Tuesday, 15 September 2026
Helsinki’s office market is producing an increasingly unusual contradiction. Companies are competing for good workspace and investors remain interested in high-quality office property, yet a substantial amount of existing space across the metropolitan area remains vacant. The explanation is becoming clearer. Helsinki does not simply have too much office space. It has a growing mismatch between the buildings available and the buildings that today’s occupiers actually want.
Vacancy across the Helsinki Metropolitan Area has reached approximately 15.3%, according to Newsec, but the picture changes dramatically at the top of the market. Among the highest-quality offices in Helsinki’s central business district, vacancy has been measured at only around 5.8%. The difference suggests that the metropolitan vacancy figure increasingly combines two very different markets. Modern, efficient and well-located offices can attract tenants, while substantial quantities of older or less competitive space struggle to participate in that demand.
Companies have changed the way they use their workplaces. Hybrid working has allowed many businesses to reduce their overall space requirements, but it has not eliminated the office. Instead, employers are becoming more selective about the space they retain. That puts greater emphasis on accessibility, public transport, energy performance, services, meeting facilities and the overall working environment. A company occupying fewer square metres can potentially afford to concentrate its employees in a better building.
For owners of secondary offices, this creates a difficult problem. Cutting rents may attract some tenants, but price alone cannot correct poor accessibility, inefficient layouts, outdated technical systems or high operating costs.
The investment market shows a similar pattern. Approximately €122 million was invested in Finnish office property during the second quarter of 2026. Over the preceding 12 months, office transaction volume reached approximately €357 million, representing a decline of around 24% compared with the previous year. Pricing continues to distinguish sharply between Helsinki’s strongest locations and other established office districts. Prime CBD yields were around 5.50% during the second quarter, compared with approximately 6.25% in Pasila, Ruoholahti and Keilaniemi.
But yields tell only part of the story. An investor considering a modern building with strong tenants can make relatively conventional assumptions about rent, occupancy and future income. Buying a partially empty secondary office requiring extensive refurbishment is an entirely different investment.
The acquisition price may look attractive after the correction in Finnish property values, but the purchase is only the beginning. Older buildings can require significant expenditure on heating, cooling, ventilation, façades, energy efficiency, lifts, common areas and tenant facilities before they can compete with newer stock. There may then be additional costs associated with leasing incentives and periods without rental income while the property is repositioned.
That means Helsinki’s secondary office market ultimately has to answer a financial question: how far must the purchase price fall before the cost of modernising an older building becomes economically worthwhile?
For some properties, that calculation will eventually work. A building in a good location with a flexible structure may offer an attractive opportunity once its acquisition price reflects the required capital expenditure and leasing risk. Investors willing to undertake substantial refurbishment could then return the property to the competitive office market.
For other buildings, the numbers may never work as offices. This is where Helsinki’s growing experience with conversions becomes increasingly relevant.
The city has already enabled significant quantities of former commercial property to move into residential use. Planning changes since 2015 have facilitated roughly 200,000 sqm of new residential space, with former offices forming part of that transformation. The process is changing entire districts rather than only individual properties.
Ilmala, for example, is gradually moving away from its traditional character as a predominantly employment-focused area. Former commercial plots are being considered for housing and mixed development as Helsinki seeks to introduce more residents and services into areas previously dominated by offices. Lauttasaari has also demonstrated how obsolete commercial property can be redirected towards housing and other uses when continued office operation no longer makes sense.
The opportunity is significant because conversion can solve two urban problems simultaneously. Helsinki needs additional housing, while parts of its existing office stock are experiencing persistent vacancy. Yet converting offices into apartments is far from straightforward.
Buildings designed for large workplaces can have deep floorplates that make residential layouts difficult. Apartments need appropriate daylight, ventilation, entrances, bathrooms and services. Structural columns and existing cores can restrict layouts, while façades may require substantial alteration. A property that appears suitable for housing when viewed from the street can therefore prove prohibitively expensive once its structure is examined.
Other uses could provide alternatives. Student accommodation, hotels, healthcare facilities and serviced apartments may work in some locations. But these options also depend on local demand, building configuration and planning.
Helsinki is consequently developing a category of property for which there is no simple solution. These are buildings that struggle to attract office tenants, require too much investment to compete with modern stock and are difficult to convert economically into another use.
For some, the long-term answer may be redevelopment. Once the income value of an existing office falls sufficiently, the value of the underlying land and its redevelopment potential can become more important than preserving the building itself. Demolition followed by residential or mixed-use construction may then become the most rational outcome, particularly where municipalities are prepared to alter planning regulations.
This could gradually transform parts of Helsinki, Espoo and Vantaa. Business districts created during previous development cycles were often designed around large concentrations of office employment. If companies permanently require less space, some of these areas may eventually need more housing, services and other activities to remain economically active throughout the day.
Transport connections will play an important role in determining which districts adapt successfully. Properties close to metro and railway stations may have greater potential because they remain attractive to both occupiers and alternative uses. Buildings in isolated business parks with weaker public transport could face a more difficult adjustment.
The same distinction applies at building level. Helsinki’s office stock can increasingly be divided into several categories. There are competitive buildings capable of attracting tenants without major intervention. There are properties that can remain offices after significant modernisation. There are buildings where conversion offers a more convincing future. And there are properties where the existing structure may eventually be worth less than the redevelopment opportunity underneath it.
These categories are not permanent. A property that is currently too expensive to refurbish can become viable if its purchase price falls. A conversion that does not work under existing planning rules can become possible following a change of use. A poorly performing site can gain value if surrounding infrastructure or transport connections improve.
This helps explain why high vacancy has not automatically produced a rush of investment into discounted Helsinki offices. Cheap property is not necessarily attractive property. An investor buying secondary office space must effectively purchase both the existing building and the problem attached to it. The discount therefore needs to be large enough to finance the solution.
The Helsinki office market is consequently moving beyond a conventional cycle of falling occupancy followed by eventual recovery. Demand is returning selectively rather than evenly. Better buildings are capturing tenants while weaker properties risk remaining vacant even as leasing conditions improve elsewhere.
The next stage will therefore be less about predicting when metropolitan vacancy starts falling and more about determining how much of today’s vacant stock should continue functioning as offices. Helsinki still has a healthy market for buildings that companies genuinely want to occupy and investors are prepared to own. Its much bigger challenge is deciding what to do with the buildings that no longer fit either requirement.
Source: CIJ.World Research & Analysis Team
