Since the Crisis



Since the Crisis
Volume 18 | Issue 4 | April 2012
Since the Crisis
CEE’s Top Residential
Developers: 2008 - 2012
CZK 150 | HUF 1900 | PLN 26 (8% VAT incl.) | RON 25 | € 5.90 | index 37332X
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Editorial 3 | Real Talk 4 | Company News 6 | Editorial 8 | Financial Page 10 | Politics 12 | Residential
Top 50 14 | Economics 66 | Indicators 67 | Events 68 | DBH 70 | Appointments 72 | Mitzi 72 |
24 Czech republic
Skanska fights sticker shock with discount 24 | Tallest Czech residential tower under construction
24 | Finep signs contract with Vodafone 25 | PPF to go ahead with Argentinska hvězda 25 |
Tifannys tees off golf residential 26 | CTP rent revenues tops €100m 26 | Orco to re-start residential
construction 27 | Phase II starts at Čakovický park 27 | Prague’s residential market fall continues 28
CPI sold on Czech retail parks 30 | Prague highstreet watch 30 | Nova Karolina beats the odds 32 |
Eduard Zehetner (Immofinanz): Control is better 33 | Immofinanz begins on Jindřišská office project
34 | Further investment growth not guaranteed 34 | News 36
Retail market activity slows 38 | News 40 | Mercedes opens Kecskemet plant 41
REAS: Lower prices have benefited residential market 44 | Hines defends Krakow residential scheme
46 | News 48 | Bottom approaching for residential prices? 49 | PKP on the way with the news
investments 49 | Forget the old standards for flats 50 | News 52
54 Romania
Rental sector pays dividends for Benevo 54 | Conarg’s bet on residential pays off 56 | News 57 - 59
60 Slovakia
BBC 1 Plus nears completion 60 | Residential‘s new motto: Small is beautiful 62 | Hegedus: Shortterm office deals now rare 64
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Financing, past and future
We seem to be trying to live in a world guided by the sort of framework we were raised in, one in which recessions
come and go, interest rates rise and fall, and demand for real estate comes and goes in waves. Except the tide
started going out nearly five years ago and there’s little indication that it has any intention of coming back in on
The real difficulty perhaps is that we are simply in uncharted waters. Financial crises of the one we witnessed don’t
come around terribly often, so economic historians are stuck looking back generations, even hundreds of years.
But do we really believe conclusions from such different eras? And even if there were larger truths out there, how
can they be accurate if they fail to take into account a globalized economy, a faltering monetary union made up of
sovereign nations, the importance of hedge funds and the role of credit default swaps, not to mention all the other
specialized financial instruments so complex their creators don’t always understand them?
Rather than concentrating on how all these known factors and unknown forces will combine together, it perhaps
makes more sense to concentrate on what we do know. There are two primary issues, one past, and one present.
A recent study by Morgan Stanley lays them out quite clearly. On the one hand, it reminds us that commercial real
estate faces a €400bn to €700bn funding gap that’s yawning ever closer to our present day. Banks are deleveraging
for a variety of reasons, and there’s little that can be done about it. The key to how painful this process is, in Morgan
Stanley’s view, is whether the macro situation is benign or marked by crisis. It warns that alternative funding providers could provide up to €100m in gap funding, they will likely pick off the low hanging fruit, leaving the more
difficult positions to the banks to solve for themselves.
Just as worrying is Morgan Stanley’s view of the future of finance. It repeats an argument being heard with increasing frequency that current margins for commercial real estate lending in Europe are not covering the cost of equity.
This may come as a nasty shock to those looking to secure financing now if they think loans are already too expensive. There’s this belief that financing will eventually become more affordable and accessible, since banks have lend
money in order to survive, after all. Yes, they do, but making a profit at banks is job number one. Borrow now, while
you still can, the message seems to be.
Robert McLean
Editor In Chief
Real Talk
BNP Paribas Real Estate goes for market share
The group reported its sales went up by 6 percent in 2011
BNP Paribas Real Estate goes for market share | 10
BNP Paribas Real Estate is gearing up for a battle for a bigger chunk
of market share, though it realizes this means it must come at the
expense of CBRE, Jones Lang LaSalle, Cushman & Wakefield and
DTZ. “The range of our services is much wider than our competitors,” claims Phillipe Mer, BNP Paribas chief in Poland, pointing out
that a large lender, well-recognized in Poland, stands behind the
new company. BNP Paribas bank is an umbrella for its real estate
arm investments. BNP Paribas Real Estate Group has released its
2011 financial results, which show an 11 percent increase in oper10 ating profit, which came in at €156m. The group also reported its
sales went up by 6 percent in 2011 compared to the same period
in 2010, reaching €658m. According to the report, 36 percent of
total revenues came outside France.
One third of the apartments have been sold
Rezidence Stodůlky selling during construction | 16
AFI Cotroceni Palace offers 76,000 sqm of leasable area
AFI Palace Cotroceni rents hit €23.85m | 4
adversaries: the tall one will be a slim 13-storey structure with
attractive views from the top floors. The lower will offer more
privacy, with just 2-3 units on each of its four floors. Both terraces
and the roof of the building will be covered with greenery. The
project is scheduled for completion next March.
PSJ is acting both as a general contractor and investor since acquiring it with a valid construction permit through the purchase
of the project vehicle Wadia Nárožní. Rezidence Stodůlky, located next to the Central Park in Nové Butovice, will offer units ranging from 36 sqm studios to 3-roomed apartments of 86 sqm. Prices will range from CZK 2.5m to CZK 5.5m including VAT. Prokop
Svoboda of the broker, Svoboda & Williams, says it’s the best sell16 ing project on their list. “One third of the apartments have been
already sold, without construction even getting above ground
yet,” says PSJ project manager Pavel Tošovský. Komerční banka
is the lender and provider of the mortgage financing for the clients as well.
AFI Palace Cotroceni rents hit €23.85m
Rezidence Stodůlky selling during
PSJ is building Rezidence Stodůlky, a project consisting of two
apartment buildings that will offer a total of 117 flats. Architects
from the studio PH6 designed the buildings as complementary
Last year, AFI Europe received €23.85m in rental income from its
scheme AFI Cotroceni Palace, which is quite close to the 2010
figures, which came in at €23.7m. The figures were published in
4 AFI Europe’s annual report for 2011. AFI Cotroceni Palace, which
offers 76,000 sqm of leasable area, was opened in late 2009 following an investment of €300m. The company’s portfolio was
valued at the end of 2011 at €1.1 bn, €535.3m of which is stored
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Real Talk
Twelve hundred people will come to work in the offices
17 | Wenceslas 47 construction to begin
The majority of the existing Casa Radio will be demolished
4 | Casa Radio project value halved since 2010
(14,000 sqm in all) along with 5,700 sqm of retail on the bottom
two floors and one underground level. A full 5,000 sqm of underground parking will also be created.
Woolf claims that a pre-lease for the entire retail space is about
to be signed, which has cleared the way for bank financing. CPI
Invest, which leases around 2,000 sqm of office space in Wenceslas 47, has an option to take space in the new building as well.
The CZK 2bn project has been 5 years in the planning process.
in assets held in Romania. AFI Europe owns 226,000 sqm of land
in plots located in Bucharest, Ploiesti and Arad, where it hopes to
build developer more schemes both this year and in 2013.
Wenceslas 47 construction to begin
Clearing works are set to begin at Wenceslas 47 in five months
in a project that will see the removal of the existing 19th century
building. Set on the corner of Opletalova Street, the building will
make way for a steel, glass and stone building designed by the
architects Chapman Taylor.
Until now, the owner, Flow East, has added to its portfolio in the
center of Prague with politically simpler reconstructions and renovation projects. With this project, however, the company’s director James Woolf appears determined to set a new benchmark
for prime commercial space on Prague’s most famous square,
and to contribute to its overall revitalization.
Critics from groups like the Club for Old Prague may dismiss
such statements as so much marketing, but Jan Pokorný, one
of the Chapman Taylor architects working on the scheme, says
the project will have to be attractive to foreign investors, and to
the professionals and employees who will eventually work there.
17 “Twelve hundred people will come to work in the offices, and
they’ll have to have their lunch and shop somewhere,” he says.
The project calls for creating a large street frontage by combining the Wenceslas 47 building with the building next to it
at Opletalova 3, which Flow East also owns. The resulting interior space will make possible 2,300 sqm floor plates for offices
Casa Radio project value halved since 2010
The value of the Casa Radio project, located in Bucharest, is currently valued at €331.7m, a significant fall from the €772.35m it
was worth in 2010, according Plaza Centers’ annual report for
4 2011. The majority of the existing Casa Radio will be demolished, to be replaced with a 600,000 sqm development. Plaza
Centers has delayed completion estimate for the project until
2016, having already predicted it wouldn’t be finished before
2013. The project includes retail, office space, 5-star hotel, a casino, hypermarket and a conference center.
Company News
CBRE has announced that its tenant
representation team assisted Radian
Systems with the lease renewal of 1,486 sqm
at Anglicka 26, a building in Prague 2 owned
by ANCO group. The transaction was
completed in Q1 2012. “This deal shows that
mergers and acquisitions will be a significant
driver of office take-up in the Prague market
this year,” says Jan Kratochvil, Associate
Director at CBRE.
CPI has accelerated construction works in
the Czech city of Olomouc on the Raiffeisen
Bank building, part of CPI City Center
Olomouc. The 6,300 sqm office building has
seen an entire floor completed in the past
10 days and the shell is scheduled for
completion in June 2012. Work on the
congress center has also risen above the
level of the foundation. The whole complex,
which includes a complete reconstruction
of the existing Sigma hotel into a Clarion
Congress center, should be completed in
August 2013. It’s estimate that total costs for
the project will run to around CZK 520m.
tender, and expects to obtain a construction
permit for its two-storey shopping and
entertainment center in the near future.
Called Brama Mazur, the project creates
16,250 sqm of GLA, with 600 parking places
in the underground parking garage.
replaces Mayo Chix fashion, which has
chosen to “sell” its lease contract saying
that a shopping center unit would suit them
better, says Carlo Gradl, director of Max
Immo. Grand Optical closed its old shop in
the Myslbek center in favor of direct access
to the highstreet.
Goodman is working on a built-to-suit
warehouse for SAS Autotechnik in Mladá
Boleslav. The car parts supplier for Škoda
Autom which is based in Mladá Boleslav, has
signed a 7.5-year lease contract for the
22,000 sqm property and will start
operations there in July 2012. The building
offers 19,645 sqm of industrial space and
2,527 sqm of office.
During the last two years, Skanska AB has
invested €155m into the Polish property
market, and currently has five projects
under construction across the country
thought its subsidiary Skanska Property
Poland. Those schemes represent a pipeline
of 116,000 sqm of new space, including
Atrum 1, a project launched in 2011 at the
ONZ roundabout that is expected to deliver
18,000 sqm of office space.
Impact-Corti plans to build office at Anděl,
Prague 5. The CZK 400m, 7,000 sqm project
called Green Point should be certified as a
green building and will be developed in
partnership with Hampshire Investment &
Developments, as was the developer’s first
project in Prague, Mosaic Hotel. With
construction permit to be issued in May the
developer hopes to start works in autumn.
mayland real estate
Mayland Real Estate has signed up Martes
Sport as a tenant at its expanded Jantar
shopping center, delivered in the Polish city
of Słupsk three years ago. A distributor of
brands like Arena, Colmar, Hi-Tec, Iguana,
Magnum, Newland, Martes took 700 sqm at
the mall that is now 93 percent let.
mater management group
Mater Management Group announced its
most recent land purchase in March, saying
it bought a 1.85 ha plot located at the
junction of Dąbrowskiego and Kościuszki
streets in the Polish city of Ełk. The developer
acquired the land from Elk’s City Hall in a
Max Immo
MAX Immo has signed Grand Optical up for
a 200 sqm unit on the 28. října pedestrian
zone, connecting Prague’s highstreet Na
Příkopě to Národní. The optician retailer
Warsaw’s Okęcie Business Park is filling up,
according to the developer GTC, with two
new tenants taking office space at the
Corius building, the scheme’s third building.
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Company News
Delivered in December 2011 at the Żwirki
and Wigury Street intersection in Warsaw,
the 8,840 sqm building’s tenants will now
include Amber Gold (2,700 sqm) while
Polskie Porty Lotnicze (Polish Airports) took
1,900 sqm, and plans to move into the
building this July.
Six of GTC’s tenants in Galeria Kazimierz
have extended their leases at the Krakow
mall. The companies agreeing to stay on at
the 38,200 sqm shopping mall are four
fashion brands, Reserved (1,288 sqm), Three
Crosses Square (255 sqm), Cropp Town (238
sqm) and Camaieu (165 sqm), along with the
jeweler’s shop of W.Kruk (75 sqm) and Gino
Rossi (148 sqm), a shoe retailer.
Hochtief’s Polish branch has been selected to
build Castorama shopping center, which is to
be built in the Polish city of Oświęcim. The
scheme calls for the construction of a 7,000 sqm
of retail, along with the project’s technical
infrastructure. The value of the contract is being
kept confidential, but the completion date for
the scheme has been set for August 2012.
Platinium Business Park
Platinium Business Park in Warsaw will
accommodate a new tenant, the US company
VeriFone company, which has taken 1,110 sqm
in the Platinium V building. The electronic
payment solutions provider will take up the
entire fifth floor of the building. According to
the agreement, the company is to move to its
new premises this June, when Platinium V is
set for the completion. When delivered,
building V will provide 11,000 sqm of office
space of which 60 percent is currently let.
Segro plans to continue its projects
launched in 2011, the company has
announced, along with new locations it has
targeted recently, including in the north of
Poland where it plans to build Segro Logistic
Park Gdańsk. The project is expected to
deliver 95,000 sqm of storage and industrial
space to the local market. “We expect a
vacancy rate drop in the long-term,” said
Magdalena Szulc, Segro’s Business Unit
Director Central Europe.
JER Partners business goes to lasalle
LaSalle Investment Management has completed the
transfer of the JER Partner’s European fund management business. The transfer covers 11 investments with
over 90 assets in two funds covering eight current jurisdictions. JER’s
staff joining LaSalle include Chester Barnes, Colin Blackmore, Claire
Handley, Deborah Rossiter, Jean-Baptiste Meyer, Dale Condon, David
Germer and Christian Perpinya will be based in London. Karim Habra,
Chris Zeuner, Petr Kosar and Radka Rajska will work from Prague. “In
this economic environment, investors appreciate the importance of
maintaining the stability of the team managing the assets to maximize
the recovery of equity value, and the integration positions us well to
provide this service,” says Simon Marrison, LaSalle’s European CEO.
Debenhams looks for Russian return
The British department store Debenhams is re-entering the Russian market. It plans to open its first store in
MEGA Belaya Dacha, Moscow’s largest shopping center
in September, to be able to tap on the fast growing Russian retail
market. It’s the company’s second attempt, having exited Russia in
2007 after a failed first attempt to establish itself. Britain’s number two
department store group by volume of sales plans to open a 3,251 sqm
store in the shopping center owned by the furniture retailer Ikea’s Russian shopping centers arm, with its franchise partner Debruss. “Russia
is a key market,” according Debenhams International’s senior business
manager Lucy Haine. She told Reuters that sales per square foot are far
higher in Russia than in Europe. Seven more stores in Russia could be
added over the next five years to the company’s 167 Debenhams stores
in Britain, Ireland and Denmark.
Colliers International UK business acquired by FirstService
Colliers International UK became a wholly-owned
subsidiary of FirstService Corporation as of March 28.
FirstService already owned nearly 90 percent of Colliers International
globally prior to the acquisition of its UK operation, which also includes a UK ownership interest in Ireland and Spain. The transaction will
not affect the UK management team, with Tony Horell set to keep his
position as CEO of Colliers International UK & Ireland. “The deal means
we have recapitalized the UK business and have the financial might of
FirstService behind us, which intends to invest further in our business,
as well as the global strength and depth of Colliers International to call
upon,” he says.
Doug Frye, Chairman of Colliers International says the EMEA region is
a significant component the company’s global growth strategy and
building a strong UK business is central to the company’s success. “I
am confident that by combining our strengths we will accelerate the
success of our clients and our people.”
Cubic Property Fund takes over Benetton
building in Copenhagen
Saxo Properties has finalized the acquisition of Købmagergade 24, a Benetton owned prime commercial
property in the Copenhagen’s high end retail district. On May 1, Cubic
Property Fund will add the building to its portfolio of properties, which
is currently worth more than €180m. Saxo Properties have taken on the
role of partner and intermediary for the purchaser in the transaction.
The 1,458 sqm building is being taken over with a ten-year non-terminable lease contract to the Benetton Group, which has owned the
building and invested heavily into its face-lift. The building is the first
investment in Denmark for the Cubic Property Fund, as the fund primarily focuses on the UK market. “This is an important step in our strategy of investing significantly into the Copenhagen real estate market
and accords with the Fund‘s aim of investing into prime assets in core
locations,” says Rob Lundie, Director of The Cubic Property Fund. “We
are delighted to be making our first Copenhagen investment and are
very excited by the prospect of making further investments working in
conjunction with our partners at Saxo Properties.”
Financial Page
Immofinanz Group gets rental growth
Immofinanz Group’s rental revenues rose to €153.6m,
an 8.5 percent jump from Q2 to Q3 of its 2011/12 financial year. However, its net profit fell 90 percent
to €4.3m because of a variety of issues, including new derivatives
valuations, and the consolidation of its 69 percent stake in the Romanian developer Adama. Rent revenues over the first three quarters of
2011/12 reached €437.3m, 3.4 percent higher y-o-y. Retail rents led
the increase, with a 15 percent gain, though some of Immofinanz’s
office rent revenues fell thanks to the sale of some of its buildings.
