At its meeting on 1 November 2023, the Lappeenranta Urban Development Committee approved a total investment proposal of EUR 15 million for the design and construction of the Pajarila and Mustola street network in Lappeenranta, Finland. This investment is to be included in the budget for 2024-2030 and is intended to increase the number of industrial plots in the areas.
- It is important for the city's vitality and business attractiveness that there is a sufficient variety of industrial sites and plots available, says Pasi Leimi, Director of the Department of Urban Development in the City of Lappeenranta and rapporteur for the proposal.
- Companies' decisions to locate in the city are strongly influenced by the availability of land in the city.
At present, the city of Lappeenranta has a demand for large, contiguous areas of more than 10 hectares with municipal services, but no plots of more than 20 hectares are available at all. There are currently 12 vacant industrial plots suitable for development in different parts of the city.
Leimi says that the city is planning two larger industrial estates: the Pajarila and Mustola areas.
- The sites are partly extensions of existing industrial sites and both have existing sub-plans.
- However, the current budget for infrastructure investment will not be sufficient to build large-scale facilities - such as the road network in the Pajarila expansion area or the rail and other infrastructure needed for the Mustola logistics and business park- and additional funding is therefore needed.
The western part of the Pajarila extension area has an existing zoning plan, while the eastern part of the city-owned areas is currently undergoing zoning. In the Pajarila extension area, the city owns about 65% of the land. In the Mustola area, the city owns about 80 % of the land. Calculations of the costs of infrastructure planning and construction are presented to the Urban Development Committee. Energy company Lappeenrannan Energia is involved in the project.
The plan is to have 77 hectares suitable for industry, 7.2 hectares for retail and 33 hectares for business premises in the Pajarila extension area. For the Mustola extension, 150 hectares are planned for industry and 10 hectares for business premises.
- The final number of plots will of course depend on the zoning solution, plot configuration and the needs of the operators," Mr Leimi said.
- The plots will be completed in stages, with large-scale land available from 2030 onwards.
The estimated sales price of the plots in the Pajarila extension is around EUR 17.3 million and the estimated sales price of the plots in the Mustola extension is around EUR 17 million.
- These sales prices will be realised mainly after 2030, when the streets and other utilities have been built and the plots can be handed over, says Pasi Leimi.
- Only about 20% of industrial land is usually sold, so most industrial land is rented out and the proceeds are then lost. The land rent on the land is 5% of the sale price and the land rent is paid steadily over decades.
Planning will be pursued for the Pajarila and Mustola expansion areas in parallel. Implementation will start with the construction of the Pajarila road. Pajarila will generate more income and plots will be available more quickly, thanks to the input-output ratio. Mustola is a larger area than Pajarila, but it is almost exclusively industrial plots.
The investment funding of Lappeenranta Energy Networks and the City of Lappeenranta is not sufficient to promote both expansion areas at the same time, but implementation must be done in stages. The promotion of the Pajarila area has been prioritised first.
Pasi Leimi, Director of Vitality and Urban Development
tel. +358 40 740 1643, pasi.leimi@lappeenranta.fi
Riitta Ruutiainen, City Surveyor
tel. +358 40 718 0954, riitta.ruutiainen@lappeenranta.fi
Sanni Simonen, Production Manager (available from 30 October)
tel. 040 158 2832, sanni.simonen@lappeenranta.fi