Revitalizing Kista – a unique collaboration in urban development in Sweden
With a vision of reversing the downward trend in Kista, a suburb of northern Stockholm, five of Sweden’s most prominent property owners and developers have joined forces in an urban development project that has not been seen before in Sweden. The companies Corem, Vasakronan, Kungsleden (Castellum), Revelop and Atrium Ljungberg will together invest more than SEK 20 billion1 in the coming years, with the goal of making Kista an attractive area for investors, companies and residents. DLA Piper has acted as overall legal advisor to the project manager responsible for this unique collaboration.
The newly founded company, Kista Limitless, will serve as the hub for the collaboration, where the five investors will join together as one during the project. In interviews with Svenska fastighetsmagasinet The real estate worldJohan Thomsson, CEO of Kista Limitless, said that Kista already has a unique position as the leading ICT2 cluster in Europe and is a financial engine for Stockholm and Sweden. These are values that Kista Limitless wants to nurture and develop. The vision is to further develop the area as a creative hub and growth center, realizing the potential of the suburbs. Historically, Kista has contributed to making Sweden the innovation hub it is today and the goal is to secure this position for the future. Given the size of the investment, the long-term perspective and the broad and positive response, Thomsson believes that there is a good chance of success.3
A short story about Kista
Modern Coffin was built and expanded in the 1970s and 1980s. The suburb has great international diversity and a relatively young population. Since the 1980s, Kista has been known as Sweden’s IT center, which has given the area nicknames such as “Silicon Valley of Stockholm” and “Chipsta”. It takes about 15 minutes to get from Stockholm city center to Kista by metro and today about 35,000 people work there and 7,000 people study in the area. World-leading technology and telecom companies such as Ericsson, IBM, Huawei, CGI and Tele2 have offices in Kista and the Royal Institute of Technology and Stockholm University and the International English School have branches in the area. Kista’s skyline is dominated by the 32-storey Kista Science Tower and the 35-storey Victoria Tower. Near Victoria Tower you will find Kista exhibition hall, which consists of two halls and a total exhibition area of 9,000 m.2.
Questions to deal with
The suburb faces several challenges and is perceived as insecure, inflexible and outdated. The brand “Kista Science City” is unknown to many and as many as 65% of current tenants think that the brand has not had the expected positive effect on their business. As a result, companies have become reluctant to move their operations to Kista, competition with other areas has intensified and rental levels have stagnated. Although Stockholm’s total market for premises and tenancies has developed well over several years and is expected to grow further in the coming years, it is clear that Kista’s position will continue to weaken if measures are not taken.
Another problem Kista faces is architecture. When the area was built in the 1970s and 1980s, a function-based city plan was adopted. In the city center, adjacent to the metro, you will find the Kista Galleria shopping center with about 180 shops and restaurants. To the east of the shopping center are offices and other business premises. And to the west, mainly residential apartments have been built. Walkways and places for social activities are mainly concentrated in the areas adjacent to the metro station and the shopping center, while the outdoor area elsewhere is dominated by thoroughfares and tall wide buildings with reserved, anonymous facades. The area is simply uninspiring, boring and does not invite people to meet and meet.
Another negative trend Kista Limitless wants to reverse is how Kista is portrayed in the media. News about gang-related shootings is often presented in headlines, while positive news and statistics showing that the number of robberies and assaults has decreased significantly since 2017 are ignored.
An action plan for the future
To reverse this negative development and make Kista a more attractive choice for investors, companies and residents, the five major property owners and developers initiated the joint venture. Kista Limitless was founded and an action plan was prepared based on qualitative and quantitative information together with an econometric model, including analysis of previous studies and reports such as trend reports and articles.
To prepare the action plan, experts, employees, students and residents were interviewed and measurements and observations of the surrounding areas regarding, for example, health factors were made. The analysis included demographic data, property-related data, crime statistics, premises and housing potential. And current and potential target groups were identified and analyzed. Thereafter, a combination of architects, real estate experts, management consultants, brand strategists and service designers worked closely together to find the best way forward before conducting project, management and collaboration workshops. Finally, panels with expertise in organizational development, communication and urban development provided feedback and potential services were tested to ensure high relevance and provide guidance to the prioritization process.
The analysis resulted in three main recommendations:
- to create conditions for a safe, functional and dynamic urban environment;
- to be relevant and to connect companies, educational institutions, workers and residents without friction; and
- to encourage differentiation to inspire world-class innovation where the possibilities know no bounds.
The time frame for the completed action plan extends to 2035 and includes the development of:
- 8,000 new residential apartments
- 8,000 new jobs
- 2 new hotels
- 20 new community properties
- restaurants, cafes and commercial areas
- renovation of parks and other public spaces
- a new infrastructure with renovation of metro areas, bus stops and extension of the tram line, connects existing bus and metro lines
The work begins
The project has been divided into stages, each of which has been discussed and developed together with the relevant project group. The first phase will be completed in 2022 and will include:
- art and lighting installations at bus stops and in pedestrian and bicycle tunnels
- pop-up studios on the ground floors of several buildings
- exhibitions
- food trucks
- a food festival
- cleaning and renovation
- areas of activity
- sporting event
In 2035, with efficiency and flexibility in mind, the intention is to have made Kista a more inviting, attractive, safe and clean suburb. Roads that are currently built for traffic will be adapted for pedestrians and cyclists and new apartment buildings and parks will be built. Meeting places will be created as the architecture opens up and the ground floors are adapted for restaurants, sporting events, exhibitions and food festivals. Social events and activities will be promoted in areas between buildings and in parks. Artistic lightning and road signs will be designed to make the area more inviting and increase the general feeling of security. Since Kista is located in an area where nature is just around the corner, a green network is created with easily accessible roads to offer beautiful nature, recreation and playgrounds. The goal is to attract more people to stay in nature and get the population to stop, meet and talk and open up for activities, life and commitment.
In close collaboration with businesses that are already active in the area, initiatives will promote the local education system, business, culture, sports, entertainment and health, including inspirational lectures and local exhibitions where companies and individuals can present themselves and show innovations made in Kista. In short, Kista will be a place for creativity, inspiration and togetherness.
To realize its vision, Kista Limitless has observed and analyzed the current situation, created a new design plan for the local area based on research, interviews and observations and developed a concept that has been tested and revised. The work has, and will be, significant and a total amount of approximately SEK 20 billion will be invested in the project. The investments are significant, but they are also expected to pay off in the future. If Kista becomes more attractive to investors, companies and residents, the average rent can increase by as much as SEK 900 per m2 one year. The potential increase in value of the property would amount to approximately SEK 4.5 billion.4 On the other hand, if no action is taken, it is likely that Kista will continue to lose its competitiveness, in an otherwise growing real estate market, and that rental levels would continue to fall.