VGP profits double
The industrial developer VGP’s net profits in 2011 hit
€12.9m, double its result of €6.2m in 2010. In addition, the sale of an 80 percent equity interest in VGP
CZ I and VGP CZ II, with a total transaction value of around €435m,
allowed the group to optimize its capital structure and to pay out
€40m in cash to its shareholders. While the company’s primary activities are in the Czech Republic, two further sales at the end of last
year, of VGP Estonia and VGP CZ IV, were signed with a transaction
value of over €30m. Sustained demand for warehouse space has resulted in lease contracts last year worth €4.6m, of which €3.5m represented new leases.
sales also went up last year, coming at PLN 131.1m in 2011 from PLN
125m in 2010. Inpro’s net profit went up by 14 percent, reaching PLN
19.1m in 2011, from PLN 16.7m it made in 2010.
CA Immobilien
According to its annual report for 2011, CA Immobilien’s rent revenues in 2011 increased by 61.5 percent
to €265.6m compared to the year before. The acquisition of Europolis played an important role in this, while the sale
of properties produced a profit of €52.8m. The sale of a 51 percent
stake in Olympia shopping centers in the Czech Republic was the
company’s largest transaction. “2011 was a good year for CA Immo,“
says the group’s CEO Bruno Ettenauer. “We have met our main goals
and we are able to pay dividends for the first time to our shareholders.“
PPG heading for WSE
Platinum Properties Group is heading to enter Warsaw Stock Exchange, as the Polish Antimonopoly Office has approved the developer’s decision to go public. “We expect to enter the WSE in the second quarter of 2012,” said
Gustaw Groth. PPG’s shareholders have agreed to put 140 million
shares on the open market this February, planing to raise as much as
PLN 70m. “The funds we acquire from the transaction are intended
for our new Russian project.” Groth revealed.
PKN Orlen not to pay dividends
PKN Orlen’s shareholders shouldn’t hold their collective breath in hopes of collecting a dividend this
year, as Poland’s largest oil refiner made other plans
to allocate profits. 2011 resulted in a PLN 1.39bn profit, but the
state-owned company plans to retain this in the face of the current
macroeconomic environment. Shareholders won’t be too surprised,
though, as PKN Orlen has not paid any dividends since 2008.
EBRD expects to spend €600m across
Inpro profits rise
The Tri-city listed developer Inpro closed 2011 with
a consolidated profit of PLN 17.7m, an increase of 2
percent compared to the PLN 17.3m it produced in
2010. Focused on residential projects, the developer reported its
The European Bank for Reconstruction and Development (EBRD) expects its investment volume in Poland
to total between €500m and 600m for 2011, just half the amount
the bank spent in 2011. In announcing the figures, EBRD president
Thomas Mirow said the bank is following current trends, as its strat-
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Financial Page
egy this year is to focus on two sectors: finance and energy. “Within
the energy sector we intend to focus on renewable energy, gas and
electricity distribution, improving the efficiency of energy production and constructing interconnectors,” Mirow said.
be copying the approach. “I think the banking sector will review
the universal strategy in the near future” says Sławomir Sikora, the
bank’s chairman. “Not many banks can afford it.” Mid-sized locations are being targeted for closings, as Bank Handlowy will focus
on the larger cities going forward.
Bank of China hits Polish market
Bank Handlowy cuts jobs in Poland
Nearly 590 employees will lose their jobs at Bank
Handlowy under the bank’s new strategy, which
calls for 85 branches (40 percent of its network) to be
closed by 2015. This will allow the company to cut 11 percent of its
staff in Poland. Its chairman predicts that competitors will be soon
China’s largest lender, the Bank of China, is entering
Poland’s financial market with its first branch planned
to open in Warsaw in April. With an estimated investment of USD 130bn, the bank hopes the move will encourage further cooperation between the countries.
Bartosz Komasa, responsible for bank’s entrance into Poland, say
he’s targeting at least 50 Polish companies interested in investing
in China. “Many companies from the top 50 in Poland, like Orlen,
KGHM, Energa and Enea, sent their representatives to accompany
President Bronisław Komorowski on a business trip to China [in December 2011]. They are interested in cooperation, and we want to
help them,” Komasa added.
Klaus: EU omelet not worth the
cracked eggs
Czech president Václav Klaus blamed the European
Union for the current egg shortage in the country and for rocketing prices. He suggests the recent scramble
for eggs stem from misplaced EU rules. “It’s a state failure -- but
which state?” he asked rhetorically in an opinion piece, setting
himself up for his favorite punch line. “It’s not just the state called
the Czech Republic but a second, far more dominant one called
the European Union.”
His editorial in the daily Lidove noviny coversindicates that the
EU is controlled by leftists who are always thinking of ways to
place new burdens on the market. New EU regulations ban the
importing of eggs from countries that don’t require minimum living standards for farm chickens. This has ruled out imports from
Poland, a major supplier of the Czech market, whose domestic
market is unable to meet local demand.
torically a staunch supporter of Bém, he said recently that wire
taps were destroying democracy. However, Jindřich Šidlo of the
daily Hospodarske noviny points out that Klaus doesn’t seem to
have a problem with Bem’s relationship with Janoušek. Bém says
he will fight the charges to the last breath, just as he did when
climbing Mount Everest. There are many who would find this a
useful analogy: Not only did Bém attract considerable criticism a
few years back for taking a couple weeks off to climb the world’s
highest mountain, there were also concerns about who actually
sponsored his expedition.
While there have been persistent rumors for years that Prague’s
political elite had more than simply the public good in mind in
managing the city, the release of secret wiretaps of the shadowy figure of Roman Janoušek proved to be political dynamite.
They picked up conversations he had with the mayor 2007. Bém
is heard speaking on extremely friendly terms, using slang nicknames, while discussing everything from personnel changes
state-controlled companies, to master plan issues, land sales, and
even refrigerator deliveries. Days after the recordings went viral,
the scandal took on a new dimension when Janoušek was arrested, drunk, after crashing into another car, and then running down
the driver when she tried to stop him from leaving the scene.
Adrian Nastase could do between 3
and 10 years in prison
Prague scandal fallout and impact
Is the right half of the Czech political spectrum
headed for civil war? Prime Minister Petr Necas
(ODS) took a rather unprecedented stand against his fellow party
member Pavel Bém, the former mayor of Prague, following the
release of wire taps showing his close relationship with an enormously powerful, behind-the-scenes influence peddler named
Roman Janoušek.
It’s highly unusual for ODS members to throw other members
under the political bus this way, and it will be interesting to see
how president Vaclav Klaus, a former ODS member, reacts. His-
The Romanian chief prosecutor is seeking three to
ten years in prison for former Prime Minister Adrian
Nastase, his wife Dana Nastase and for Irina Jianu Paul, the former
head of the State Inspectorate for Constructions. The trio is
charged with corruption in connection with the “Zambaccian” file.
Prosecutors said that as prime minister, Adrian Nastase received
over €600,000 worth of goods from his wife, and construction
work for buildings in the Bucharest area. The former prime minister has also been charged in two other case.
Hungarian president Pál Schmitt
resigns over plagiarism charges
The most spectacular political debacle in recent
months has been the rather quick demise of Hungary’s president Schmitt Pál, who resigned his post at the beginning of April. Someone bothered to check his doctoral thesis
earlier in the year and realized that large portions of it had been
plagiarized from the work of an obscure Bulgarian researcher.
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Initially, Schmitt claimed that resigning would bring shame upon
the office of the presidency. Perhaps it wasn’t until the rector of
the university that issued his doctorate resigned over the scandal
that Schmitt actually realized that he’d managed to do considerable damage already, and that resigning was the only possible
solution. There’s been no clear indication about who the frontrunner to replace him would be, although potential candidates
include Parliamentary president László Kövér, and a former foreign minister János Mártonyi.
For his part, Viktor Orban did not put any overt pressure on the
president to give up his post, saying that there was no way for this
to be carried out by other institutions. But this may have been a
coded suggestion that Schmitt fall on his political sword to allow
someone else to replace him. His successor will be nominated by
the prime minister Viktor Orban in mid-April.
Partial pension reform compromise
achieved in poland
Donald Tusk tackled the thorny issue of pension
reform in March, and reached something of an
agreement with the junior government coalition member the
Polish People’s Party (PSL). While not as radical as Tusk would
have liked, in that a flat retirement age of 67 for men and women
wasn’t achieved, the compromise is being seen as a step in the direction of fiscal sanity. Women would be allowed to start drawing
partial pensions at the age of 62 if they continue to work at least
part time, while men will be able to do the same from age 65.
The catch is that once they hit the age of 67, the amount they’re
entitled to collect each month would be reduced.
The issue provoked long, drawn-out negotiations between
Tusks’s PO party and the PPL. It also inspired demonstrations, for
example by the opposition leader Jarosław Kaczyński, whose Law
and Justice party was adamantly against the reforms. Kaczyński
said the proposed new retirement reforms are targeting the
weakest people in society.
“There’s a certain rule at play here. And it must be said that it’s a
very despicable rule, which quite simply states that the weaker
you are the more you have to pay. This is a total reversal of justice,” Kaczyński said.
Despite the agreement, the Solidarity trade union continues to
demand a national referendum on the issue, having set up a “retirement village” outside the Prime Minister’s Office in Warsaw.
Slovak elections give Robert Fico a second chance
In March, Slovakia held parliamentary elections that
have completely redrawn the political landscape to
an extent that would have been unimaginable less than a year
ago. The outright winner this time was the former prime minister Robert Fico, whose party Smer took enough votes to make it
possible to rule without having to make deals with any coalition
partners. The fact that he is likely to bring on board other political forces is doing much to cool the concerns of observers concerns over another populist government taking power in Central
Europe. In fact, the most worrying aspect of Fico’s history was
precisely his political partners during his first regime: the nationalist party SDS, and the HZDS grouping led by former prime
minister Vladimir Mečiar, a pariah of European proportions.
Fico was the almost accidental beneficiary of what’s been
dubbed the Gorilla File, transcripts of secret service recordings
from the mid-2000’s of top Slovak politicians and the business
elite in which they discussed what sort of kickbacks could be demanded for the targeted sale of state companies. The file boomeranged back on the SDKU party, which had won the last elections on an anti-corruption platform, inspired by the perceived
cronyism that dogged Fico’s first administration. But while the
government had done far more to root out corruption than Fico
ever managed, the SDKU payed the ultimate political price for
being in power at the wrong time, and failed even to win a place
in the new parliament (5 percent is needed to be assigned seats).
Top 50
Since the Crisis
CEE’s Top Residential Developers:
2008 - 2012
Last year, CIJ listed the residential developers of the decade. This month, we bring
you an update on how those developers
have fared during the crisis.
The listing is based on information we
have gathered to the best of our abilities,
provided primarily by the developers
themselves. We welcome any feedback,
corrections and additions.
J.W. Construction Holding
Józef Kazimierz
Founder and Chairman of the Board
Dom Development
Country: Poland
Number of Projects/Phases: 16
Number of Units: 5,673
Country: Poland
Number of Projects/Phases: 28
Number of Units: 5,102
Górczewska Park (J.W. Construction Holding)
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Top 50
President of
the Management Board
Gant Development
Budimex Nieruchomości
Country: Poland
Number of Projects/Phases: 19
Number of Units: 3,352
Country: Poland
Number of Projects/Phases: 12
Number of Units: 2,767
Country: Poland
Number of Projects/Phases: 12
Number of Units: 2,654
Chairman of
the Board
CEO and
of the Management Board
Grupa Inwestycyjna Hossa
Central Group
Country: Poland
Number of Projects/Phases: 42
Number of Units: 2,222
Country: Czech Republic
Number of Projects/Phases: 82
Number of Units: 2,090
Country: Poland
Number of Projects/Phases: 16
Number of Units: 1,989
Tomas Pardubicky
Country: Czech Republic
Number of Projects/Phases: 8
Number of Units: 1,721
Country: Poland
Number of Projects/Phases: 29
Number of Units: 1,538
Top 50
Top 10 Residential Developers Czech Republic
Number of Units
Company Name
Central Group
Skanska Reality
Sekyra Group
Lighthouse Group
Orco Property Group
CP Praha
B.C.D. Group
Total Number of Units are based on residential units
completed from 01.01.2008 - 29.02.2012
Country: Poland
Number of Projects/Phases: 12
Number of Units: 1,506
Country: Poland
Number of Projects/Phases: 14
Number of Units: 1,479
Regional Director
Country Manager
Invest Komfort
Country: Hungary
Number of Projects/Phases: 8
Number of Units: 1,469
Country: Poland
Number of Projects/Phases: 20
Number of Units: 1,434
Country: Romania
Number of Projects/Phases: 1
Number of Units: 1,400
Andreas Holler
Member of the Executive Board
Adama Romania
Country: Romania
Number of Projects/Phases: 12
Number of Units: 1,382
Country: Poland
Number of Projects/Phases: 11
Number of Units: 1,335
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Top 50
Top Residential Developers Slovakia
Björn Mattsson
CEO & Chairman of the Board
Skanska Reality
Country: Czech Republic
Number of Projects/Phases: 11
Number of Units: 1,311
Number of Units
Company Name
Cresco Group
J&T Real Estate
Avestus Real Estate
Atlas Real
Vara Group
WEON Group
Vienna Gate Group
Total Number of Units are based on residential units
completed from 01.01.2008 - 29.02.2012
Country Manager
Eco Classic
GTC Romania
Conarg Real Estate
Country: Poland
Number of Projects/Phases: 7
Number of Units: 1,296
Country: Romania
Number of Projects/Phases: 2
Number of Units: 1,232
Country: Romania
Number of Projects/Phases: 2
Number of Units: 1,230
Chairman of
the Board
BRE. Locum S.A.
Sekyra Group
Country: Poland
Number of Projects/Phases: 10
Number of Units: 1,218
Country: Czech Republic
Number of Projects/Phases: 7
Number of Units: 1,207
Budowlane Górski
Country: Poland
Number of Projects/Phases: 20
Number of Units: 1,205
Top 50
Laurent Tirot
Bouygues Immobilier Polska
Country: Poland
Number of Projects/Phases: 9
Number of Units: 1,197
Country: Poland
Number of Projects/Phases: 7
Number of Units: 1,170
Piotr Nałęcz
Qualia Development
Country: Poland
Number of Projects/Phases: 7
Number of Units: 1,084
Country: Poland
Number of Projects/Phases: 8
Number of Units: 1,073
Country: Hungary
Number of Projects/Phases: 6
Number of Units: 1,047
Lior Harari
Autóker Holding
Country: Poland
Number of Projects/Phases: 9
Number of Units: 1,023
Country: Hungary
Number of Projects/Phases: 3
Number of Units: 1,000
Mieszkaniowa Salwator
Country: Poland
Number of Projects/Phases: 11
Number of Units: 998
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Top 50
Top Residential Developers Hungary
Country: Poland
Number of Projects/Phases: 11
Number of Units: 976
Country: Poland
Number of Projects/Phases: 6
Number of Units: 968
Number of Units
Company Name
Autóker Holding
Engel East Europe
SL Group Management
Real Hungary
Total Number of Units are based on residential units
completed from 01.01.2008 - 29.02.2012
Operating Officer
AFI Europe Poland
Atlas Estates
Tiriac Imobiliare
Country: Poland
Number of Projects/Phases: 5
Number of Units: 923
Country: Poland
Number of Projects/Phases: 3
Number of Units: 910
Country: Romania
Number of Projects/Phases: 2
Number of Units: 899
Piotr Puchała
Country: Poland
Number of Projects/Phases: 7
Number of Units: 889
Allcon Osiedla
Country: Poland
Number of Projects/Phases: 24
Number of Units: 827
Top 50
Top Residential Developers Romania
Number of Units
Company Name
Adama Romania
GTC Romania
Conarg Real Estate
Tiriac Imobiliare
Asmita Group
RCC Grup
Domus Stil
Cordia RO
Total Number of Units are based on residential units
completed from 01.01.2008 - 29.02.2012
Włodarzewska Development
Country: Poland
Number of Projects/Phases: 7
Number of Units: 807
Country: Poland
Number of Projects/Phases: 7
Number of Units: 795
Operating Officer
CEO and
Chairman of
the Board
Asmita Group
Wawel Service
Country: Romania
Number of Projects/Phases: 1
Number of Units: 788
Country: Czech Republic
Number of Projects/Phases: 7
Number of Units: 774
Country: Poland
Number of Projects/Phases: 5
Number of Units: 754
Tamir Winterstein
Lighthouse Group
Country: Czech Republic
Number of Projects/Phases: 2
Number of Units: 770
Ronson Development
Country: Poland
Number of Projects/Phases: 11
Number of Units: 751
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Top 50
Top 10 Residential Developers Poland
Štefan Beleš
Cresco Group
Country: Slovakia
Number of Projects/Phases: 4
Number of Units: 715
Carlos de
Company Name
J.W. Construction Holding
Dom Development
Gant Development
Budimex Nieruchomości
Grupa Inwestycyjna Hossa
Member of
the Board
Number of Units
Total Number of Units are based on residential units
completed from 01.01.2008 - 29.02.2012
Main Point Karlin
Acciona Nieruchomości
J&T Real Estate
Avestus Real Estate
Country: Poland
Number of Projects/Phases: 5
Number of Units: 695
Country: Slovakia
Number of Projects/Phases: 4
Number of Units: 658
Country: Slovakia
Number of Projects/Phases: 1
Number of Units: 633
Trio Apartamenty (ECO Classic)
wards W
III Towers (Cresco Group & Avestus Real Estate)
wards W
wards W
Zelene Mesto (Lighthouse Group)
Top 50
Top 50 Since the Crisis CEE’s Top Residential Developers: 2008 - 2012
The countries included in the list are the Czech Republic, Hungary, Poland, Slovakia and Romania.
The total number of units are comprised from all projects completed by the developer, by country from the years 01.01.2008 - 29.02. 2012
Number of
of Units
Gant Development
Budimex Nieruchomości
Grupa Inwestycyjna Hossa
Central Group
Czech Republic
Czech Republic
Company Name
J.W. Construction Holding
Dom Development
Number of
of Units
Company Name
Qualia Development
Autóker Holding
Spółdzielnia Mieszkaniowa Salwator
AFI Europe Poland
Atlas Estates
Tiriac Imobiliare
Invest Komfort
Allcon Osiedla Poland
Adama Romania
Włodarzewska Development
Skanska Reality
Czech Republic
Asmita Group
Czech Republic
Lighthouse Group
Czech Republic
Eco Classic
GTC Romania
Conarg Real Estate
Wawel Service
Ronson Development
BRE. Locum S.A.
