Smart Biz City: Ülemiste City to swap local mud for global IT map

Photo: Erik Prozes

Last week saw roof truss wreath ceremony at 14th floor of tallest building in Estonia’s top innovative business quarters of Ülemiste City. Two office buildings of the same size are to be build soon.

Meanwhile, the Bengaluru, India born rising IT star Kumar Laxman stands on the slippery sidewalk at Ülemiste train stop, balancing on the dirt-black ice and dripping with mud.

Kumar is here, in a leading Estonian IT-company, building an uninterrupted processes programme as ordered by an international technology group. Cooperation with Estonians runs smooth, he’s paid well, and recently Kumar was offered extension of contract.

Muddy Tallinn Waters

Muddy waters are dripping out of Mr Kumar’s raven-black hair, running down the freshly ironed pink shirt as seeking their way towards the ground, ending up in pants mid-way. Five minutes ago, Kumar left the Fahle restaurant after meeting a head-hunter working for a Hong-Kong programming group.

Despite the delicious dinner menu on offer at Ülemiste City eateries, Kumar preferred to meet the influential recruiter elsewhere, to avoid explanations to colleagues or – worse yet – his control-freak boss.

But the Fahle house on Sossimäe was as far as he wanted to venture, due to an embarrassing talk to the company chief just recently. A week ago, during the lunch hour, Kumar run to city centre laundry house to get his shirts, and was a bit late coming back. At that, the Estonian took diligent care to underline how well the Indian was working, while stressing – as he shook his head – how much Kumar is paid for each and every minute on the job.

Now, frozen as a pillar of salt, Kumar is staring at the cherry red Audi 100 driving into the distance... the one that went thru the pool of mud in such an undisturbed forget-the-brakes manner. The thought of continuing the career in Hong-Kong just got itself some extra lure.

Well Kumar Laxman is fiction but for the very sake of drawing folks like him they are building this Ülemiste City. The mud splashed from holey streets of Tallinn, however, is even too real.

From the roof of the 14-floor office building, how breathtaking the view on Tallinn. From such heights, one grasps the grandeur of the task tackled by the developer, Technopolis Ülemiste AS, untouched and unmoved by the tragedy of a pedestrian drowning in the mud below.

The company, 51 percent held by Finnish listed company Technopolis Plc, intends to complete a third of the 35 hectare Ülemiste City business quarters near Tallinn Airport, and that with mainly the international IT-groups in view.

Meanwhile, however, there are the totally traditional enterprises to be found in the area – such as handle scrap iron or twist pipes and prefer to rent offices someplace totally else.

OÜ GPB, one to manufacture ventilation devices, has been doing business on the one-time Dvigatel territory from earlier era as they used the current production facility as storehouse.

Getting busy producing ventilation systems, owners never thought of moving their office to Ülemiste, along with the project design company belonging to the same entrepreneurs. «It never entered our heads to move the office to Ülemiste, as it is easier for customers to come to Kentmanni St, to talk to designers and clinch the deal,» explained GPB board member Valeri Povarnitsõn.

Meanwhile, Eesti Sai – making frozen foods for foreign markets – moved its very office and showrooms to Ülemiste while continuing production at Assaku, several kilometres away.

«It is important for our sales team to be located much nearer to the city than Assaku, and therefore two and a half years ago already we moved our showroom into Ülemiste,» said Eesti Sai sales director Marko Sauemägi. «What matters most to us is the extremely good location as we can bring our foreign partners and clients straight from the airport to showroom.»

Up to now, the environment and conditions have totally satisfied the bakery, and the rentee highly appreciates that Ülemiste City has sufficient room for development to offer. Should the company need more space, it is readily available nearby within the territory.

Mainor owner Ülo Pärnits involved the Finnish Technopolis in his endeavours for the very sake of uniting Ülemiste City with Scandinavia’s largest developments geared towards knowledge based companies. Now, they are in the same commercial estate chain as operates in Finland, Norway, Lithuania and Russia.

Location benefits

From the entrepreneurs’ point of view, Ülemiste City is a unique and inspiring environment enhancing creativity and impulsiveness. The development of the area was started in 2005. By now, the economic structure works well. They have developed about 82,000 m² of contemporary office space; on top of that, the place has about 127,000 m² of industrial and storage area. From 2014, about 300 companies are operating in Ülemiste City, with close to 6,000 jobs on location.

The advantage is a favourable location – in immediate vicinity of the large inroads into Tallinn, Tartu Highway and Peterburi Highway, while 700 metres from Tallinn Airport, 300 metres from Ülemiste train station, and 10 minutes by car from Tallinn City Centre. From many districts of Tallinn, Ülemiste City is accessible by public transport.

The area is blessed by the nearness of large shopping malls while housing a business university Mainor, kindergarten Kalli-kalli, European School, as well as a bicycle house, eateries, a park etc. The large car parks are enough for almost 2,000 passenger cars.

A third of Ülemiste City is developed by Technopolis Ülemiste AS, 51 percent of it owned by listed Finnish commercial real estate and support services company Technopolis Plc. Two thirds are developed by Mainor Ülemiste AS which also holds 49 percent of Technopolis Ülemiste AS.

Comment

Peep Sooman, Pindi Kinnisvara board member

I’ve been to Ülemiste with foreigners. Some het excited and want to show up with their enterprises. Others glance at the still-dominating post-Soviet environment and say: later.

To begin with, the intent by Ülo Pärnits to start developing real estate in the old rocket plant looked crazy. But Mr Pärnits played his cards right and went by the principle of business-creates-business.

For Tallinn, this is a phenomenon totally unique. In Ülemiste, they are not going all-out for some top-paying law office; rather, they are also offering conditions for start-ups. Also, it is nice the way they are attempting to create a town by itself, enhancing the hub feeling.

Meanwhile, the Ülemiste City location isn’t the best – at the moment, the public transport access is severely limited. At the moment, with a considerable lack of labour force in Tallinn, what every job seeker asks first is how do I get there from home. If you do not have a car, or it takes you an hour a day switching the public transport, that has an effect on decisions.

Comment

Viljar Arakas, Eften Capital board member

The indisputable advantage of Ülemiste City is that they are forcefully developing all accompanying services beginning from dental care, kindergarten and ending with laundry.

The dirt of the winter times disappears once warm weather arrives and the parks and the greenery come forth. This, for Estonia, introduces a vital factor – to attract business, we must look cool.

The success of Ülemiste City will be determined by access to the town, the availability of parking places and options to have lunch. The vicinity of the airport and selling itself as a successful IT-hub works very well. Meanwhile, I’m convinced that no whirlwind will be created by Ülemiste on the Estonian real estate market and, when it comes to competition, no business quarters can sever themselves from the rest of the market. If the Tallinn commercial real estate market is able to swallow 20,000 – 30,000 square metres of new area a year, it is highly unlikely that somebody is able – unhindered and very fast – create 80,000 square metres worth of commercial area.