Many cities are looking for revenue from the sale of social and healthcare properties – Heinola just closed a deal worth over 10 million

Municipal leaders are considering what should actually be done with social and healthcare real estate when the welfare regions start at the beginning of next year.

Exterior view of the entrance to the Heinola health center.  In the foreground, a yellow flower arrangement.
The City of Heinola also receives land rental income in addition to the income from the sale of the health centre.

Many municipalities or cities have sought to dispose of their social welfare properties before the new welfare districts start at the beginning of next year.

Heinola has just completed the sale of its health centre and the Hopeasilla elderly services centre. The city will receive more than €10 million from them.

Responsibility for organising social welfare services will be transferred to the welfare regions at the beginning of next year.

Tilakeskus does not keep statistics on how much municipalities or cities have sold their social security properties to, for example, private entities.

Large cities in particular have sold their properties. Real estate expert JLL estimated in May that deals have been made in the last couple of years for 700 million euros.¨

According to the municipal association, the largest municipalities and growth centers have the best conditions for selling social security properties. The willingness to sell has not been a surprise and many municipalities want to release capital committed to social security and sports properties for other uses.

Rent levels contained for a few years

The social security properties in Heinola were sold to domestic companies KOY Terveydenhuolto’s premises IV and Suomen Hoiva ja Asunto Oy.

Some properties are certainly of interest to international investors as well. Ending up with foreign ownership can be a risk from the point of view of security of supply.

Heinola mayor Jari Parkkonen in close-up.  A bald man with a beard is looking at the camera.  Standing in the conference room.
Heinola Mayor Jari Parkkonen says that the proceeds from the sale can be used for investments, for example, and avoid the need for additional borrowing.

The rent level has also been curbed by the government decree.

– You can’t pick rent at the drop of a hat, adds Parkkonen.

In the spring, the State Council issued a decree for the next three years on the premises rented by municipalities for welfare areas. After that, the district has the right to extend the lease by another year.

After the transition period, the contract can also be terminated.

In Päijät-Hämee, in addition to Heinola, Lahti and Hollola have also sold their social security properties to private ownership.

– In the city, we have been very precise regarding the lease agreement, that it complies with the regulation, that we do not cause an additional burden on the welfare group, says Heinola’s city manager Parkkonen.

Heinola is still negotiating with the welfare district about the sale of the rescue station. The city plans to use the money received from real estate transactions for its investments, among other things.