Sekyra Group
Czech Republic
Przedsiębiorstwo Budowlane Górski .
Bouygues Immobilier Polska
Cresco Group
Acciona Nieruchomości
J&T Real Estate
Avestus Real Estate
Last year, CIJ listed the residential developers of the decade. This month, we bring you an update on how those developers have fared during the crisis.
The listing is based on information we have gathered to the best of our abilities, provided primarily by the developers themselves.
We welcome any feedback, corrections and additions.
Real Estate
50 reasons why 2012
For more information please contact:
Robert Fletcher | CEO | +48 506 074 042 | [email protected]
Czech Republic
Skanska fights
sticker shock with
Skanska has started sales on the next phase of
its Jahodnice residential project in Prague 14
- Hostavice. To wake consumers up from their
winter hibernation, the developer is launching
discounts, offering up to CZK 400,000 off for
the first 12 signed purchase contracts. This, it
hopes, will make up for the four percent VAT
increase (to 14 percent) that took effect as of
January 1 this year. “We’ve decided to transfer
the increase to the buyers because we believe
that the quality of the product justifies it,” says
Naděžda Ptáčková, Skanska’s director of sales
and marketing.
The developer hopes to reel in
clients discouraged by higher VAT
rates by offering discounts
Nina Fibigerová
units have been sold. In one building in the
growing complex, 18 percent of the 141 flats
have yet to be sold. Skanska’s strategy is to
have roughly 400 units available at any given
time, or roughly a year’s worth of sales, says
Ptáčková. In general, it will begin construction
of new buildings, once 75 to 80 percent of the
previous one has been taken.
Prices at Jahdonice go as low as CZK 46,000 per sqm
This newest building will add 61 new flats
to the existing 451 in a scheme that’s been
growing gradually since 2007. The four-storey
apartment building will offer flats of up to 93
sqm. A 46 sqm, two-room unit with a 6 sqm
balcony is on offer for CZK 2,349,312 including
VAT. The price per sqm starts at CZK 46,000.
Construction is due to start in mid-2012,
with completion scheduled by the end of
2013. But Ptáčková says that Skanska will
not start digging unless 20-30 percent of the
Tallest Czech residential tower under
A high rise residential building is being built in Prague’s Vysočany district. The 25-storey, 90 m building called
Rezidence Eliška will cost the investor
Vladimír Lederer, approximately CZK 500m
(€20.2m), according to the Czech News
Agency. The 385-apartment building, billed
as the tallest residential structure ever built
in the country, is under construction at the
moment by Metrostav. Up to 120 units
could be put up for rent, and the majority
of the flats are 33 sqm studios. A few luxury
maisonettes will be added on the upper
floors. “Our focus on the small units is not a
crisis scenario,” claims Lederer. He explains
that the project was always intended to target young people and singles. Half of the
units have been on sale since last autumn,
with 50 flats of them now sold at an average price of CZK 40,000/sqm. The higher
end units on the upper floors will go on
sale this summer. Completion is scheduled
in 2013.
Rezidence Eliška
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PPF to go ahead
with Argentinska
PPF Real Estate announced it will start
construction of the Argentinská hvězda office
building in Prague 7 Holešovice. The move
follows repeated attempts to win the trust
of Prague 7 in a series of tenders launched,
and then cancelled, by the municipality’s city
council. Argentinská hvězda won a place on
the short list each time, but PPF has either lost
patience with the process, or found sufficient
confidence in its ability to fill the space upon
Czech Republic
In the midst of a deep recession,
PPF is beginning a 28,000 sqm
office scheme without a tenant
Nina Fibigerová
PPF suddenly found the courage to go forward with a long-delayed scheme in Prague 7
“PPF Real Estate decided to start negotiations
with other potential tenants, and not tie
the start of construction with the decision
making process of Prague 7,” says Martin
Tuček, investment director in PPF Real Estate,
who insists the project is highly flexible for
large and smaller users
Argentinská hvězda will offer 28,000 sqm
of leasable space including retail and services
and parking with the capacity for 400 cars.
It’s located on the crossing of Argentinská,
Tusarova and Jateční streets, near the
Holešovice metro station. The project is
scheduled for completion in 2014.
Finep signs contract
with Vodafone
The developer Finep has
signed a contract with
Vodafone to build a new headquarters
for the mobile operator. The building
will be part of Finep’s growing City
West project in Prague 5. Vodafone
will lease 15,000 sqm of office space in
the LEED Silver certified building. “The
certification means not only that the
building is environmentally friendly, but
that its operational costs will be lower,”
says the Finep CEO Tomáš Pardubický.
Muriel Anton, the director of Vodafone,
admits energy efficiency was one of its
key criteria, along with its location by
the metro. Construction will start this
summer, with the start of operation
scheduled for January 2015. A tender
for the general contractor is currently
underway, says Pardubický. The Vodafone
building will bring the total area of office
space in City West to 90,000 sqm.
Vodafone’s future Prague HQs
Czech Republic
Tifannys tees off
golf residential
The investor Tifannys, a company owned
by South Korean Kos Wire Europe, hopes
to start construction on a residential
project called Na Veselé along the edges of
the golf area Beroun Golf Resort. Located
on the outskirts of the city of Beroun to
the west of Prague, the new residential
complex will offer 94 units in two
apartment blocks along with a parking lot
A South Korean manufacturer is
making the latest in a string of
residential projects near Beroun
Nina Fibigerová
with capacity for 128 cars. It was designed
by architects Ivo Chvojka and Jan Šabart.
The contractors T.A.Q. and Interma will
build the project’s two buildings one at
a time, and Tifannys says work on the
first one should begin in the first half of
2012. Clearing of the land began at the
end of January. Thirty-eight units are
The flats at Na Veselé will have a higher number of large flats than is normal these days
scheduled to come on line by the end
of 2013 in the first building, along with
268 sqm of commercial space. Flat sales
officially began before Christmas and the
developer’s project manager Martin Klein
of the company Projectil says three of the
units have been reserved so far.
The developer will leverage the scheme’s
proximity to one of its previous projects,
the Beroun Golf Resort, opened in May
2009. Its parent company Kos Wire Europe
may have more of an industrial bent (it
produces wire in Lovosice in northwest
Bohemia), but it has a history of creating
golf resorts in South Korea and Japan.
Prices range from CZK 38,000 - CZK
46,000 per sqm (before VAT). Klein says
the developer is betting on there being
greater than usual demand for larger
units at Na Veselé, leading to the decision
to build just eight 2-room flats, compared
to 14 in the 4-5 room range. Tiffanys is
hoping that sales go as smoothly as the
units in its first residential project next to
the same golf course where all but one of
the 50 units were taken over the course of
a single year.
CTP rent revenues
tops €100m
Rental revenues at the
property company CTP surpassed €100m in 2011 for the first time in
the company’s history, but the expansion
of its portfolio continues. At the moment,
that includes 180 buildings and 1.75 million square meters of leasable space.
Last year, the company began construc-
tion work on CTPark Brno II while completing four fully occupied buildings in
the city. It’s also working on two office
projects, Spielberk Towers in Brno and IQ
Ostrava. In all CTP has 20 buildings under
construction that are due for completion
by the end of 2012.
“The market value of CTP assets and
projects in construction stages has exceed
€1.6bn, which is 11 percent up year-on-
year,” says CTP CEO Remon Vos, adding
that the total includes land acquisitions in
key locations. The total asset value of the
portfolio is now €1.8bn, while gross profits topped out at €90m and net profits at
€77m. CTP has expanded its network of
financing banks to nine, having recently
added VÚB/Intesa, ČSOB/KCB, Raiffeisenbank ČR and UniCredit.
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Orco to re-start
Orco says it’s back on the Czech residential
market. Following a year of re-evaluating
its residential portfolio, construction on its
142-unit Mezihoří scheme near Palmovka in
Prague 8 should begin in early April. While
Orco bought the land for the project during
the real estate boom, company officials insist
the apartments can be sold for reasonable
prices, and that easy metro access should
make it popular. Completion is expected in
“It’s a kind of resuscitation. The project was in
the Orco portfolio before the crisis struck and
since 2007 the prices of flats have dropped
by 20-30 percent,” says Orco’s sales director
Jaroslav Žižka. “But construction costs have
fallen by 20-30 percent as well, which means
that if a project was well-conceived back in
2007, and if you adjust it a bit to the current
market, the economics should still work.”
Czech Republic
In a return to Prague’s residential
market, Orco Property Group
is starting construction near
Nina Fibigerová
At Mezihoří the main focus will be on tworoomed units, as Orco perceives strong
demand for them in locations near the metro. A
system of client changes allows for connecting
smaller units to create 3-4 roomed flats, but
they should expand only up to 80 sqm, so that
they can be sold for under CZK 4m, says Žižka.
The headline average price per sqm is CZK
44,000 (before VAT), while discounts cut that
down to just CZK 42,000/sqm. Such prices
attracted fifteen reservations in the first
month since launching the sales campaign.
“We need to have 50 pre-contracts signed by
the end of October, because of the financing
bank, and it seems we could achieve this by
the end of August. That’s a bit too fast, but
the price range between CZK 42,000 - CZK
44,000 enables us to control the pace of sales
and increase the prices slightly, as the starting
discount means minimum profit for us.” Orco is
also working on the 850 unit project Sluneční
vršek in Prague Hostivař, while in Benice, it’s
trying to sell off 21 family homes from a total
of 32 built in the second completed phase.
Orco hopes to have 50 pre-contracts signed by October
Projects which do not make sense for Orco
under the current conditions are being put
up for sale, he says, while the developer is
redesigning and re-thinking the layouts and
fit outs of those it’s decided to hold on to.
Phase II starts at
Čakovický park
M&K Development has started selling flats in the second
phase of Čakovický park, a residential project
it’s been developing in partnership with
Natland Group. Made up of two apartment
buildings named Lilie (Lily) and Mateřídouška
(Thyme), this addition, worth CZK 200m, will
raise the total number of flats on offer to 88.
Mateřídouška will feature a so-called tower,
with one unit on each floor, offering views in
all directions.
Prices will start at CZK 38,000 per sqm (CZK
43,500/sqm including VAT), which the developer hopes will attract the cost-conscious
clientele. “A discount covering the recent VAT
increase of four percent is on offer until the
end of March,” says Ivan Ševěček, Development Director at M&K Development. 10 percent of the units have been reserved while
one was sold as of mid-March. The developer
needs to secure a 25 percent pre-lease to be
able to start construction, together with 30
percent of its own equity. Raiffeisen Bank is
the lender for Čakovický park.
Thyme and Lily offer units ranging from 30
sqm studios to 6-room maisonettes with 120
sqm. The developer also decided to stick to
the flexible two/three roomed units, which
proved popular in the previous stage of the
project. Retail space is for sale on the ground
floor, with 100 sqm units with parking space
offered at CZK 3m. “The space is suitable for
cafés, small shops and services that should
serve the inhabitants,” says Ševěček.
Czech Republic
Prague’s residential
market fall
Following the bottom of the housing
crisis in 2009, Prague’s residential market
experienced gradual growth in 2010 and
2011. In fact, 2011 turned out to be a quite
successful year for many developers active
in Prague. When looking at data available
from REAS’s in-house market monitoring on
sales of new apartments, new supply and
pricing, the market visibly improved last
year in both demand and supply, although
price recovery evidently lagged behind.
On the sales side, approximately 4,500
apartments offered by developers found
buyers, which means an increase in
transactions by 32 percent compared
to 2010. At the same time, the number
of apartments launched by residential
developers in new projects rose
considerably and surpassed the number
of sold units. The surplus in supply may
seem somewhat strange, particularly in
REAS research suggests that prices
have been falling on Prague’s
residential market even as projects
become more competitive
Maximilian Mendel
view of the recent crisis. However, various
developers felt encouraged not just by the
improving pace of sales to commence new
investments in 2011, but by the anticipated
stimulus from the announced VAT increase
in January 2012. For many developers,
the investment strategy paid off as their
projects were better adjusted to demand,
both price-wise and product-wise, thus
creating a very competitive offering.
The most obvious changes in new supply
occurred in apartment sizes, project-mix
and segmentation. Generally speaking,
developers stuck to projects in the low-end
and lower-middle market segments, while
upper-middle and luxury products were
largely put aside. This move was integral
to target the middle-class clients who
compose the largest home buyer group
but who have limited access to mortgage
financing. A second step towards catering
Lower prices continue to be the calling card of the more successful residential schemes
to the needs of this target group was a
focus on smaller units across all apartment
types (studio, one-bedroom, two-bedroom,
etc.). This cut the total price per apartment
and, thus, increased housing affordability.
However, it wasn’t just the new units
boasting lower prices, but those launched
earlier where apartments remained unsold.
In the latter case, developers had to react to
unsustainable price levels in order to boost
sales and to regain cash flow. In Q4 2011,
31 percent of the market offering in Prague
was made of apartments available for sale
in completed investments, a rather high
rate compared with other CEE markets. In
total there were almost 7,300 apartments
in the market offered in more than 350
projects at the end of 2011. On average,
prices on Prague’s primary residential
market decreased by 6 percent between Q4
2011 and Q4 2010. In fact, prices in many
projects are still unsustainable and need
further correction.
Regarding the outlook for 2012, a sales
slowdown is likely to take place, due to
a worsening macroeconomic situation,
illiquidity of banks, the impact of higher
VAT from January 1, and a fiercer level
of competition. On the other hand,
interest rates have remained low and
may still support demand for housing.
Indeed, preliminary data from our Q1
2012 monitoring indicate that sales have
not stopped entirely yet, thanks to a
more sustainable price policy by various
developers. However, it is certain that
we can expect further price decreases
throughout 2012 and more cautious supply
activity of developers.
Czech Republic
CPI sold on Czech
retail parks
CPI Group opened a new retail park in
Beroun, a town to the west of Prague.
The investor’s 22nd retail park in the
Czech Republic is located in an existing
shopping zone on a road parallel to the
D5 motorway connecting Beroun with
Pilsen and Prague. The 2,800 sqm park,
which opened March 15, is anchored
by an OBI store, along with stores for
Takko Fashion, Deichmann, Planeo
Elektro, Sportisimo and Wiky hračky. The
developer has had less luck filling other
retail parks, such as the ones it operates
in Trutnov and Prostějov.
The country‘s most active property
company continues its expansion
in large format retail
Nina Fibigerová
“There’s a lack of potential tenants,” says Jiří
Kristek, a partner at Cushman & Wakefield.
“And expansion appetite from newcomers is
not strong enough.” He claims that a swath
of five year lease contracts nationwide will
terminate soon, and some of the typical retail
parks occupiers are pulling out of the Czech
market, like Giga Sport. Others have been
changing their concepts, reducing their units,
such as Albert hypermarkets or furniture and
carpet retailers. This will add to the current
5 percent vacancy. Redundant space will be
on offer for potential new tenants, making it
almost impossible for the developers to meet
CPI continues to invest aggressively in the retail park sector
the pre-lease criteria of the lenders. “Banks
usually demand 70 percent, but in some
cases even 100 percent pre-lease, which is
nearly impossible to meet in current market
conditions,” says Kristek. The retailers, on the
other hand, are trying without success to
open seven to ten units at a go, but insist
there’s a lack of new product to enter.
At the same time, in their struggle to grab
the largest possible piece of the pie, retail
park developers are considering smaller and
smaller towns, looking even at municipalities
of 10,000 inhabitants. “Such schemes of
3,000 sqm require local brands as occupiers.
But those are not yet mature enough to sign
five-year lease contracts,” says Kristek.
He counts 63 new retail parks in the pipeline
over the next two to three years, but warns
that not even half of them are likely to be
built. CPI, Immofinanz, Sallerova výstavba
and Intercora are among the strongest retail
park specialists in the country.
Prague highstreet
Two new deals have just gone
through on the Prague’s highstreet, to add two new brands to the retail mix
on Na Příkopě and Wenceslas in May: fashion
retailer Reserved and the high-end jewelry
store Pandora. Reserved, part of the LPP fashion group of brands, has built a wide presence
in the Czech market with shops in most of the
primary shopping malls (including Palladium)
Still, it took the retailer ten years to land the
right spot on Prague’s high street. Only recently the retailer succeeded to grab a 2,000
sqm unit in the newly reconstructed Wenceslas 9, above the McDonald’s restaurant.
The Reserved shop will stretch over two floors
- the ground floor and the first floor, with the
home furnishings brand Home & New of the
same group occupying the second floor. Reserved will keep its unit in Palladium as well,
and Tomáš Beránek, senior consultant on
Cushman & Wakefield’s retail team says the
brand, will be expanding carefully over the
next two years with the aim to win back its
pre-crisis total area of 5,000 sqm.
Pandora is a Danish jewelry brand which until
now has had a single shop, in Centrum Cho-
dov, but it’s now in the process of fitting out
a 100 sqm flagship store at the corner of Na
Příkopě and Havířská streets, opposite from
Zara. A magnet for the fairer sex, the company sells its unique jewelry in parts, enabling
women to make their own creations consisting of parts reminiscent of various places
they visit on their journeys. The pieces vary
from affordable jewelry to gold gems with
diamonds, says Beránek. Pandora will share
its downtown space with two other retailers,
and Beránek is currently looking for suitable
co-tenants. Other mall shops around Prague
could yet be opened.
