 min will almost triple (~1 million => ~3 million) Almost 4 million inhabitants within a 2-hour travel time (about 70% of Finland s population in 2030) Tampere may function as an engine for a larger geographic area than today Tampere will benefit the most due to its location at the hub of the increasing traffic flows Tampere Airport is a great opportunity Tampere Airport may significantly increase the interest of international companies and passengers in the area Connecting the airport s terminal services to the Travel and Service Centre s room programme is a great opportunity for the project Increasing the economic value of tourism Tourism is a multi-billion business. In 2016, foreign tourists brought 3.9 billion euros to Finland. The better accessibility, service product and communication, the larger share of international tourism for the Tampere region and Inland Finland Along with direct flights, Tampere could be a gateway to the Tampere Region, Southern Ostrobothnia, Central Finland, Satakunta Region and to the Kanta-Häme Region and make long weekends in Europe possible

80 Making the Travel and Service Centre part of the international travel chain In the future, a significant share of the Tampere Airport passengers could arrive and depart by train via the Tampere Travel and Service Centre. Current airport terminal functions could be carried out at the Travel and Service Centre, which will also provide a wide range of commercial services. A fast connection to the airport would provide a seamless travel chain. Compared with the current operating method, a considerable amount of time would be saved and the travel chain would comply with sustainable development. It is recommended that the airport terminal be made a stronger part of the concept and room programme of the Travel and Service Centre, incorporating internationality into its image. City centre of Tampere = AiRRport City 81 Banks of the rapids Cathedral Tammelantori market pace Tammela Stadium Department store Square Theater Stadium = Shopping centre = Deck and Central Arena = Hotel Shopping center University Tampere Hall Hotel Fairs/APM

81 Management of the ecosystem effects A vibrant city: a larger part of the residents purchasing power will remain in the area and the area will be attractive Development of a unified commercial or shopping centre concept focus on the Travel Centre What combination of services (private and public) and shops will support the lives of the residents and the travellers? Development of the services of a sharing economy A larger part of the income will no more be spent on housing, but it will be consumed locally A possible effect on the occupancy rate and the number of residents Preparations for the development of the airport Will it attract better companies? Will it attract residents from outside Tampere and from abroad? Development of the Travel Centre as a private project

82 Management of the ecosystem effects 83 The price of the land and the requirements set by construction are important tools for the City of Tampere Is the intention to optimise the price of the building rights or the functionality of the ecosystem? Business Tampere is a central actor in the management of the ecosystem (a lifecycle manager) Are there clear targets in the management of the ecosystem the preparations and the lifecycle? Identifying and activating the interested parties (cf. business improvement districts in England) The ecosystem approach emphasises the area s ability to adapt to the requirements of the future: adaptability Not all effects are new Tampere - Tampere Region - Finland - the rest of the world

83 Sources

84 Sources Interviewee Kusti Kajander, Boost Brothers Matti Sivunen, Boost Brothers Janne Mäkelä, Newsec Antti Louko, Catella Ken Dooley, Granlund Karoliina Rajakallio, Helsinki City Transport HKL Wisa Majamaa, ICECAPITAL Miro Ristimäki, Skanska Kalle Jokela, Skanska Matti Christersson, CBRE Subject Development of construction costs Alternative implementation methods Investors interest Investors interest New services of a sharing economy Development of stations Attractiveness of the area for housing investors Investment calculation, urban development The concept of retail premises Investors interest

85 Sources (others than those mentioned in the context) Realprojekti (10 September 2015) Tampere Travel and Service Centre. Commercial Analysis Newsec (9 October 2015) Tampere Travel and Service Centre. Assessment of the financial conditions for implementation and the commercial concept Deloitte (9/2015) Kansi- ja areenahankkeen yhteiskuntataloudellinen vaikutusanalyysi Catella (spring 2017) Catella Market Indicator Finland Newsec (spring 2017) Newsec Property Outlook Finland Cobe Architects (4/2017) Tampere Travel and Service Centre: Development scenarios Statistics Finland (2017) Household Budget Survey

86 Workgroup: Jorma Mäntynen, Professor, WSP Seppo Junnila, Professor, Aalto University Lauri Pulkka, D.Sc. (Tech.), Aalto University Pasi Metsäpuro, M.Sc. (Tech.), WSP Tuomas Santasalo, M.Sc. (Econ.), WSP Terhi Tikkanen-Lindström, Architect, WSP Translation by Translatinki Oy