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by Sven Triloqvist
Malls are big business in Finland, as elsewhere. Most have been developed by Finnish construction companies and then sold to real estate investors or operators. The profits are now seeping into Finnish politics.
An entertaining scandal awaits below the fold. At the end of the diary, there is more business information and less comedy, for those who want to mall over more serious matters. diary requested by DoDo...
A group of well-heeled businessmen control `an association for developing communities in Finland'. That association gave a total of 50,000 to various candidates in the last General Election. The PM, for instance, got 10k. The 'donations' went to leading figures in the Centre Party, The National Coalition and the Social Democrats. All of these since-elected politicians now claim to have known nothing about the people behind the association.
The scandal came to light because another elected MP, and secretary of the Centre Party, 'forgot' to declare the origin of his donations from this association. One of the key movers/funders behind the association is a Mr Sugary (not his real name, but close to it) - a man who made billions selling crappy cheap furniture all over Finland, by using crappy TV ads that featured, for example, buxom scantily dressed bimbos playing phalluses with electric drills. Huge signs float outside the stores - `'Good people, why pay more?' That business is worth 100 M. is all owned by Mr Sugary. Mr S was not very good at school, but his life changed when he was given 20 pigs to look after at age 15. He's never looked back, and the average shape and colour of his customers seem to indicate that he still serves the same species. The man is a monster of bad taste, so it is little wonder that he was literally stabbed in the back, round Christmas, by one of his business partners, after a heavy boozing session at his dacha. They were not even bright enough to claim that the catastrophic collapse of one of their dining chairs (rustic table and 6 chairs, 109), caused the business partner to tip violently against his host at the dinner holding a steak knife, while the host was turned to his wife on the other side, worried that she was in difficulties as her face had slumped into a large tureen of Koskenkorva. No, they didn't claim that. Anyway, the recent flight of kitsch fancy that our entrepreneur cooked up is a super mall with outdoors indoors (if you see what I mean) and specially built olde worlde nests of alleyways hired out to crafts people. Mr S owns 200 M of it. It's the idea of an 'experience' shopping centre. They also planned to have a system, run by the Finnish Post Office, such that your purchased goods were whisked away to be collected at the exit to the car park. Thus, in theory, happy shoppers would shop on, undeterred by the mounting physical evidence of their consumerism that they would have to push round all the wonderful 'experiences'. This is called an Ideapark. It professes green values, responsibiity to the community and to existing local shopkeepers - professes, but ignores, and the principle idea in this park is an advanced method of parting people from their money. I have some knowledge of all these things because I was peripherally involved in the project at its earliest stages, before Mr Phallic&Decker came in with elusive spondulex. At which point I and several other consultants left. I admit with shame to getting involved, but the guy who came up with the concept was a nice guy and his green/caring spiel was believable. So here's the twist. Mr IdeaPark wants to build another of these countryside-wrecking monsters (and I can now see that they are) in Vihti - very close to an old wooden house I once lived in. It is a beautiful area. Many politicians are against the project and the Environment Minister has consistently refused to give planning permission. However just before the scandal broke, the PM came out in favour of the Vihti IdeaPark, saying that it would bring much-needed service jobs to the area. Wel, well, well. He gets 10k for his election campaign from an association funded by Mr IdeaPark, and then involves himself, unusually for a PM, in a planning application. Since I wrote the original longish text above in another diary, the scandal has been further illuminated. The environment minister has officially denied planning permission to the Vihti Ideapark, the PM has called for reform in political donations (well he would, wouldn't he), and several other elected members have hurried to clarify the sources of their donations. It is not over by a long chalk. I expect other little titillating revelations, further embarrassment and, eventually, a new Law. Finally, a bit of shop till you drop history. The first department store was Stockmann, established in 1862. It was a family company - a German family originally from Lübeck. It is still there today, the largest department store in the Nordics and still expanding. Stockmann also owns the Seppälä fashion store chain, and Hobby Hall, the largest e-commerce and mail order business in Finland. There are Stockmann department stores in several of the main Finnish cities, and also in Tallin, Riga and Moscow. The other large stores in Finland traditionally have been allied to one of the two big industrial banks in Finland - SYP and KOP, or then to Leftist cooperatives. The rapid expansion of competitive merchant banking by other groups that preceded and contributed to the financial crisis of the early Nineties changed all this. The first big development was Itäkeskus in 1984. This huge shopping center lies to the east of the capital, standing on the Metro line. It is the largest covered mall in the Nordic countries. 300 shops and restaurants. 2000 employed. The core building, before expansion, was designed by architect Erkki Kairamo, partner of my ex father-in-law, and brother of the visionary Kari Kairamo, the CEO who turned Nokia's focus to mobile devices. The original core building was financed by the SKOP bank, which ended up in the hands of the government after the financial crisis of 1991. Further expansion was completed by 2001 and then sold in 2002 to the Dutch group Wereldhave. Iso Omena - (Big Apple). Opened 2001. Situated on the Western exit from the capital just beyond the HQ of Nokia. Owned by large Finnish store operator CityCon (60%) and GIC Real Estate - a Singapore-based Sovereign Fund that operates globally. Jumbo is Finland's second largest shopping centre, located on Ring Road 3 to the north of the capital. Half of the GLA (Gross Lettable Area) has now been acquired by Rodamco Europe (Property portfolio 25 B) Two large supermarkets are owner-occupiers outside of the deal. The rest of the GLA is held by the Finnish pension fund Fennia. Kamppi is a large mall in downtown Helsinki that includes the main underground bus station. It was developed by Finnish construction company SRV and Finnish investment and development company Pontos, then sold on to Boultbee (3 B portfolio) and the Royal Bank of Scotland, and finally purchased by Protego Nordic Retail Fund - an LLP! (managing 2 B of assets). The first thing the second owners asked was whether they could get rid of the underground bus station and have more shops. Idiots. The buses bring up to 150,000 people a day up through the mall. I confess to have been involved at the development stage on branding, but the relationship ended in legal recriminations ;-) Skanssi is a much smaller mall and residential development on the edge of Turku to open in 2009. The development was conceived by a young dining friend of mine who took over the family construction company and brought it into the 3rd millennium with new logistics planning that brought materials onsite according to JIT principles. (Just In Time). The company is a smaller player, but I think they have done excellent and responsible development. Skanssi was conceived as a human scale mall closely surrounded by a large residential area, with small `local' shops built into the ground floor of many of the apartment buildings. The point was to integrate the mall into the community. Sadly, but inevitably, the concept was purchased in 2007 by pure Finnish CapMan (capital 3 B) who describe themselves somewhat strangely as `the leading alternative asset managers in the Nordic countries'. Tokmanni (a jokey version of the Stockmann name) is a discount store chain owned by a friend and fellow conspirator of Mr S in `community development'. Tokmanni has 133 cheapo stores all over Finland and net sales of 518 M in 2007. The fact that CapMan has invested in both Skanssi and Tokmanni, and the existence of a close relationship with Ideapark's Mr Sugary leads me to wonder how they are going to get together. I confess to regularly buying T-shirts from one of their cheapo stores.
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They Paved Paradise | 26 comments (26 topical, 0 editorial, 0 hidden)
They Paved Paradise | 26 comments (26 topical, 0 editorial, 0 hidden)
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