June 14th 2012 | Prague | Jalta Hotel
A morning of future-oriented discussions on demand, financing and public policy
between top Czech and Slovak players in the industrial/logistics sector
For more information please contact:
Robert Fletcher | CEO | +48 506 074 042 | [email protected]
Zuzana Vodrážková | Sales Director CZ & SK | +420 603 264 921 | [email protected]
June 2012 Issue Focus on the Warehouse/Logistics Sector
Volume 18 | Issue 5 | May 2012
Since the Crisis
Includes the Top 50 Since the Crisis, CEE’s Top Industrial Developers: 2008 - 2012
CEE’s Top Industrial Developers
Developers: 2008 - 2012
CZK 150 | HUF 1900 | PLN 26 (8% VAT incl.) | RON 25 | € 5.90 | index 37332X
This issue is printed on 100% recycled paper
Czech Republic
Nova Karolina
beats the odds
Begun before the crisis, completed
during it, the opening of Nova
Karolina in Ostrava is a substantial
Nina Fibigerová
When Multi Development entered a tender
to re-develop the largest centrally located
brownfield of Karolína coal mine in the
downtown Ostrava, the Czech Republic was
still riding the wave the boom. Then, just
after a spectacular ground breaking party for
50,000, with a helicopter show, light show and
a rock concert on the 32 ha brownfield site, the
project’s financing collapsed, not long after the
Lehman brothers crash.
Restarting the project required building trust
between a new consortium of three banks,
along with 70 percent pre-leasing, during
some of the darkest days of the crisis. Three
Nová Karolina open at last
years on, however, Multi Development was
able to celebrate not just the opening of its
scheme Nová Karolína, but its sale to Meyer
Bergman and HOOPP in a transaction that
took place in September 2011.
The 58,000 sqm shopping center, the largest
to be opened at one time the country, was
essentially full when the crowds first poured in.
That’s thanks in part to the fact that in addition
to some significant newcomers, it features
the usual mix of tenants needed to make
any scheme successful in CE. Newcomers to
the northern Moravia region include Peek &
Cloppenburg, Reno, Quicksilver, Solomon,
Starbucks and Burger King.
It’s also lured some tenants away from the
Futurum shopping mall, located just ten
minutes away. “Others double their stores,
or say they would stay in Futurum only until
their contract expires,” says Rostislav Veselý,
an associate partner in Cushman & Wakefield,
which brokered the leasing. Tomáš Beránek of
the same retail team warns that he opening
of Nová Karolína could harm high street
shopping in Ostrava, pointing to McDonald’s
and C&A who left their flagship shops on
Masaryk square.
Outlet for sale
Prague Fashion Arena is
up for grabs for €75m. The
British agency GVA was
chosen to broker the transaction for the
owners, TK Development and LMS Outlets. It The successful outlet mall in Prague
Šterboholy, with over 100 factory outlet
stores and 25,000 sqm of retail space,
produces annual rent revenue of €6.2 m,
according to the economic server e15.
Fashion Arena was opened in 2007, with
the second phase added three years later
at a cost to the developer CZK 1.6bn.
ECM Real Estate
ECM Real Estate Investment is trying to offload
its projects and buildings to be able to
Ronald Dasbach, the the Director of Multi
Development in Central Europe, is convinced
that in the long-term, the project will benefit
Ostrava, as it will strengthen footfall in the city
center, which tends to be dead on weekends
and evenings. “A city which has no heart, has
no soul,” he says. Not that everyone is excited
by the project’s design, as some locals have
nicknamed the Rem Koolhaas-designed
building as the New Fukushima. Unconcerned
at the long-term nature of such issues,
Dasbach smiles as he shrugs off the criticism:
“We think any publicity is good,” he says.
The shopping mall stretches over three floors,
with an Albert hypermarket and services on
the first underground, a mix of fashion on the
ground floor and the first floor, and a Cinema
City multiplex, food court, sports stores on the
second floor.
While it’s a huge undertaking in itself, the
shopping center represents just the first phase
of a larger re-development of the area. The
remainder of the scheme, carried out by a
consortium of developers including Gemo
(building a 220 unit residential component)
and PasserInvest (a 23,000 sqm office building)
is scheduled for completion in 2016.
pay back part of its debts. Knight Frank
has been appointed to broker the sale
of Varenská Office Center, a 15-storey office building in Ostrava. The B-class refurbished 1970’s building is nearly fully
leased and produces rent revenues of
about CZK 25m. The other item on the list
is ECM’s flagship residential project City
Epoque. The Czech-based investor CPI is
among the potential buyers.
This issue is printed on 100% recycled paper
Eduard Zehetner:
Control is better
You can move forward on your Jindrišská project without
financing, so you don’t need a pre-lease. But is it worth it to
use so much equity of your own equity to build?
We have enough equity, we generate enough money to start
those developments and we just seize opportunities. If you
have to wait for financing, especially on the development side,
it’s a waste of time, and sometimes it’s a waste of opportunities.
It forces you to close deals that aren’t very advantageous. You
might lose 10 - 20 percent on the lease and that reduces the
value of the investment.
The argument used to be that you could get a better return on
equity by leveraging up...
But you have to compare what the rate of the return is, and
don’t forget that sometimes these are pre-crisis acquisitions. So
sometimes the cost of debt is almost as high as the cost of equity.
It gives you so many degrees of freedom to improve the overall
performance of the rest of the performance of the investment that
we chose this approach. And as soon as we get cheap or suitable
financing, we’ll just kick in with the debt. But the banks these days
are much more reluctant to give development loans and they want
to have a much higher stake from the equity provider than before.
How much of your business is made up of dealing with the
company’s past investments? Old projects, old acquisitions,
old mistakes?
I started in November 2008 and for the first two years I personally
was dealing almost entirely with the past. Then we got our
settlements and took care of most of the things from the past,
though we’re still working on some. With a project like Jindrišská,
you’ve spent a certain amount of money on it already. It’s been
spent. At that point you have to look forward and ask yourself what
you have to spend and what’s the return on it. It’s very simple.
Historically, in Prague you were involved in a number of joint
ventures like this one, sometimes 50-50 deals. Why did you
decide to take over the projects on your own?
We’ve done this with our deals with Lordship, except in the case for
Na Příkopě where the process was already further advanced. It’s a
strategic decision. This 50-50 structure was a pre-crisis approach,
but now we have a post-crisis approach.
Czech Republic
Immofinanz‘s CEO says investors
need to seize their opportunities as
they arise
From a managerial point of view it’s much better to have control
over the project. We feel responsible to our shareholders. Basically
there’s a mismatch between pure developers who don’t have money
and people like us who have money but have lacked, in the past,
development experience. We have acquired the development
experience now, with a tremendous team within our company and
we’re now able to do the entire thing ourselves.
That was the thinking behind the way you took control of the
development company Adama in Romania?
The original idea, and it was from before I joined the company, was to
form an investorship in which Immoeast was the only one who had
a business angle with it and the others were financial investors like
Morgan Stanley, Lehman, Tiger Global and the Israeli founders. In the
meantime Lehman collapsed and the market collapsed, and we had
our stake.
We have a huge land bank outside Adama in Romania which we
have to develop over time, and this might take us 10 years to do. So
we made a proposal to our financial partners there in which we told
them that we would take over their stake, along with the team and the
Czech Republic
Immofinanz begins
on Jindřišská office
Immofinanz Group has just begun its first
development in Prague after ten years on
the market as a property investor. Of the
three key projects in Prague 1 Immofinanz
in which it acquired in a 50:50 partnership
with the developer Lordship (Jindřišská,
Jungmannova and Na Příkopě), Jindřišská
16 is the first it’s using to test the Prague
Immofinanz is building its
downtown office scheme, not just
talking about it
Nina Fibigerová
the building can accommodate people
who choose to bike to work. Construction
of the project, designed by DaM architects,
started recently, with completion
scheduled for July 2013. The total cost is
estimated in the vicinity of €24.6m.
Immofinanz hopes to take advantage of a lull in new office supply
“In 2011, there were only three office
buildings that started in Prague, so we
think the timing is right for a new prime
product to come on the market,” says Ralph
Bezjak, head of commercial developments
for Immofinanz. “Also, record leasing
activity in 2011, with more than 120,000
sqm of take-up, has sent vacancy down to 8
percent in the Prague city center.”
The combination of a prominent
historical façade, modern construction
and progressive technologies has been
designed so that the building can be
LEED Gold certified. The atrium features a
vertical garden with over 5,000 plants and
Further investment
growth not guaranteed
Investment activity in the
Czech market achieved its second highest
ever volume since 2007, totaling €2.2bn.
But a drop in investment volumes could
still result from the increased costs associated with investors being forced to use
their own equity and a lack of available
loan financing, warns the head of investment at DTZ Ryan Wray. “The banks have
increased debt margins by 300 bps and
focus on minimum debt service cover ratio 1:1.25, while investors aim at higher
returns, strong covenants and long term
The banks are currently open to finance
investment transactions across all segments of commercial property. But conditions depend on the quality of the
transacted property, as well as the investor’s activity in the sector. “It’s possible
to secure financing even for properties
in secondary locations. If there’s a lease
contract for at least three years and the
debt service cover ratio is at 1.25, the
banks will offer adequate financing conditions,” says Wray.
Yields should remain stable in 2012, according to DTZ, ranging from 6.25 and
6.50 percent for prime office, 6.00 – 6.25
percent for retail and 8 percent for industrial with long term lease contracts with
good quality tenants. “Uncertainty about
the economy slowed down activity at the
beginning of the year. But we expect the
closing of a few larger transactions by
mid-2012,” says Wray.
W ilson and Par tner is pleased to announce that is has been aw arded
“Law Firm of the Year” for the third year running in the prestigious
CIJ Awards 2011, Czech Republic.
We would like to thank all our clients and business partners for their
co-operation and suppor t in 2011 and to w ish them all a successful 2012.
Law Firm of the Year
Wilson & Partners
CO R P O R AT E / M & A
Czech Republic
Panattoni completes BTS scheme for
Assa Abloy
Panattoni Europe completed a 10,000 sqm BTS facility for Assa
Abloy in Týniště nad Orlicí in the Czech
Republic. The project is a stand alone
scheme located 20 km from the center of
Hradec Králové in Eastern Bohemia. The
tenant, Assa Abloy Rychnov is a member
of the Swedish based Assa Abloy Group, a
global provider of door opening systems.
The company will use the newly built
warehouse as a production facility supporting the growth strategy of the automotive market brand Facea. The facility
was completed seven months after the
signing of the contract for the project.
Assa Abloy’s new BTS plant
Czech retail growth
Retail revenues in the Czech
market have increased by
just 1.3 percent, a slight slow-down after December’s 1.6 percent rise. Cars and
fuel topped the list of items on top of the
growth list, while food sales dropped significantly. The economic daily Hospodarske
noviny quoted UniCredit Bank analyst Pavel
Sobíšek as saying that the number of work
days affected the results for the month, but
said there was real cause for concern. “Private consumption is stagnating or slowing
down a bit,” he said. Non-food has shown
more positive results, thanks to the new
years discounts and sales.
It’s getting tougher in Czech malls
Masaryk station
planning to clear
way development
Changes to the master plan
that would clear the way for development of the Masaryk railway station in
the central Prague are to be approved
this summer, according to the City of
Prague’s planning department. Railway operations will continue, however,
meaning not all the land can be used for
commercial purposes. Florenc bus terminal will be rebuilt, as a result, and the
streets Na Florenci and Pernerova are to
be connected. A new park will stretch
from the Museum of the City of Prague
to the Vítkov hill, while Opletalova and
Na Florenci streets will be connected by
a subway or foot bridge. The post office
building on Hybernská street will be preserved as a cultural monument.
Bids being lined up
for Czech nuclear
plant blocs
A Russian-Czech joint venture competing to win the contract to
build two new reactors in the Temelín
nuclear power plant sees taking local
contractors on board as a way to win the
tender. Rosatom and the Czech based
nuclear engineering company Škoda
JS are to sign cooperation agreements
with ten Czech and Slovak companies,
writes the news server Czech Position.
US-based Westinghouse and French
Areva are competitors in the CZK 150bn
tender to build the reactors for partially
state-owned power company ČEZ site in
South Bohemia. July 2 has been set as the
deadline for the bids, with the winner to
be announced by the end of 2013.
Czech court gives
ECM restructuring a
The developer ECM will be given a chance
to reorganize, the Prague City Court
ruled yesterday. Both the developer and
its creditors had been waiting for a decision on the question since November.
ECM has been in bankruptcy since spring
last year. Astin Capital Management was
given 120 days to provide a restructuring plan for ECM, or to announce that
it doesn’t intend to do so. Astin Capital
supported restructuring plans as the best
way to solve ECM debts since the very
beginning, while other creditors, such as
Glancus Investments of PPF Group has insisted on liquidation.
KCP gets state Czech
to cover bills again
Congress Center Prague
(KCP), haunted by rocketing
debts dating back all the way to the 2000
summit of the International Monetary
Fund and the World Bank, plans to launch
another tender to sell its assets. For now
it has reached agreement with its owner,
the City of Prague and its guarantor, The
This issue is printed on 100% recycled paper
Ministry of Finance that the €3bn in interest payments for 2012-13 will be paid by
the state.
The properties, which include a Holiday
Inn hotel, Business Centre Vyšehrad and
the land in the direction of Vyšehrad castle, will be offered for sale individually. The
City of Prague will keep the main building
called Palace of Culture, which should
function as a congress hall, and land in the
direction of Pankrác. The City hopes proceeds from the sale will surpass CZK 1bn.
KCP still has to pay back CZK 2bn by 2014,
CZK 300m of which it owes to Komerční
Dachser to invest in
logistics hub
Czech Republic
Document signing for Heberger
Dachser has chosen a general
contractor to build its new
logistic hub and headquarters. The construction company Heberger CZ has signed a contract for the building having won a tender for
the order. It’s to build a cross-docking building on 4,000 sqm in the town of Kladno, 20km
from Prague, along with an office building
to accommodate the new headquarters of
Dachser Czech Republic, including parking
areas and further infrastructure. The project
is estimated to represent an investment of
CZK 230m. The new complex is scheduled for
completion in autumn this year.
URBIS INVEST: Top players discuss
key topics at IBF Brno
Investment opportunities and environmental protection
As an international exhibition of investment opportunities, business and development in the region,
URBIS INVEST presents a unique overview of investment opportunities and support for businesses not
only in the individual regions from all over the Czech Republic but from other regions in Central and
Eastern Europe. The exhibition takes place from April 24 - 27 at the same time as URBIS TECHNOLOGIES
INVIBRNO, and the International Building Fair Brno.
Renewal of historic monuments and church structures
This year’s opening conference will deal with the issue of the reconstruction of historic and church
monuments from a wide range of viewpoints. On a theoretical level, legal issues, financing possibilities
and church property management will be discussed, while the topics for the more practical portion
of the discussion will be technical construction information and the actual realization of monument
reconstruction projects.
Innovation and technology in regional development
This is a traditional part of the accompanying program for the International Exhibition on Investment, Business and Development in the Regions that’s organized by
the Association of Innovative Entrepreneurship in the Czech Republic and by the Czech Association of Development Agency. At this seminar, examples of innovation
strategies from Central Bohemia and the Usti Region will be presented. Other topics will include innovation potential in the Czech Republic, its technology profile as
well as the Innovation of the Year 2012 prize that’s to be awarded.
The exclusive source for exhibitor news and trends
Do you want to know what to look forward to at the stands of the individual exhibitors? Visit our website at to find investment opportunities
in various regions, innovationas and ideas to improve work in your field, or invitations from individual company stands.
Get your exhibition ticket cheaper!
Use the on-line registration form on our web page to get your tickets for the URBIS INVEST, URBIS TECHNOLGIE, ENVIBRNO and the International Building Fair Brno on
sale. After answering a few identification questions, you’ll be sent an electronic confirmation of your registration. If you present this at registration booths at the Brno
exhibition grounds, you will be given a valid ticket. Registration is already underway on the exhibition’s website.
Further information is available at
Colliers International‘s latest retail
report suggests this year is unlikely
to live up to 2011
Retail market
activity slows
Robert McLean
of a former multi-level automobile plaza
in the 3rd district.
There can be no doubt but that
Hungary’s retail property sector has
been bearing the full brunt of the
economic crisis. There could be few
more potent symbols of the lack of
depth in the country’s economic
potential than the fact that there were
just three new shopping centers opened
last year, one of these being the 6,000
sqm Europeum on Blaha Lujza tér by the
developer Ablon. The other two were
far more weighty: The Koki Terminal, a
47,000 sqm scheme at the end of the
Metro 3 line in Pest, and ECE’s Arkad
Szeged, a 41,000 sqm shopping center.
When these projects completed, writes
Colliers International in its latest retail
report, they left very little development
waiting in the pipeline: Wing is working
on a 7,000 sqm neighborhood center in
Budapest’s 12th district called Hegyvidék
Center and another 11,000 sqm
neighborhood center will be created out
The first weighty addition to Hungary’s
retail market will have to wait for ECE’s
expansion of the Árkád shopping mall,
but the new 20,000 sqm extension isn’t
scheduled to open until spring 2013.
Meanwhile, the longer an agreement with
the IMF and the EU drags out, the less
confidence investors as well as retailers and
consumers will have in the country’s longterm economic stability. This, warns Colliers,
will likely result in downward pressure
on rents. “A successful agreement would
help anchor expectations and economic
confidence for the next few years, increase
investors’ and brands’ willingness to enter
the country and also lend support to the
Hungarian currency, the depreciation
of which has weighed heavily on retail
Change in stock over time
Mln sqm
Specialised Shopping Center Stock
Traditional Shopping Center Stock
Source: Colliers International
sector participants.”
This year is being seen as a watershed for
the country’s retailers, with many already
reported to be teetering on the edge of
failure. Retail developers will be hoping
that the exit from the Hungarian market
of ElectroWorld, Jeans Club, Schlecker
and Nordsee isn’t just a taste of things
to come.
“On the flip side, there have been
numerous new brands entering the
market as well, taking advantage of
relatively low rents and hoping to be
in a good position to capitalize on the
inevitable recovery when it comes,”
says Anita Csörgő, Director of Retail
Agency at the Hungarian office of
Colliers International. “New brands last
year included Debenhams, Max Mara,
French Connection, Hard Rock Café and
Digidog, while brands such as Müller,
Starbucks, H+M and the Inditex Group
companies continued their expansion in
the country.”
