Kotka Old Port enters its construction phase
The redevelopment of Kotka Kantasatama Harbour took a big step forward with the initiation of construction work on the plot. The extensive Kotka Old Port project is a public-private partnership involving GVA Sawyer (Project developer and an international expert in real estate and regional development) representing the private sector, the City of Kotka as the municipality and Cursor, the regional development company for Kotka-Hamina.
The construction phase of Kotka Old Port Project located in Kantasatama Harbour began on 12 September 2017. This marks an important milestone in the Project. The ground lease agreement, concluded with the City of Kotka on 14 August for 50 years, calls for the construction of 20,000 m2 of retail spaceas the first phase of the outlet component of the Project. Other players involved include London-based real estate finance experts PCPE, retail developer Milligan Retail, Italian fashion retail experts DEA Real Estate, based in Milan, and other international partners.
“We are pleased to be at a stage where everyone can see the project moving forward. Years of work on design, engineering, marketing, leasing, market research, official permissions have now finally led to the stage of physical works which everyone can see,” rejoices Cameron Sawyer, Chairperson of the Board of GVA Sawyer and head of the Kotka Old Port project.
An injection of new life into Kotka
The redevelopment will completely reform the city by re-integrating the disused historic port into the urban fabric of the city and giving back to the citizens the historic waterfront – since 2001 behind ISPS fences and not accessible to people. New businesses in the Project will bring jobs to the area, and the large influx of visitors will give a boost to all local businesses. The commercial elements of the Old Port Project will work hand-in-glove with public sector elements such as the new campus of the South-Eastern Finland University of Applied Sciences (XAMK) which will be built in the Southern part of the Old Port Project, bringing about 3,000 students to the area by 2020. Moreover, the City of Kotka will construct a brand new 8,000-m2 events and sports arenain the Old Port Project, adjacent to the new XAMK campus, making the city a central contributor to the Project.
Kotka Old Port is a multifunctional destination offering experiences for local, national and international visitors. It comprises a wealth of leisure-oriented businesses and services as well as cultural activities; an outlet village, hotels, marina, Finland’s first street food market and other restaurants among them. At a later stage, Kotka Old Port will house a residential area with a waterfront boulevard. The Old Port Outlet, with its urban setting and rich variety of entertainment and opportunities for various types of experiences, represents a new direction in the concept of physical shopping centers which complements, rather than competing with rising online retailing.
The surface area of the Kotka Old Project is about 20 ha. The significance of the project for the Kotka economy is enormous as the demolition and construction work alone employs a hundred people. According to an estimate by Oxford Research Oy, the event centre alone will create 440 new jobs in the area over a four-year period and the outlet centre will create 710 direct jobs. The development of the Old Port Project will boost trade within the entire Kymenlaakso region.
The locationon the modern E18 highway between Helsinki and St. Petersburg is easily reachable by car or bus from Helsinki (only 75 minutes driving), and to the millions of Russians who travel to Southeast Finland using the E18.
International cruise ship operations were launched in Kotka and Hamina in 2017 as a result of a cooperation project between the two cities, the HaminaKotka Harbour and the development company Cursor Oy. Already in 2017, four cruise ships have visited Kotka. New businesses are expected to add to the number of tourists: by 2020, the goal is to have 15–20 cruise ships or 30,000 cruise guests to Kotka. Services in the Harbour area must be able to meet the quality and volume needs created by the tourist flows. Upcoming services, the outlet village in particular, have been important components when selling Cruise Port Kotka to cruise companies.
“Cruise guests will introduce their own element and purchase potential to Kantasatama Harbour, although they will of course spread out to the city and the rest of the region too,” explains Henry Lindelöf, the Mayor of Kotka.
“Currently, we are also working on a ferry connection between St. Petersburg and Kotka which would make shopping easier than ever for Russian visitors. In the Baltic Sea region, for example, there is not a single port with an outlet shopping centre,” Sawyer points out. “Moreover, Kotka Old Port is only an hour's bus drive away from the Helsinki-Vantaa Airport, which is one of Europe’s most important transit hubs for Asian travellers. This makes it easy to bring Chinese and other Asian travellers to Kotka as part of the StopOver Finland programme. We are actively creating partnerships with Chinese travel agencies that show interest in organising shopping holidays to Kotka.”
All in all, the new shopping and recreational opportunities are expected to draw a significant number of both international and domestic guests to the area.
Outlet village to house top fashion and lifestyle brands
Dozens of well-known brands have already confirmed their presence in Finland's first outlet village.The urban setting and rich destination elements of the Old Port Outlet, as well as the total lack of any modern outlet shopping in the country, have generated a lot of domestic and international interest in the Project among potential tenants. Traders find the area, which is scenic and urban at the same time, and its growing tourist flows, major pull factors. Several exclusive Italian brands, including Missoni, Versace Jeans, Genny, Loriblu, Basile, Marville, John Ashfield, Caleffi, Sicilia’s Italian Restaurant, Baldinini, Cavalli Class and Luxury Zone, confirmed earlier this year that they will open in the outlet village, and there are many more luxury brands showing similar interest. Negotiations with many Finnish and international brands are well underway. The first phase of construction will be completed by the end of 2019 with the opening of 80–90 stores and some restaurantsand the first hotel.
Parties to the project
The Kotka Old Port project involves a number of partners. The project leader is the real estate company GVA Sawyer with its 20 years of experience in real estate projects. The British PCPE investment company has financed numerous real estate projects in Finland and Europe. Milligan Retail, also based in the UK, takes part in development and concept creation. Premises leasing is managed by DEA Real Estate from Italy, which also acts as a consultant in other parts of the project. City of Kotka is closely involved in the project, and Cursor, the regional development company for Kotka-Hamina, acts as the project coordinator.