Tuesday 27 May 2008

Bank Of Finland: Real Estate Speculator?



1- "Bank of Finland to sell rental housing property to SATO. The Bank of Finland has sold its property on Snellmaninkatu consisting of rental accommodation, to the real estate company SATO. The sale price was approximately EUR 10 million.

The oldest section of the building complex dates from 1896 and it was extended in 1988. The premises include 48 flats of an average 54 square meters. The existing residents' rental agreements will be valid until further notice. The house also contains meeting and leisure facilities which the Bank of Finland will rent from SATO.

The Bank of Finland decided to give up the property due to the impending renovation requirements and maintenance costs. The Bank no longer considers the upkeep of residential property to belong to its tasks and has already sold similar property in the recent past."


2- "Bank of Finland to sell commercial building plot to YIT ConstructionToday, 26 May 2008, the Bank of Finland and YIT Construction Ltd have signed a preliminary real estate agreement on the sale by the Bank to YIT of a section of a plot of land zoned for commercial development in the Viinikkala district of Vantaa.
The plot lies along the outer ring road (Ring III) beside the grounds of Helsinki-Vantaa airport, and YIT is planning to build a logistics centre on the site. "

Sometime you wonder, if there is some conflict of interest in the real estate market. Why on earth Bank of finland had invested in Flats if not to get fat profit from it. I think you start to understand why the market is not healthy, especially when the lesson giver are the one that speculate on large scale...

9 comments:

Anonymous said...

To my opinion, they are giving a clear message to rich investors to get out before a big housing crash happen.

It's not fair for the common people as they should have been warned few years ago...but BOF couldn't raise interest rates as it is now the job of the ECB...

HousingFinland said...

10 million / 48 = 200.000 euro for flat located in city center and at about 58 m2...

I think Sato got it very cheap..maybe it's a way to bail out SATO , same for YIT

Now let's see if rent provided by SATO will be lower then the competitor...

Anonymous said...

Is BOF public or private?

HousingFinland said...

"The Bank of Finland is Finland's central bank and a member of the Eurosystem

The Bank of Finland acts as Finland's central bank, national monetary authority and member of the European System of central banks and the Eurosystem. "

So I guess, it's public...

Anonymous said...

why didn't they put those flat on the public market??

Anonymous said...

Snellmaninkatu is in kruununhaka :
http://maps.google.com/maps?f=q&hl=en&geocode=&q=Snellmaninkatu+helsinki&sll=37.0625,-95.677068&sspn=51.089971,64.160156&ie=UTF8&ll=60.172304,24.953239&spn=0.031634,0.062656&z=14

Anonymous said...

Most of European central banks are private:

Deutsche Bundesbank owns 20 percent of BCE
Banque de France 14 percent
Banca d'Italia 12 percent
etc...

and they control the BCE, that defacto is private too.
BCE institution is completely independent from any elected political person.

So...I have some doubt that BOF is public.

Think what a conflict of interests!

HousingFinland said...

What about that?:

"Bank of Finland to transfer EUR 250 million to the State"

"The Parliamentary Supervisory Council has confirmed the Bank of Finland’s financial statements for 2007. Upon the proposal of the Bank of Finland Board, the Parliamentary Supervisory Council decided that EUR 250 million of the profit of EUR 410 million be transferred to the State. In the previous year, the Bank transferred EUR 186 million to the State out of its profit of EUR 293 million."

http://www.bof.fi/en/suomen_pankki/ajankohtaista/tiedotteet/2008/tiedote13_2008.htm

For sure it's independent of any government, think Trichet kept repeating it after French president Sarkozy attacked the ECB on its interest rates policy and a strong euro, so no doubt about.

But it is not private..

Anonymous said...

The general pattern elsewhere is that the central bank is owned by the most important banks it regulates. So if a member bank gets into trouble the central bank steps in to bail it out. Some profits get passed back to the government but losses tend to be passed onto the public. Governers tend to be selected from the list that is provided to the government by the bankers

That seems to be the system elsewhere. Finland might be different but given the long term relationships with Sweden you would have to wonder.

I know from talking to people down the pub that small buisiness people are very bitter about banks in this country because when the banks needed the money they crushed the viable buisinesses by asking for the money back to save the banks.

Bankers now tell me that it wont happen again because Finland is in the Euro zone.

But the pattern of recent months suggests that banks rescue themselves first and then rebuild their balance sheets first and then if you are lucky you can get a loan from them at some later point.

This seems to be the way the world has been since the dawn of time so i guess it is just the way it is.

It could be worse.