What will be reassuring for owners of
current landlords is the rule passed last
year blocking the construction of new
retail developments of more than 300
sqm. This is not expected to impact
projects that had managed to secure
planning already, but it’s likely to have a
stabilizing effect on rents in the midterm as the scope for new competition
has suddenly been greatly reduced.
Nevertheless, Colliers expects prime
rents on locations like Váci utca and the
more successful shopping malls to fall
between 5 - 10 percent in 2012.
RPMG Events 2012
CIJ Awards Hungary
(December 13)
CED Invest CR
(March 29)
CIJ Awards Romania
CEDEP Residential
Conference CEE
(December 6)
(April 17)
CIJ Awards Slovakia
(December 4)
CIJ Residential Awards
(April 17)
CIJ Awards
Czech Republic
(November 22)
(April 25)
(June 6)
CIJ Awards Poland
CIJ Golf Tournament
(September 5)
(November 8)
(September 19-20)
Your Event Platform for the CEE Region
For further information please visit or
Dorottya Udvar signs
Rickitt Benckiser
Reckitt Benckiser, a global
provider of household,
health and personal careproducts
has signed a 1,400 sqm office lease at
Dorottya Udvar. The Hungarian affiliate
of the company has in fact already moved
into the complex, located in south Buda.
Jake Lodge, Head of Asset Management
CEE at AXA REIM says the new company
fits with the status of other tenants in
the building. Judit Varga, Head of Office
Agency at CBRE Budapest added: “This
move presents an upgrade in Reckitt
Benckiser’s accommodation in many ways.
With this long term contract the company
will not only occupy a larger office area
than at their previous location, but can
also benefit from the green, quiet and
inspiring working environment Dorottya
Udvar offers.”
Dorotya Udvar
Will Hungary do the
IMF deal?
professionals with a stake
in Hungary‘s investment market have been
hoping that Hungary would have started
laying the groundworks for a deal with the
International Monetary Fund as soon as
possible. There‘s widespread concern that if
a deal isn‘t forthcoming in a relatively short
period of time, and if Hungary doesn‘t start
producing signals that it intends to be a willing,
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various mobile devices from a free application
constructive partner within the European
Union, investors will be likely to give the country
a wide berth. With the current addiction to core
assets governing the decisions made by real
estate funds, and the banks that fund them,
it‘s simply not helpful to have the country
seen as a stubborn EU member, intent on
maintaining its image at home. Recent reports,
then, that Hungary is unwilling to back down
on a series of constitutional changes that go
against the European grain, will not have
been seen as steps in the right direction. The
IMF now appears unwilling to compromise on
its demands that Hungary begin taking steps
to ensure its macroeconomic stability. Without
such a deal, however, many believe that the
unrelenting force will increasingly bring itself
to bear on the country‘s fragile standing,
making it ever more difficult to refinance itself.
It‘s difficult to imagine investment deals going
through if talk of a potential Hungarian default
became commonplace.
This issue is printed on 100% recycled paper
Mercedes opens
Kecskemet plant
A Mercedes factory was opened in March
in the city of Kecskemét, four years after
the German automobile manufacturer
announced it would be investing in the
country. In fact, a soft launch of the factory
has already been carried out, as more than
100 Mercedes B cars were produced in
January and have passed inspection by
Daimler engineers. Both A and B series
cars will be produced at the new plant,
which represents an investment of around
The new Mercedes plant
The fourth mobile service
provider, MPVI Mobil Zrt.
has paid the HUF 10bn fee for the most
recent license to be granted by the
Hungarian government. The company
was established primarily with capital
from the Hungarian Post Office. After the
results of the tender granting the license
to the state institution were announced,
the country’s other three operators
lodged complaints, questioning whether
The arrival of the Bavarian car
manufacturer is a welcome relief
from recent problems
Robert McLean
€800m. Politically, it’s a good move for the
country’s government as roughly 3,000
jobs are expected to be created, and the
plant should end up producing something
on the order of 1 percent of the country’s
entire GDP.
In addition to the Mercedes plant, there’s
been a flurry of activity among car
part suppliers as they hurried to set up
operations in close enough proximity to be
able to serve it. Up to 120,000 vehicles per
year should eventually be produced in the
new factory.
Sounding an unusually cooperative note,
prime minister Viktor Orban welcomed
the new investment by declaring that
the factory “isn’t an investment, it’s an
alliance.” There are certain to be other
foreign investors in the country who
would be interested in words of alliance. A
stiff new tax was placed on the Budapest
International Airport, one that was set
to triple the amount of revenues its
owner Hochtief would end up paying
Post office takes
fourth mobile license
the winner should even have been
allowed to compete. This appeal was
rejected, clearing the way for the post
office to pay the required fee.
Invitel expands at
In a deal brokered by Eston International, Invitel
has expanded its offices at Terrapark,
where it’s a long-term tenant. The announcement of the deal was made only
recently, though the company was able
on an annual basis. There was also the
case in March of the French company
Suez Environment and RWE who were
essentially pressured into giving up their
stake in the waterworks company that
serves the Budapest market. Suez and
RWE originally paid HUF 16.5bn for their
minority share in the company, but will
receive just HUF 15.1bn in what appears to
be an enforced buy out. It‘s a deal the city
will pay for using loans and by employing
payment from other utilities controlled by
the city.
Orban will hope to have been at his most
persuasive later in the month, when he
held talks in Munich with top executives of
Audi on the construction of a new factory
in the city of Gyor. One of the results of the
meeting was an agreement to establish
a task force in charge of raising the level
of worker expertise. Construction on the
€900m facility began last July. Orban also
met with representatives of Siemens and
was scheduled to meet with Bavarian
minister-president Horst Seehofer.
to move into its new space at the beginning of the year. Terrapark took the
D13 wing at the office complex, which
belongs to Raiffeisen Real Estate Fund.
Fit out for Invitel was completed as part
of the deal, though the terms were not
made public. The company will have access to a 100 seat auditorium that’s been
built, and which will be accessible for all
tenants. Located outside the city near
the M1 and M7 motorways, the office
park is useful for companies who prefer
quieter, suburban locations.
Two Great Events in One Day
Residential Conference CEE
April 17th 2012 | InterContinental Hotel | Warsaw
Confirmed Speakers:
Bartosz Puzdrowski
Wojciech Okoński
CEO and President
of the Management Board
Grupa Kapitałowa ROBYG
Joanna Iwanowska
Sales Executive
UBM Polska
Alina Necula
Marketing Manager
Adama Group
Laurent Tirot
Bouygues Immobilier
Kazimierz Kirejczyk
Andreas Holler
Member of the
Executive Board
Adama Group
Nicholas Pejacsevich
Managing Director
Midas European
Andrzej Biernacki
Sławomir Horbaczewski
Vice President
Marvipol S.A
Henryk Urbański
President of the
Management Board
Budimex Nieruchomości
Member of the
Management Board
Budimex SA
Krzysztof Czerkas
Member of the
Management Board
BRE Bank
Robert Chojnacki
President of
the Board
redNet Property
Karen Hartley
Mantaren Properties
Robert McLean
Editor in Chief
CIJ Journal
Media Partners
For more information about attending contact:
Marta Niezgoda | Sales & Events Manager PL | +48 22 848 60 21 | [email protected]
April 17th 2012 | InterContinental Hotel | Warsaw
Categories Awarded in 2012
• Best Single Family Estate Development
• Best Affordable Multi Family Development
• Best Luxury Multi Family Development
• Best Green Residential Development
• Best Holiday Home Development
• Best Residential Developer
• Best Residential Sales Developer (Internal Sales)
• Best Architectural Design
• Best Residential Construction Contractor
• Best Interior Design (Common Areas)
• Best Development Web Site
• Best Print Advertisement
For more information about attending contact:
Marta Niezgoda | Sales & Events Manager PL | +48 22 848 60 21 | [email protected]
REAS: Lower prices
have benefited
residential market
A data release in early March from the
Central Statistical Office confirmed that
Poland reached a buoyant GDP growth rate
of 4.3 percent in 2011. This was the highest
result of all countries in the European Union,
except for the small economies of the three
Baltic States. Likewise, the Polish residential
market put in a strong performance in 2011.
Last year brought an increase in transactions
on the primary residential market compared
with 2010 and was characterized by
relatively stable quarterly sales levels. At the
same time, a gradually decreasing number of
new projects launched for sale by developers
translated into a stabilized market offering
in H2 2011. Crucially, though, the bottom of
home prices lagged behind new apartment
sales and housing starts.
In terms of demand, last year can certainly
be labeled as a successful period. In Warsaw,
by far Poland’s largest city and residential
Trio Apartamenty
Flexible developers and banks
kept the market moving in 2011,
says Maximilian Mendel (REAS)
market, almost 11,600 flats in developer-built
investments found buyers, which translated
into an increase by 9 percent compared to
2010. At the same time, the total number of
new residential units sold in the six largest
residential markets in Poland (Warsaw,
Krakow, Wroclaw, the Tri-City, Poznan and
Lodz) increased by 8 percent, year-on-year.
However, a look at the various markets
reveals contrasts.
Double digit growth in demand was noted
in the Tri-City area of Gdansk, Gydnia and
Sopot and in Krakow as well, whereas
demand in Poznan and Lodz fell compared
to 2010. The total sales volume in the six
metropolitan markets analyzed in 2011 was
the second highest in the residential market’s
history, only beaten by the record-breaking
year 2007. However, back then demand was
strongly driven by CHF denominated loans
and by speculative investment demand,
while 2011 was dominated by end buyers
with more sustainable mortgage products.
The overall positive developments on the
demand side can be explained by several
factors. First and foremost, we observed
across the board price drops for dwellings
launched for sale, for those that were sold,
and among those currently on sale. Thus,
more favorable price levels have increased
the level of interest of prospective home
buyers and their readiness to purchase.
Another factor that supported sales was the
introduction of a better-adjusted market
offering. In particular, developers supplied
the marketplace with apartments that were
considerably smaller than those launched
during the boom years. As a consequence,
total apartment prices decreased, which
translated into an improved affordability
In addition, in the first half of 2011,
mortgage lending conditions were relatively
reasonable and helped boost sales. However,
lending conditions for the key target groups,
i.e. young families, gradually deteriorated
during the year and were less favorable
at year’s end. Interest rates increased,
while banks significantly limited new
loans denominated in foreign currencies.
Moreover, rules and price thresholds of
the ”Family on Its Own” program changed
considerably in the beginning of September,
limiting both the scale of apartments as well
as the number of households eligible for the
privileged mortgage loans.
Compared with demand, the supply side
was even more dynamic in 2011. The
number of residential units launched
This issue is printed on 100% recycled paper
in the six major Polish markets totaled
approximately 37,500 dwellings throughout
the year. This converts into a growth rate
of around 21 percent year-on-year. In fact,
only the record-breaking year 2007 saw a
larger number of units introduced to the
marketplace in Poland’s largest markets.
During 2011 developers focused their
activities in the largest agglomerations and
significantly limited operations in smaller
markets. By the end of 2011, the volume of
the market offering surpassed 48,000 units
in the six analyzed markets, of which Warsaw
alone accounted for more than 18,000
dwellings. Thus, the offering was 25 percent
higher than in 2010. The vast majority of the
supply came from apartments in projects
under construction, while the offer of
completed yet unsold units comprised some
10,500 units, a share of 22 percent.
In contrast to growth in demand and supply,
prices continued to fall throughout 2011.
It’s surely true to say that the decrease in
prices supported growth in demand and,
in turn, also an expansion of supply. Price
reductions and promotional offers were
among the major demand drivers in 2011,
besides supplying housing units that better
matched buyers’ expectations. The average
prices in the six analyzed urban areas
decreased nominally by about 5.7 percent
which meant a real price decrease, bearing
in mind that the annual average CPI reached
4.3 percent. Residential prices decreased in
several ways. Prices in the market offering fell
overall thanks to decreased prices among
flats in projects that had been on the market
for an extended period of time, and due to
cheaper, new supply coming to the market
over the last year. Prices of new units just
launched for sale are10 percent cheaper,
on average, than the average price for the
whole offering. But the pace at which prices
are falling is decelerating. Due to better
adjusted project-mixes, developers do not
necessarily need to reduce square meter
price expectations as much as beforehand.
The market outlook for 2012 is hardly an
optimistic one, and there’s a correlation
with the gloomy macroeconomic forecasts
being put out by the Polish government
and private sector analysts.The predicted
economic slowdown is likely to impact the
residential sector through inhibited growth
in wages and higher effective taxation.
Another integral factor for the market’s
development is affordability and accessibility
to mortgage loans as well as the readiness
of prospective home buyers to go into
debt. The consequences of the so-called
Developers’ Act [increasing developer
responsibilities to its customers] are likely
to be a drop in sales before the law comes
into effect, followed by an increase in the
second half of the year. Another effect of
this law could be an increased number
of projects launched for sale until before
April 2012, reinforced by concerns about
unfavorable changes in the lending policies
of Polish banks. On the positive side, the
current phase of the crisis has not come
as a surprise, the way it did in late 2008.
Banks and developers have been preparing
themselves for difficulties. Projects are
overall better-adjusted to households’ needs
and financial abilities, and developments
are nowadays smaller and phased into
stages. Then again, banks have learned to
react more flexibly in crisis situations. On the
demand side, unregistered income streams,
savings and inter-generational support
may help cover the equity demands banks
are placing on consumers to be eligible for
mortgages. To summarize, there are again
many offsetting factors that will impact on
the Polish residential market this year and
it can be expected that consolidation in the
development sector will continue.
R E A S | Residential Advisors
Maximilian Mendel
Associate Director,
CEE Research & Advisory, REAS
[email protected]
REAS has specialized on residential market research, development consultancy
and capital market services since 1997, cooperating with developers, banks,
investors and other players active on the market. Having an own database
that features vast information on primary market projects allows REAS to
provide advisory services, valuations and long-term forecasts regarding various
residential markets within CEE. In 2007, REAS became a partner with Jones Lang
Hines defends
Krakow residential
Hines has launched its first residential
scheme in Kraków, called Apartamenty
Novum, located 1,500 meters from the city’s
central square. The 26,000 sqm first phase,
to be delivered by 2013, features buildings
of between four and nine storeys and is
expected to cost around PLN 170m (€41m).
The investment, however, aroused criticism
among some of Kraków’s architects, because
it’s designed as an enclosed enclave. This
conflicts with the plans of a previous investor
in this part of the city, near the main railway
station, Opera Krakowska and the Kraków
University of Economics.
But as Wojciech Rumian, managing director
for Hines, told CIJ, it‘s his customers that
expect to have this area fenced off. “If our
customers considered it a flawed concept,
we could easily back away from it,” he says.
Until now, he points out, the land has been
Earlier plans for „New City“
zone in Krakow are complicating
matters for Hines
Marcin Śmietana
used as an informal parking place or a place
to dump trash. As there is no master plan in
place for this area, the land use permit Hines
owns is binding.
For Gajewski, the other question is whether
the end result of the development will be
buildings with a high degree of architectural
quality, and a variety of functions.
Piotr Gajewski, chairman of Kraków’s unit
of Association of Polish Architects, says the
critics are wrong to complain. He points
out that the investor bought the land and
is proceeding with the residential scheme
according to the valid land use permits,
rather than building a waste incinerator or
some similar similar investment.
Rumian also says that Hines is not to blame
for the failure of Kraków’s earlier concept
for a so-called ‘new city’, embodied in
2003 by the ambitious plans of Tishman
Speyer Properties. That company proposed
redeveloping 20 ha of land around the
railway station, all of which would have been
turned into public space. Rumian says that
many people in Kraków continued to dream
that this plan could be realized. At the same
time they got used to the temporary state
of affairs on undeveloped plots near the
station, like the one Hines owns, and there
for hostile to new ideas.
“Besides,” he says, “I participated in talks
concerning selection of the land for a new
philharmonic hall in the city, and the plot
which Hines uses now was also considered.
Everybody decided, though, that this was
not an ideal location, nor this was an area for
particularly representative public buildings.”
Hines doesn’t believe it should be held to the investment plans of other developers
Hines bought the 4.8 ha plot in October
2010 from Tribeach (a company backed by
Irish and American capital), which itslef had
bought the land in 2005 from he Military
Property Agency. Through the transaction,
Hines also assumed control over Tribeach’s
land use permit, which makes possible a
flexible catalogue of possible development
types, including residential, office, services
or hotels.
“The company plans to continue with phase
II and III of the residential project, but it
could decide for other types of development
depending on economic conditions,” says
Rumian. The apartments are already on sale
with prices starting from PLN 7,800 (€1,800)
per square meter. Delivery is envisaged
for the end of 2013. In total around 400
apartments are planned, and underground
parking will provide space for 458 cars.
available on:
Warsaw Financial
Center on sale
Following a refurbishment
carried out by CA Immo, the
Warsaw Financial Center building is going
on sale. The owner expects to receive €230m
from the sale. Located in the heart of Warsaw’s CBD, it was completed in 1998 and has
long been one of the top buildings in the city.
CA Immo expects to offload the building by
the end of the year. The sale is expected to
attract bids from the entire range of investors
and funds now active in Poland, though the
daily Puls Biznesu claims that up to 100 lease
agreements need to be renegotiated.
Jeronimo Martins
profits hit by Biedronka expansion plan
The latest expansion of the
Polish Biedronka discount chain has seriously
affected Jeronimo Martin’s 2011 annual results, dragging profits to much lower levels
then forecasts had been suggesting. The
Portuguese retail group’s full-year 2011 net
profit came in at €340m, a year-on-year increase of 22 percent, while a Bloomberg poll
taken earlier this year predicted the figure to
be more on the order of €363.5m. JM ‘s sales
came to €9.8m, up by 13 percent in 2011. Jeronimo Martins, which was already struggling
with a slowdown in its home market, has focused increasingly on Poland, expanding its
Biedronka chain by 239 new stores in the last
three years.
Orbis in the black
Orbis Group has recorded a
65 percent rise in EBITDA in
2011 giving company a profit
of PLN 288m and revenues increased by 2.6
percent to PLN 718.9m. “The better y-o-y results can be attributed to, among many factors, the sale of assets. Thanks to the revenue
from these sales the company was able to
pay off all loans and liabilities and enjoy PLN
218.4m on its account at the end of the year,”
comments Marcin Stebakow, an analyst from
brokerage house BPS. Orbis Group recently
sold some of its assets including its stake in
Orbis Casino, part of its stakes in Orbis Transport, hotel Bristol in Warsaw and a couple of
assets in Tarnobrzeg, Płock, Kraków, Szczecin,
Kalisz and Kołobrzeg. The value of the transactions came at PLN 296m while its profit
grew to PLN 120m.
has been carried out from scratch, though
its style matches that of traditional postindustrial lofts, of up to 5.8 m in height. Four
buildings are to be constructed as part of the
Woronicza Qbik scheme with a total of 350
flats, including 183 two-storeys lofts and 167
single level units ranging from 36 to 206 sqm.
Ghelamco’s lofts are all new
Alfa Elektro renews
with Prologis
Alfa Elektro, a distributor of
electronics signed an extension with Prologis on its lease for 5,500 sqm of
warehouse and 300 sqm office space at Prologis Park Chorzów. Jones Lang LaSalle brokered the transaction for Alfa, which is part
of the French group Sonepar. According to
Leszek Darmoń, Alfa Elektro’s CEO, the lease
terms were considerably more favorable than
last time, and since he the park’s location has
proven to be excellent [it’s the largest distribution hub in the upper Silesia, with a total
area of 233,000 sqm, at the junction of A4
motorway] the company never sought any
competing bids from other park owners.
Ghelamco close to
Qbik completion
With the delivery of Ghelamco’s Woronicza Qbik modern
lofts in the Mokotów district Warsaw scheduled for June, the developer is offering to include finishing works in the price of the flat. It
didn’t reveal the name of the company that
would be carrying out the work, but hints
that it’s worked with the best developers on
the market for years. Ghelamco is offering its
customers two different interior styles for the
lofts: New Art and Romantic. The investment
Rank Progress tops
Rank Progress was ranked
first of the 17 developers
listed on the Warsaw Stock Exchange’s WIGdevelopers index when judged for income
growth and key financial indicators by Parkiet. The newspaper of the WSE was summing
up the financial results achieved in 2011 by
the leaders in various sectors. Legnica-based
Rank Progress was a leader among developers in a majority of the criteria, including
growth of operating income (119.6 percent),
sales profitability (103.5 percent), operating
margin (106.8 percent) and return on equity
(36 percent). It was second only to the developer Gant in net profits growth. In 2011, Rank
Progress profits amounted to over PLN151m
(€36.4m), a record in the company’s 15-year
history, and 67 percent more than in 2010.
This issue is printed on 100% recycled paper
approaching for
residential prices?
Analysts at the Home Broker agency are
predicting a turnaround in the residential
market beginning in 2013, and eventually
strengthening in 2014. Their view is that
the drop in prices will slow significantly
down to 0.9 percent on the primary
market within the next 12 months. This
would be a significant improvement
compared to the 6 percent drop that’s
taken place over the previous 12 months.
Meanwhile, on the secondary market,
prices fell by just half of that figure.
Home Broker analyst, Bartosz Turek, says
that lower prices on primary markets
are reflected not just in prices, but in the
fact that developers have been choosing
cheaper locations. “As prices on the
primary market have been falling faster
than on the secondary market, the share
of new flats in general transactions figure
is rising,” he says.
In addition, he predicts that tough new
restrictions on residential developers will
lead to fewer unfinished flats, meaning
a higher percentage of completed units.
Indeed, there’s a widespread expectation
PKP on the way with
the news investments
worth PLN 3.6bn in 2011, Polish State
Railways (PKP) announced it expects to
invest as much as PLN 8bn in 2012. PKP
PKL, which operates and modernizes
the railway tracks network, says it has
delivered 1,017 km of modernized tracks
last year at a cost of PLN 3.6bn while in
Will Poland‘s residential market
see real strengtening as early as
Marcin Śmietana
that the ban on developers using
customer deposits to fund construction
looks likely to weed out smaller, less
sophisticated developers, leaving the
larger players are likely to be able to raise
their own prices.
“A slowdown of developer activity will
depend on the banks’ wariness”, says Reas
associate director, Karol Dzięcioł. However,
banks are getting cautious with their own
retail clients, cutting back considerably
on mortgage loans. “The 10 to 20 percent
drop in the number of loans last year,
depending on the city, is significant,
even if it never translates directly into an
equivalent drop in demand,” says Dzięcioł.
According to Home Broker data, 3 out of 4
home sales use mortgage financing.
With roughly 50,000 homes still on sale
across Poland and no signals yet of a major
boost in purchasing power, the downwards
pressure on prices looks inevitable. “Home
Broker predictions may still appear right,”
says Dzięcioł indicating that 18 months
is usually how long it takes to come out
of bigger slumps. “If developers were to
2010 it renovated just 445 km. This year,
PKP intend to renovate 1,027 km of tracks
says Maciej Dutkiewicz, a spokesman for
Street View for Euro
Championship cities
Along with the upcoming
Euro 2012 football championships taking
place in Warsaw this June, the city is
freeze their activity and the demand came
back, developers might be unable to
accommodate it straight away. So in 2014,
with inflation falling according to forecasts,
nothing drastic happening to the European
economy or to the mood of consumers,
the scenario proposed by Home Broker is
Central Statistical Office data indicates that
the number of delivered flats in January
and February 2012 rose 54.3 percent
compared with the same period in 2011.
Over 25 percent more residential projects
were launched compared to the first
two months of 2011, and the number of
building permits was up 52.1 percent.
But Dzięcioł points out the just beginning
construction and putting flats on sale
doesn’t guarantee a scheme will be
completed. He also wonders if some
developers aren’t trying to kick off
construction before the tougher rules
for developers come into effect on April
29. After that point, they’ll have to set up
escrow accounts for customer deposits,
removing a potential source of equity.
to become one of the best mapped
capital. Google has just started its Street
View feature for Poland, that allows
people to have a virtual trip in five major
Polish cities: including Warsaw, Krakow,
Gdańsk, Wrocławia and Poznań. These
are the Polish cities hosting the Euro
championships this year. “A year ago we
asked the Poles to show us the places that
we should show on Street View,” says Artur
Waliszewski, Google Polska director.
Forget the old
standards for flats
A question of standards
Standard is a tricky term in real estate.
However straightforward and descriptive it
may be in the commercial part of the market,
it is far more undefined when applied to
residential property. Standard is at the same
time a highly flexible term, with individual
perception and emotional character playing
a leading role in the purchase decision
The most commonly used system for
categorizing multifamily dwellings uses
four labels: 1) low-end, 2) lower-middle,
3) upper-middle and 4) high-end. In my
view, this last category is poorly defined
and often misused, essentially because
it is much too narrow to reflect market
realities. On the other hand, I see a fifth
category of residential projects that can
quite confidently be categorized as “luxury”
as they adhere to classic definitions of what
the name implies: prime location, limited
no of units in project, quality of construction
and amenities, such as ceiling heights of a
minimum net 280 cm.
Today‘s clients aren‘t interested
in standard flats. They want a
“standard of living”
Joanna Iwanowska (UBM Polska)
Secondary competition
The new-secondary market has seen strong
growth over the last decade, and has tended
to add to the category confusion. While
many low-end projects are just 5 to 10 years
old, many have succeeded in defending their
position and, remarkably, their value. This
is possible in locations where infrastructure
(mainly communications) managed to catch
up to the ambitions of developers. Some
developers communicate a mixed offer of
‘flats and apartments’ in one project. This
sounds quite wishy-washy to native English
ears, but I would say that given the highly
non-homogenous market offer in CEE
markets this is often a fair way to describe a
unit mix.
What’s notable is that the new development
market nowadays dovetails even stronger
with the existing ‘old stock’ or ‘secondary
stock’. A crucial point, that Developers often
seem to miss, that the secondary residential
market provides just as much competition
as do other developers. A survey made by
a leading listing portal in one of the largest
Polish cities shows close to equal client
preferences in terms of the type of dwelling
they’d buy:
become more flexible. With this in mind,
such studies are experiencing a growing
margin of error than they were 2-3 years
ago, with variations of 7 to 10 percent. This
means that transaction prices are the best
way to establish pricing levels. Interestingly,
although transaction prices are now easily
available, developers along with projects
leaders and land owners often continue to
use listing data when doing their research.
Follow the market
Indeed, the core of the pool of potential
buyers are first-timers, typically upgrading
from old panel buildings to new
developments. It would seem obvious
therefore that volume-wise, it’s the
smallest apartments of between 35 sqm
to 45 sqm that are in the keenest demand.
Nevertheless, the truly best-selling and
most sought after are flats/apartments of a
versatile character. These are seen as a safe
investment bet as well, maintaining value
and relatively easy to rent out, or offload into
a liquid market. Function, in other words,
trumps both standard and size.
• (24.1%) either - or / no importance
Altogether it seems that the vast majority
of clients are now looking much more into
the ‘standard of living’ a dwelling provides
rather than at the ‘standard of an apartment’.
Transaction security is the next priority,
meaning in purchasing, and in the potential
exit. The hold time for younger clients is
estimated to be between 7 and 10 years.
It’s also worth noting that the majority of
analysis is based on listings prices. While
these prices are very helpful in showing
macro trends, after the fact, it’s error margin
is growing at the same rate as developers
Regardless the type of residential dwellings
on offer, or their standard, it is visible that
developers who actively continue their
activities are those flexible ones: both in
terms of market understanding and the
• (31.0%) new development market
• (44.8%) secondary market
This issue is printed on 100% recycled paper
sales offer itself as well as in the transaction
structure. Additionally, the company’s
ability internally to respond to an evolving
market is now of paramount importance,
which includes adapting to shifting legal
requirements. These are all components
of the developer’s corporate culture and
philosophy, and therefore of the reputation
of the company’s brand.
As mentioned, the changing market
environment includes also factors of a
legal and structural nature. The new Polish
developers law raises many controversial
points, however it’s reflective of a growing
tendency throughout the European Union to
tighten consumer protection. Like it or not,
we will see this tendency grow even stronger.
Future trends
In a competitive housing market, with
clients increasingly aware of their needs
and financing potential, just building the
right type of flat is no longer enough to
Hochtief’s Poznań branch
will be modernizing level
C of the No. 15 exhibition
hall within the International Poznań Fairgrounds. The plan includes a roof lifting
as well as the modernization of a 6,500
sqm of space hall along with the completion works, and the construction of
extendable grandstand seating. Hochtief
expects to complete work on the project
by November 2012.
The new Poznań Fairgrounds
guarantee a deal. Developers will have to
go further and make the actual transaction
process more comfortable for the buyer.
They therefore must think pro-actively about
customer convenience and must be attuned
to the shifting sands of the customer’s
comfort zone.
Since the CEE markets show traditionally
strong preference towards ownership over
renting, one of the foreseeable changes
might be a growing number of finished units
offered in the lower and middle end of the
market. The perception and understanding
of what’s usually called ‘developer’s standard’
will be different project-to-project and will
reflect only the philosophy of the particular
developer and the price segment, rather
than meaning ‘core and shell’.
For the next, say, decade, it will not only
be the development process that changes
and evolves. It is the product itself that
faces the greatest changes and innovations:
PKO BP hits record
Poland’s largest lender
PKO BP hit a new net profit
record in 2011 by ending the year PLN
3.8bn in the black. It’s though to be the
best result in the Polish banking sector
The result shows an increase of 18.4 percent compared to 2010, significantly surpassing analysts’ expectations. When it
comes to PKO’s fourth-quarter result, the
bank didn’t disappoint either, making a
net profit of PLN 952m in the last three
months of 2011.
That was an improvement of 9.7 percent
compared to the same period of 2010.
The bank expects to make even PLN
3.5bn in 2012, said Bartosz Drabikowski,
vice-president of PKO BP. The bank is to
make a decision on paying the dividend
in April or May. o
the product being a residential dwelling
or a service, such as rental housing, senior
housing, structured reverse mortgage
solutions to retrieve value of an older-stock
apartment, introducing building society
savings models, etc. When looking for new
sources of demand it’s worth noting that
thousands apartments fall out of use each
year, especially from the pre-war old stock.
This means that closing the proverbial
housing gap is definitely not the only driver.
With the largest demand for small-tomedium units, at the same time as the
vast majority of transactions are being
mortgaged, it’s important to track bank
lending strategies. The decreasing levels
of mortgage financing is of concern, yet
at the same time a big rise in the level of
deposits was also noted during last 24
months and cash transactions are back in
the game. Additionally, investment in real
estate remains the most popular form of
investment throughout CEE.
Korona Kielce mall
to be delivered in
Completion works are being carried at the moment at the Korona
Kielce shopping mall, with the developer
saying it expects to be handing over the
construction site sometime in the month
of April. Work on one of the main attractions, a swimming pool, has entered the
final stage, while the Multikino cinema
complex is 70 percent complete. The
grand opening of this 93,000 sqm project
is to take place in mid-May, delivering
160 retail and service units.
The investor, MGC Invest, recently
brought Media Expert on board with a
1,500 sqm store. The mall has attracted
a solid tenant line-up, with a list that includes brands like Zara, Reserved, Royal
Collection, Pull&Bear and Massimo Duty.
Warsaw’s Złote
Tarasy sold
With all the transactions that
disclosed this month, the
Złote Tarasy complex will attract the most
attention. A great deal of debate has followed ING Real Estate Development’s announcement that it had offloaded its 77
percent stake in its flagship investment in
Poland. Arguably the most popular mall in
Warsaw, it was sold for €475m to AXA Real
Estate and CBRE Group’s Property Fund
Europe (PFCE). Unibail-Rodamco remains
a limited partner in the 225,000 sqm commercial real asset through a previous transaction.
ING Real Estate said its exit had been
planned ever since work on the project
began 14 years ago, making this move just
the final step in the investment. ING Real
Estate CEO, Hein Brand, confirmed that
the company’s futures continues to be one
of reducing its exposure in the real estate
sector, and the decision to sell Złote Tarasy
mall is another step in this direction.
tail investment in the city of Bydgoszcz
is ready to kick off, as its project company Makrum Development has secured
a construction permit. Called Centrum
Makrum, the mixed-use project at Kamiennej and Sułkowerkisgo streets is
expected to deliver 56,000 sqm of retail
and service space to the local market
and should be the biggest retail investment in the region.
Marta Machus-Burek, company’s commercial management representative,
says the investor has already signed
three anchor tenants, who are expected
to open their stores in the fourth quarter of 2014. Leasing is underway, she
says, with new lease deals with fashion
brands due to be finalized shortly.
The 56,000 sqm Centrum Makrum
Aquarius scheme. Last month at MIPIM,
the developer signed a lease deal with
the IT company Tieto Poland for additional space at Aquarius, now underway
at the corner of Borowska and Swobodna Streets in the center of Wrocław.
Tieto has expanded its lease to 8,500
sqm, which means the building is 85
percent full, prior to opening. In effect,
the agreement made it possible for Echo
to launch the second phase of Aquarius
which is scheduled for completion in
September 2013. PwC has also taken
1,000 sqm in the building, which is to
provide 25,000 sqm to the local market.
The transaction amounted to €38.15m,
or PLN 185m in cash.
Echo Investment keeps expanding
Złote Tarasy
Echo signing for
retail and offices
MAKRUM to kick off
its scheme in Bydgoszcz
Makrum’s most recent re-
Echo has been busy of
late, signing deals for its
retail and office space, including a tenyear deal with with Real. The retailer has
agreed to open stores in four of Echo’s
shopping malls: in Tarnów, Jelenia Góra,
Piotrków Trybunalski and Radom. Real is
to take the place of Carrefour. Following
the acquisition of Polish Geant in 2006,
Real currently operates a chain of 54 hypermarkets across Poland, located in 36
Polish cities, giving 13,500 jobs. Meanwhile in Cannes, Echo representatives
were filling office space in its ongoing
Panattoni fills Lódź
Business Centre
The last free space at Panattoni Łodź Business Centre
was taken Damco Poland, which signed
a 4,300 sqm lease with the developer.
The global logistic operator has been
on the Polish market for 15 years. It joins
other tenants at the park like Delfarma,
DHL Forwarding, DS Smith and Ruch SA
companies in the two-building center.
Located the district of Widzew, Panattoni Łodź Business centre targets smaller companies, with minimum units of
1,600 sqm available. Cushman & Wakefield agency brokered the deal.
This issue is printed on 100% recycled paper
Oriflame in Mokotów Nova
Ghelamco’s office scheme
Mokotów Nova has welcomed Oriflame, which is taking two floors of
offices. In addition, it will occupy ground floor
space to be used for a showroom, an order
collection point, a service center for consultants and a training and conference center.
Oriflame sees its Warsaw office as a model
to be followed for subsequent offices the
company plans to open soon. “Tenants often
seek office space in Warsaw that is located
centrally or in adjacent neighborhoods,” says
Renata Osiecka, Managing Director at AXI
IMMO, which brokered the deal. “However,
regardless of the district, a key factor for most
customers is the availability of public transport. In addition, an important element is the
question of ecological solutions offered by
the building, and thus the potential for reducing operating costs.”
Oriflame chose Mokotów Nova
land, the engineering consultancy, which
will take the entire second floor, or 2,000
sqm. The second deal is with the business applications and systems integration company Qumak Sekom, which will
occupy 2,838 sqm of space at Gamma. In
March, Capital Park Group chose Erbud as
the general contractor for the building,
with construction scheduled to begin in
the second quarter of 2012.
Eurocentrum, by night
Following the conclusion
last year of a lease with Imtech for 7,000 sqm in the
Gamma building of its Eurocentrum office
complex, Capital Park Group has signed
up another two new tenant. This brings
the total leased space in the building on
Jerozolimskie Street in Warsaw to 11,383
sqm. The first deal was with Tebodin Po-
Size: 165,000 sq.m
MLP has convenient connections both with the centre of Warsaw and the main routes
linking Warsaw with other cities.
Size: 96,000 sq.m
MLP Tychy is situated in the Special Economic Zone. MLP Tychy is located on the
eastern outskirts of Tychy, about 3 km from the E-75 express road and road 44 junction.
Size: 102,000 sq.m
The plot is located in Koninko, 4.5 km from the A2 motorway, 1.5 km
from the ‘11’ expressway and only about 15 km from downtown Poznań.
Size: 302,000 sq.m
The estate is located between the road No. 760 and the anticipated
section of the motorway A-2.
Size: 250,000 sq.m
The property has a cumulate frontage of 514.5 m to DN4 – Oltenitei Road, divided in two
sub-frontages of 226 m on the right hand side and 288.5 m on the left hand side.
+48 22 738 30 10 • • [email protected]
Rental sector pays
dividends for
Stuck with apartments it couldn’t sell,
bought at the peak of the market, the
investment company Benevo rejigged its
basic business model and started renting
the units in 2009. Not only did this allow
the company to survive, but it’s hoping to
double the size of its portfolio of rental flats
over the next year. And while it’s acted so far
primarily as a buyer and property manager,
it’s hoping to branch out into development
as well.
Run by the Canadian businessman Michael
Topolinski, Benovo’s latest expansion of
its rental portfolio came in November
with the acquisition of 64 apartments in
the Cosmopolis project in Bucharest last
November. On a sleepy market, this made
for one of the largest deals of the year. Most
apartments are studios or one-bedroom
units, with prices starting at €38,000
(excluding VAT), giving the transaction a total
estimated value of around €3m.
Besides Cosmopolis, the company has
also held talks to buy another 30 units,
Reacting creatively to the crisis is
what Benevo seems to have done
after the market crash ruined its
original business plan
Amelia Turp-Balazs
but nothing has come of the idea as yet.
“Our strategy for this year is to add another
300-400 units to our portfolio, and we
are holding talks in regards to this with
banks and developers,” says Oana Ivan,
general manager of Benevo Homes Store.
She claims that the rental solution wasn’t
dictated by the crisis, and that the company
is determined to continue to develop
the project in the long-term. “It was an
opportunity that was presented by the
market,” she explains.
Benevo started its Romanian activities in
2006 by acquiring some apartments in
the Quadra Project, picking up pre-sale
contracts for 907 units in 13 new residential
compounds. “But then in 2008, the world
changed, so we had to change our business
model and re-evaluate our position on
the market with the result that in 2009, we
launched a rental scheme,” Ivan says.
It whittled down the number of units it
actually wanted to buy to just 240 and
managed to renegotiate many of the
Benevo latched onto its rental business almost by accident
acquisition prices. All were then put up
for rent. With the addition of the 64 units
completed in 2011, the group now manages
304 apartments, with an occupancy rate of
90 percent. Benevo offers fully-furnished and
equipped apartments, as well as services
such as property administration, from
the paying of bills to cleaning, repairs and
Rents in Benevo properties range from €250
for a studio flat to €600-€700 (VAT included).
“The rental market isn’t an easy one, as
we have to juggle to find clients while
maintaining the right rents which fit our
business plan and which allow us to offer our
tenants the necessary support,” says Oana
In terms of expansion, Oana Ivan says she’s
looking for high quality projects in Bucharest
that are at least close to completion that
have easy access to transportation.
She predicts apartment prices will continue
to fall in 2012, by 5-7 percent compared to
2011. “It’s difficult to predict too far ahead,
since the economic situation in Romania,
and what’s happening on the property
market, is connected to the general
international market. I cannot see any kind of
improvement for this year.”
Along with plans to open a residential
development department, Benevo also
has two retail projects: Victoria City, to be
developed together with NEPI, and Benevo
Retail Park, built on 77,000 sqm of former
industrial land that Benovo bought in
February 2012.
Which Developers will
have the strength of a
Lion and vision of an
Eagle to develop?
6th June 2012 | Bucharest | InterContinental Hotel
Confirmed speakers:
David Hay
AFI Europe
Andreas Lindelof
Shimon Galon
Ivan Lokere
Alinso Group
Graham Kilbane
Argo Capital Property
George Argentopoulos
Baneasa Developments
Robert Neale
Portland Trust
Stefan Oana
BlueHouse Capital
Sven Lemmes
AIG Lincoln
Robert McLean
For more information please contact:
Robert Fletcher
+48 506 074 042
[email protected]
Monalisa Musteata
Sales & Events Manager RO
+40 721 482 072
[email protected]
Media Partner
Conarg’s bet on
residential pays off
With less than 200 units to sell
from a 1,500 total, will Conarg
be content to wait on the
development sidelines?
Amelia Turp-Balazs
Last month, Conarg, the developer
of three major residential projects in
Bucharest, reported that apartments
in all of them had sold well, despite
the poor state of the local residential
market. Under the slogan ‘First home,
first owner,’ the local developer has
made use of what it claims is smart
marketing, good locations and
reasonable prices to convince clients
of the benefits of moving into their
projects. Less than 10 percent of
the units in Conarg’s three schemes
are unsold. That’s a remarkably
positive result, under the (economic)
The largest of the projects, Rasarit de
Soare, located in the east of Bucharest
near the Iris Shopping Center, is one
the developer marketed to the middle
class. Conarg invested over €60m here,
in 988 studios and one or two bedroom
apartments. Quadra 2, another Conarg
project, is located near a primary
student campus in Bucharest in Regie,
close to Politehnica metro station. The
developer targeted this project from the
very beginning at young families and at
students with low incomes, as the 226
studios on sale start at €35,500.
“At the moment, we have just 150
apartments left for sale in both projects,”
says Andreea Stancu, client service
analyst at Conarg Real Estate. She added
Conarg’s clients tend to be first-time home buyers
that last year they sold 200 units in
both projects. “We sold better than the
market average, but still less than we
would have expected,” she says. The
best selling units in terms of size were
studios and one-bedroom apartments.
To drive interest for the remaining
apartments, prices have been squeezed
down by an average of five per cent “for
certain units.”
“Our apartments sell at prices varying
between €900 and €1,000/sqm,” Stancu
explains. Most of his clients are first-time
home owners, and have made use of the
government’s ‘First home’ mortgagesecurity program.
Stancu claims that what has made
Conarg’s projects sell better than the
market average is the company’s use
of smart and visible marketing. In the
case of Rasarit de Soare, the developer
teamed-up with furniture retailer
Mobexpert, offering a 15 percent
discount on any purchase. At Quadra
2, in order to raise awareness among
students, Conarg organized a raffle,
offering the winner a year of rent-free
living in one of the project’s studios.
Having now delivered more than 1,500
new homes, Conarg is currently taking
a break, as Andreea Stancu explains
that the developer does not have any
other residential developments in
the pipeline. Conarg is a group of five
companies, offering a wide range of
services, from construction, consultancy
and management to construction
materials trade.
This issue is printed on 100% recycled paper
correction: top 50
Office developers
In the last issue, in the Top
50 Office Developers listing,
we failed to include GTC Romania, due to a
mistake in the editing process. GTC should of
course should have made the listing, in view
of its project City Gate Complex, a 48,000
sqm project completed in 2010. We regret
the omission.
Raiffeisen Evolution
investing €150 m in
Floreasca Mall
The Austrian real estate developer Raiffeisen Evolution will complete
Floreasca Promenade Mall in October 2013
following an investment of around €150m.
The Austrians began work on the mall after
obtaining €100m in financing towards the
end of 2011 from the Austrian bank Raiffeisen. The center will have a lettable area
of 55,000 sqm, and is to be divided into four
levels, with over 120 stores and 1,300 underground parking spaces. The exclusive letting
agent for the project is the Austrian-based
Krammer & Wagner. It’s been offering space
in the shopping mall since the spring of 2010,
the project itself having been announced in
2008. The start of construction was delayed
due to market conditions.
Atenor postpones
Pipera office project
The Belgian company Atenor,
which launched a €30m investment in an office building in Bucharest’s
Pipera district, has stopped construction
pending signs of a market recovery and to
take advantage of lower costs for construction works. As recently as autumn 2010, the
company said it didn’t need bank financing
to build its 18,000 sqm building, which is
part of the Hermes Business Campus business park. The project calls for the construction of three office building on a 15,000 sqm
plot near the Pipera metro station in northern
Bucharest. Atenor ended 2011 with assets of
€278m, with turnover up 3% to €36.5m.
Vitan and Berceni connecting road considered in Bucharest
General Capital Counselors,
planning consultants for the city of Bucharest, are deciding whether to recommend
that a road linking the Vitan and Berceni
districts should be built. It’s estimated that
construction would run to about €8m, while
the 3.6 ha of land purchases necessary for
the project would cost another €8.3m. The
2.4 km Nicolae Grigorescu - Dudesti Splai
connection would be built in the south-east
of the city, including an overpass over the
Dambovita river. The project has received a
favorable judgment from the committee of
transportation and heritage, but was delayed
by the city’s legal and economic committees.
w w w . c i j j o u r n a l . c o m
April 26, 2012
Facility Management: Optimization for operating process and
life cycle costs by early strategic FM integrated design
Additional costs / Operating costs in Facility Management
FM during planning and execution – Mishaps in practice / Leverage on the operating costs
Operating organisation types and their effects on the planning phases
Speakers: Marc Porath - Managing Director (Drees & Sommer), Anton Stroe - Director (Drees & Sommer).
This session is aimed for all real estate and property professionals.
For further information please contact:
Monalisa Musteata I mail: [email protected] I
Organized by:
tel.: +40 721 482 072
All PLP Romania classes are held at Radisson Blu (Electra 1+2 room) in Bucharest, on the indicated dates starting from 10:00-12:00pm
Palas Iasi to open
May 31
The Palas Iasi mall, part of a
€260m retail scheme, will be
inaugurated on May 31, said Iulian Dascalu,
owner of Iulius Group. The opening is later
than the company had projected, with the
delay being blamed on the severe winter
conditions this year, temperatures dropped
to -30 degrees and the country came to a
near standstill because of snow. The delay
was partially caused by the bad weather in
February, when temperatures dropped to
-30 degrees. Tenants include H&M, C&A,
Waikiki and Stefanel, Village Cinemas and
the Inditex group, which recently signed a
deal to open six stores in Palas Iasi. The mall
will open 97 percent leased.
Palas Iasi nears completion
yet because planning regulations for the
area prohibit the construction of buildings taller than 13 meters. The project
can only move forward according to media reports if an urban plan for Victoria
Square is approved for the area.
New receivers for
Ibiza Sol insolvency
At the beginning of the
year, the Bucharest Court
decided to open insolvency proceedings with the developer of the luxury
project Ibiza Sol. Its main creditors, Raiffeisen Bank and Alpha Bank, have now
decided to assign a new receiver, Euro
Insol, the company which is also handling insolvency proceedings in the case
of the Asmita Gardens complex. Ibiza Sol
is a 14-building project located in Pipera
which was completed three years ago.
Just 98 of the 304 apartments were ever
sold, none of which were sold in the last
nine months. The development represents an investment of €60m, of which
€38m was borrowed by Raiffeisen Bank
and Alpha Bank.
who said that the wooden house concept
is still new in Romania but insists there’s
potential for them. The first Honka house
has been built in the mountainous area
of Azuga, while a second seaside dwelling could be built by the end of May 2012.
Home completions
fall in 2011
Last year, there were
44,456 housing units completed in Romania, a decrease of 4,356
compared to 2010. In the last quarter of
the year, 15,372 were put into use, 1,308
fewer than the same period in 2010. The
number of homes built with public funds
in 2011 rose by 554 homes, while those
using strictly private capital fell by 1,862.
Geographically, the biggest decrease
in the fourth quarter was registered in
Bucharest-Ilfov, where a fall of 859 units
was recorded. It was followed by the
northwest region (down 383 units). In
the southeast, however, 405 more homes
were delivered in Q4 2011.
Rents fall 3.5% at
Honka Finns enters
Romanian market
with wood houses
NEPI seeks planning
for 45 meter
building in Bucharest
The NEPI Group is interested in building a
development on Aviatorilor Avenue No.
8, but it could be blocked by planning issues. The project has been presented at
the city hall’s technical commission on
urbanism, but it hasn’t been approved
The Finnish wooded house
manufacturer Honka has entered on the
Romanian market, offering homes that
begin at €40,000, with a usable area of 70
– 80 sqm. The price for only one sqm goes
for between €300 and €1,200, depending on the specifications. The homes
can come with built in electric network,
fireplaces, and saunas. Honka homes will
be made ​​by the company Finn Land Business, the exclusive importer of the brand
in Romania. Finn Land Business is owned
by Romanian businessman Cristy Baisan
Atrium European Real Estate saw net income from
its retail park at Militari Shopping Center
fall by 3.5 percent to €6.6m. It said the
drop was because of discounts it offered
to tenants of the scheme. Gross revenues
at Militari fell to a similar degree from
€7.8m to €7m. Atrium announced that
its Romanian portfolio of properties were
now valued at €71.3m, up from €68.9m in
2010. The fund has properties in Poland,
the Czech Republic, Slovakia, Russia,
Hungary and Romania. Militari Shopping
Center, which opened in 2003, covers
51,400 sqm and is located in the Western
part of Bucharest.
This issue is printed on 100% recycled paper
Militari Shopping Center
According to the TIH report, debt on the mall
debt amounted to €35m for 33 creditors. In
this case, Volksbank would take over the
commercial center from the company Red
Project Three, the project developer. The Armonia Braila mall was opened in November
2008, only to close seven months later. The
center was placed into insolvency in November 2010 and late last year the Court decided
to announce bankruptcy. It has a total area of
41,850 sqm, over two floors.
Volksbank could take
over Armonia Braila
House (TIH) with Volksbank, are reported to
have been working on a strategy on how to
resolve the situation of the commercial center
Armonia Braila, which went bankrupt late last
year. The mall is valued at just €25m, following an investment that amounted to €45m.
CA Immo Romanian
revenues triple
The Austrian investment
fund CA Immo has tripled
its revenues over the past year in Romania from €9.4m to €28.5m. Its Romanian
real estate portfolio, which is valued at
€410.5m, includes four office buildings
(Bucharest Business Park, Riverplace,
Center Opera and Europe House ), as well
as a logistics project located on highway
Bucharest-Pitesti, a retail park in Sibiu and
other land. The company announced that
it plans to make €300m in asset sales in
2012, and that these will be split between
its western and eastern European holdings.
Laguna Residence
creditors seek
Bucharest Court Magistrates
admitted a request filed by Laguna Residence
project developer creditors, Gea International Development for opening bankruptcy and
dissolution. Bucharest courts have seen similar bankruptcy proceedings requested with
several other similar requests. The Laguna
Residence project was supposed to bring 504
luxury apartments to the market, spread over
a total of 18 buildings.
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BBC 1 Plus nears
CA Immo is one of an exclusive group of
developers who will actually be celebrating
the completion of an office building in
Bratislava this year. Its project BBC 1 Plus is
a 13-storey building offering 14,600 sqm of
office space that’s due to hit the market in
August in one of the key business districts in
the capital.
The construction of BBC 1 Plus is an example
of something that’s still seen only rarely
in Central Europe: a new administrative
building literally replacing an older office
building erected after the 1989 revolution.
When the Austrian investor CA Immo
bought the building from its developer HB
Reavis, together with its somewhat younger
neighbor, it knew full well that demolition
was the only rational, long-term solution.
“It was always the idea to do something
with the plot even when the market heated
up,” says the company’s project developer
CA Immo‘s new office building is
betting on corporate interest in
environmental sustainability
for central and eastern Europe Gernot
Weingraber, explaining that a building’s
quality has to meet its location and that the
old building simply didn’t.
For CA Immo, high quality buildings in
this day and age means projects designed
with the environment in mind. In the first
place, Weingraber admits this is because
tenants, especially users of large amounts of
floor space, are demanding it with everyincreasing regularity. Some are driven by
pure cost issues, as most sophisticated
companies understand how big a portion of
their occupation costs can increase thanks to
energy issues.
There’s no point trying to sugar coat or hide
the total costs involved in renting office
space anymore, suggests Weingraber. “These
days, people want to have a drawing where
they see what area they can use, and the
add-on charge is hard to understand, so
BBC1 Plus will be one of Slovakia’s first LEED certified office buildings
they want a sheet that makes clear what
the costs per square meter will be, including
the service charges. They want a clear
transparent package and we try to provide
them with that.”
Green solutions are also imperative from
the other end of the development cycle as
well, as the number of investors willing to
provide an exit for developers of buildings
without an environmental certificate is
growing smaller by the month. There are
even potential tax considerations, says
Weingraber. “We fear a bit that some
governments will implement CO2 output
taxes, therefor we think this is a reason why
we shouldn’t build without certification.”
Headline rents are set at between €12 and
€12.50 with the degree of flexibility by the
developer determined by the size of the
space required and the length of the lease
being considered. The recession’s impact
on the development market means that
a few months ago, there was so little new
supply on offer that it would have been an
ideal time to be offering ready product. As
it is, Weingraber says he expects to be able
to finalize tenants for up to 33 percent of
the building in the coming weeks. But the
reality is that other projects are approaching
completion as well, including Central, CBC
and Digital Park III. Of greater concern,
perhaps, is the level of confidence end users
have in their ability to expand in the future.
“Last year,” he says, “take up in Bratislava was
around 99,000 sqm, of which 50 percent was
renegotiations and extensions in existing
buildings. That leaves half of it for relocations.
Of this, new entries were only a small
As individual as your project
Group Immorent
We respect the uniqueness of our clients and their projects. Our real estate financing is therefore thoroughly tailored to
their individual needs. A unique project requires a strong partner who can do more for you. That is why we will be happy
to provide you also with other related specialised services, such as construction management or facility management.
Contact us by phone at +421 2 48 62 48 41 or by e-mail at: [email protected]
Residential‘s new
motto: Small is
Like many markets across the region,
Bratislava’s residential market appears to be
near some kind of a bottom, albeit not in
much of a rush to start the long trek back
up. Prices on quality, or at least sensibly
conceived apartments are fairly stable now
and attractive new projects are managing
to pick up enough pre-sales to trigger the
financing they need to finish.
Interestingly, an increase in the willingness
of Slovaks to invest in real estate seemed to
coincide last year with rising tension in the
Eurozone. But if there’s any overall advice
residential experts in the Slovak capital seem
to give consistently, it’s to build smaller flats
in smaller projects.
The worst of the price fall is
almost certainly over, leaving new
schemes at an advantage
“At the moment, we’re roughly at the
bottom,” says Michal Zajíček, an analyst at
the Lexxus residential agency. “It’s possible
things there will still be some up and down
movement in prices, but it’s no longer the
case that all residential properties are falling
in price. It’s the same for new developments
as well as on the secondary market.”
Zajíček says that if there’s no work for people
and little economic security, prices are
unlikely to move. Still, he predicts “there will
be room for new growth in prices once most
of the flats that have been built get sold off.”
He’s non-committal on the question of
whether developers were asking too much
for their projects. “They were high but
what’s the ideal price? The price is always a
reflection of what that a given client is able
to pay.”
“We try to sell for prices that the market
accepts,” he goes on. “We push developers
to offer the lowest prices possible. I’d love to
sell for 1,200 sometimes, but if the developer
won’t sell for less than €1,600, then there’s
nothing I can do.”
Miroslava Mizeraková, director of
Hypocentrum in Bratislava, says that
somewhat surprisingly, interest in real
estate rose, rather than fell last fall when the
unfolding Greek tragedy threw the entire
Eurozone into doubt. “There is a group of
people who are worried about inflation and
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Today, these same buyers have toned down
their requirements. So, rather than targeting
loans of €70,000 to €100,000 for a new place,
they’re seeking loans of €30,000 to €50,000
that they’ll use fixing up an existing flat even an apartment they’ve inherited from a
Banks have tightened up the conditions
under which they’re willing to hand out
mortgages, of course, but they haven’t shut
up shop entirely. Home buyers can expect
to get loans at 4 percent if they time their
purchase right, though Mizeraková says 4.5
percent is more common. Banks are also
willing to give existing clients significantly
better rates than new ones, in part because
banks believe they don’t really start to make
money on a loan until the fourth or fifth year.
Bratislava residential sales, by district and size
the economic situation, and they want use
their savings rationally. They’re not looking
for a profit, but they want to put their money
in something that’s more secure than a bank.
That group of people I think is looking for
Since Hypocentum‘s company primary
serivce is helping clients secure a mortgage,
Mizeraková has a useful overview of
consumer trends. As the housing wave was
reaching its peak a few years ago, a typical
buyer was a young couple that was asking
for, and receiving 100 percent financing to
buy their newly built flats. Sometimes they
took out 120 percent of the value of the
flat in order to be able to furnish their new
Source: Lexxus
some discounts, but there’s interest in new
projects.”The successful new projects have
between 10 and 100 units in a single phase.
“If the quality is good, then the speed of
sales reflects that. By the time the project
is handed over, if we’re able to sell up to 70
percent of them, then it’s a success. But the
only way to achieve that is to build small,
quality flats. Not big ones.”The average size,
he says, is 55 sqm, and clients focus on the
number of rooms in an apartment, not on
the size of the rooms.
Kechnec Industrial Park Kosice, Eastern Slovakia
5500 sqm modern factory/warehouse
+ 4 hectares expansion land
Zajíček says that there were hardly any new
projects on the market in 2010, but in 2011
1,300 new flats hit the market and half of
them were sold by the end of the year. “So
there’s substantial interest in new flats,” he
says. “The older ones are selling too, with
Tom England MRICS, Modesta Real Estate
[email protected] +421 2 3240 8888 +421 911 133 430
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BNP Paribas500x2000V.indd 1
modesta.indd 1
06.03.12 9:59
3/22/2012 3:21:23 PM
Hegedus: Shortterm office deals
now rare
What are the big opportunities for you? Is it advantage to have
a Slovak MD?
We’ll see in a year’s time.
I ask because of the dominance of the main local players. It’s
been much more difficult here to get a foothold in the market.
Or sell.
It’s a good point. In fact Bratislava in this sense very similar to Vienna
where there are almost no foreign developers. Here, the city is
mostly covered by Slovak developers. At the moment there’s only
one project done by a foreign developer that’s under construction.
BC1 Plus by CA Immo. They are the only ones on the market right
now. There are three in the top league and then some foreign ones
who play second violin in terms of volume.
And in terms of manufacturing-led investments?
Regarding foreign direct investments, all of the main prospects
were waiting for the elections to come. I think the new government
will have a clear European orientation so the question will be only
whether the investors will get incentive packages or not. A lot of
things were stopped in the past six months and I think we can
expect deals to happen in the last quarter of the year. It will take at
least a month for the
new government to
get set up. And then it
will depend if they use
any former ministers.
Since it would probably
be a new person, it
will take six months to
puta strategy together.
On the other hand, we
don’t think there will be
any changes in SARIO
[the Slovak investment
agency], which is good.
Slovakia was
obviously glad to
see investment deals
transacted, but do
CBRE‘s new MD for Slovakia Tomas
Hegedus warns developers are
beginning to make 5-year deals a
you expect to see deals happen this year?
I think we will. The supply of course isn’t great, but there are up to
three buildings to be sold this year. And what we saw last year is
that if you have a good building in a good location, it’s a very safe
investment for the buyer. Anytime we see a client leave a floor
in a good building in Bratislava, it gets filled quickly with a 5 year
contract or even more. We even saw this in the depths of the crisis.
I see investment in this region and to good building in a good
location as an absolutly fantastic opportunity.
Has there been any recovery, or a shift in land prices?
I think land prices are really stable now, there hasn’t been any huge
shift. Land that didn’t have permits that was priced expensively has
seen a significant decrease in price. But land that’s prepared in good
locations hasn’t seen prices shift.
There’s a high percentage of renegotiations at the moment. Are
you seeing tenants trying to secure space for future growth? Or
are they trying to lock in lower rents?
There are two stories. The local story, the Slovak story, and then the
big international companies that we see making a strong push to
doing near-shoring. Most of the time, say 80 percent of the time,
they’re expanding and there are increasing numbers of shared
service centers. But 20 percent of them are downsizing. They’re
outsourcing management to the Czech Republic or Poland and
shrinking their presence in Slovakia, just leaving a sales team, for
example. You see this with food and beverage companies and with
How about lease terms? What do they tell you about what
tenants (or landlords) believe is happening to rent levels, or to
the economy?
What we see is that landlords are less and less keen to sign 5 year
agreements. The market is shifting to 6-7 years, but sometimes
we see even 10 year or longer terms. And as the economy is sort
of stagnating, we see that this trend will continue because if your
company doesn’t grow you can commit for longer term. And also
from the perspective of return on investment, there’s such a huge
risk on the developer side to sign just 5 year-agreements that I think
we will see a greater shift to longer leases and we can expect even
an increase in rents.
IMF: Romania has met its targets
Despite some delays in implementing reforms, Romania
has generally met the targets agreed with the International Monetary Fund, according to a report by the institutions that analyzes the effectiveness of the Romanian program. The
IMF picked out the Romanian National Bank for special praise, despite
the fact that it failed to establishment a bad bank as recommended because of concerns that it would send off excessively negative signals.
The country does appear to be paying a price, however, as unemployment figures rose to 7.7 percent in Q4 2011, a 0.5% rise from Q3. The
National Institute for Statistics (INS) said that the employment rate for 15
- 64 year-olds fell 1.2 percent in the last quarter to 57.9 percent.
Poland’s economy expansion slows in
As it did in January, Poland’s economy cooled off in
February, but central bank chief Marek Belka says that
these types of slowdowns have proven to be temporary. “The data show
that the economy is slowing down, but I would not raise the alarm,” said
Belka. “We already had months of a possibly even deeper slowdown in
July and August but it turned out to be temporary.” According to Central
Statistical Office (GUS), industrial output was 4.6 percent higher than it
was in February 2010, though market expectations was for closer to 8.6
percent. Compared to January, output fell 1 percent, managing just 1
percent growth.
Still, Poland’s unemployment rose slightly to 13.5 percent in February,
a 0.3 percent hike from January. The Central Statistical Office (GUS) reported that the number of unemployed Poles who registered for work
in labor offices across the country reached 2.1 million. Unemployment
rates have increased in nine regions in Poland over the past year.
NBR cuts benchmark interest rate to 5.25%
The National Bank of Romania (NBR) has decided to lower the monetary policy rate by 0.25 percentage points to
5.25 percent from the present 5.50 percent. This follows
identical rate cuts of a quarter of a point in February, January and November, as the policy appears to be to try to re-start an economy that
could be slipping into recession. In addition, the central bank decided to
maintain the existing levels of minimum reserve requirement ratios on
both leu-denominated and foreign currency-denominated liabilities of
credit institutions.
The decision comes on the back of news that Romania’s inflation rate fell
to 2.59 percent in February 2012, from 2.72 percent in January 2012, the
lowest level in over 23 years. Compared to January, prices were 0.64 per-
centage up thanks to higher food prices (1.21 percent), non-food products (0.4 percent up) and tax services, which increased 0.13 percent. The
average inflation rate in the first two months of 2012 was 0.5 percent,
compared to 0.8 percent recorded in the same period in 2011. The Association of Financial – Banking Analysts in Romania (AAFBR) has predicted
inflation in 2012 will reach 3.7 percent and it foresees the rate falling to
3.5 percent by the end of 2013.
Hungary’s inflation picture clouded by
IMF/EU talks
Prices for Hungarian consumers rose 5.9 percent in January compared to a year ago, according to recent figures,
which puts the country’s inflation rate at the head of the European
pack. This is likely to suppress interest by the Hungarian national bank
in cutting interest rates. The bank sees its duty as maintaining inflation
at around 3 percent and currently has its key interest rates pegged at
7 percent. Banking analysts now believe that any rate cuts before the
middle of the year are unlikely. But predictions for rate cuts, or hikes, are
complicated by growing uncertainty over the fate of a bailout agreement between the Hungarian government and the IMF and the EU.
Prime minister Viktor Orban promised to reach a deal quickly back in
January, sparking a rise in confidence in the forint, but recent statements
(dismissed by some as national day rhetoric) have muddied the waters,
raising once again the specter of a potential Hungarian default. In February, according to recent figures, consumers were squeezed by rising
fuel prices (87 percent) and a 6 point gain for food prices, compared to
a year ago.
The views of IMF MD Christine Lagarde now matter in Bucharest and Budapest
Rates 2011/2012
consumer price indices, index 2005=100
Czech Republic
Slovak Republic Switzerland
United Kingdom
United States
30.03.2012 | Source: OECD
currency exchange rates, national units per usd
Czech Republic
Hungary Japan
Russian Federation
United Kingdom
16.92 17.84 18.09
189.69 206.89 216.18
76.95 76.82 76.66
28.77 30.49 31.51
18.77 19.39
227.5 231.57
77.50 77.81
30.87 31.45
Unemployment rate
No. of unempl. (in th.)
CPI monthly change
CPI yearly change
30.03.2012 | Source: ČSÚ, MPSV
30.03.2012 | Source: OECD
long-term interest rates, percent per annum
Czech Republic
Russian Federation
Slovak Republic
United Kingdom
Unemployment rate 10.8% 10.8% 10.7% 10.8% 10.6% 10.7% 11.1%
No. of unempl. (in th.) 463
CPI monthly change -0.3% -0.1% -0.1% 0.7% 0.7% 0.2% 0.3%
CPI yearly change
3.1% 3.6% 3.6% 3.9% 4.3% 4.1% 5.5%
30.03.2012 | Source: HCSO
7.9% 8.0% 8.6% 9.1%
451.9 476.4 508.5 534.1
0.3% 0.4% 0.4% 1.8%
2.3% 2.5% 2.4% 3.5%
Unemployment rate 11.7% 11.8% 11.8% 11.8% 12.1% 12.5% 13.2%
No. of unempl. (in th.)1914.3 1914.3 1963.8 1963.1 2002.3 2082.6 2100.0
CPI monthly change -0.2% 0.0% 0.0% 0.7% 0.7% 0.5% 0.7%
CPI yearly change
3.6% 4.0% 3.5% 3.8% 4.4% 4.5% 4.1%
30.03.2012 | Source: GUS
Unemployment rate
No. of unempl. (in th.)
CPI monthly change
CPI yearly change
30.03.2012 | Source: WS, MMSSF
Unemployment rate
No. of unempl. (in th.)
CPI monthly change
CPI yearly change
13.1% 13.1% 13.1% 14%
357.8 357.8 357.8 381.8
-0.1% 0.1% 0.3% 0.2%
3.7% 4.0% 4.3% 3.8%
30.03.2012 | Source: ŠÚSR
30.03.2012 | Source: OECD
SHORT-term interest rates, percent per annum
Czech Republic
Russian Federation
United Kingdom
6.9 0.0
30.03.2012 | Source: OECD
Canadian Dollar
Czech Koruna
Danish Krone
Hungarian Forint
Japanese Yen
Norwegian Krone
Polish Złoty
Pound Sterling
Romanian Leu
Swedish Krona
Swiss Franc
US Dollar
CZK 24.77
JPY 109.95
30.03.2012 | Source: ECB
MIPIM 2012
It was a fascinating, if ultimately slow edition of Cannes. With 19,300 delegates officially on hand to partake of the generally sunny weather,
the negativity of Q4 2011 was put on hold. But there was a notable lack of over optimism, as long-term concerns over financing continue to
plague the industry. Just as it did at the CIJ Awards, PSJ Invest’s Main Point Karlin went home with the Best Office award.
Czech project Main Point Karlin were the big winners in the Best Office and Business
Development category this year.
Entrance to the opening cocktail party
Cornerstone ceremony for Florentinum attended by city officials and various individuals involved in the project.
AFI Europe Czech Republic
At event called „Pardubice in our
hearts“ during which the handicapped children from Pardubice local school Svítání created an original
ceramic map of Pardubice which was
unveiled on February 23 in the AFI
Palace shopping centre. The children
worked almost 6 months to make a 4
x 2 board which is now placed in the
entrance hall of AFI Palace.
Guests dancing at the cocktail party
PENTA Czech Republic
At the cornerstone ceremony
Penta (represented by its partner,
Marek Dospiva) welcomed several
important guests: Bohuslav Svoboda, city mayor of Prague, Oldřich
Lomecký, mayor of Prague 1, and
main tenants Magdalena Souček,
Ernst&Young partner for the Czech
Republic, Martin Jeřábek, Executive
Director of Havel&Holásek law firm,
and the main architect of Florentinum, Jakub Cigler from Cigler, Marani Architects.
Miluše Horská (Director of elementary and
The unveiling of original ceramic map of Pardubice with children from the school SVÍTÁNÍ, top practical school SVÍTÁNÍ) and Ilan Kalimi
athletes from Pardubice´s local ice-hockey and basketball clubs and Czechoslovak Legionaries. (Director of AFI Palace Shopping Centre).
This issue is printed on 100% recycled paper
Multi Development Czech Republic
The opening ceremony of Ostrava’s largest real estate scheme was attended by the Deputy Mayor of the City of Ostrava, Dalibor Madej, representatives of Multi Development,
and from Meyer Bergman and HOOPP, owners of the Forum New Karolina Centre. Simona
Krainová presented a cheque for CZK 300,000, to the Fund for Children at Risk Due to Environmental Pollution.
Top-model Simona Krainová presents a cheque for 300,000 CZK to
the Fund for Children at Risk Due to Environmental Pollution.
IVG Hungary
IVG Hungary organized a “Green Party”
for Budapest office agents in March,
which was aimed at refreshing their
knowledge of Infopark and to raise their
attention to the importance of sustainable and green solutions for office buildings. The party was held in Infopark
Building “E”, the first completed office
building in Budapest with a LEED Silver
Jean-Francois Ott, President & CEO of Orco Property Group
Top British singer Jamelia performs
Fireworks at Złota 44
The crowd enjoying Viva Vox choir from
Deputy Mayor of the City of Ostrava, Dalibor Madej with representatives of Multi
Development and Meyer Bergman.
Orco Property Group PL
At the invitation of Orco Property
Group, the creme de la creme of Warsaw attended the Congress Hall: the
business community, artists, and celebrities. Other exceptional partners
were on hand as well, such as Ferrari,
Bang & Olufsen, and Hennessy. The
ceremony highlight came with the
presentation of the silhouette of the
“Sail” dominating Warsaw’s skyline
from Zlota 44 during which air traffic
over the city was suspended.
Drinks before home
Aneta Sosnovcová (Clifford Chance) and Martin
Fučík (Havel, Holásek & Partners)
Nigel Young (NAI Mipa) and
Robert McLean (RPMG)
Jonathan Kilby (Branton Associates)
and Brent Watkins (Deloitte)
Georg Blaschke and Martin Erbe (Helaba)
Marek Krajewski and Rajmund
Kuczyński (Ghelamco)
Beata Latoszek (BZ WBK) and
Martin Erbe (Helaba)
Rodica Popescu (Bene), Alina Necula (Adama
Group) and Elena Tsaliocoglu (Adama)
Marius Scuta (JLL) and Catalin
Scripcaru (Century 21)
David Hunt and Gabriel Munteanu
(Cushman & Wakefield)
This issue is printed on 100% recycled paper
During these turbulent times the DBH has created a successful monthly meeting point that is sorely needed
in today’s marketplace. Now held in four countries the Czech Republic, Hungary, Poland and Romania
with our Prague events started in 2012. For more information regarding sponsorship or to be placed on
the invitation list, please contact one of our offices for more information. For the full 2012 DBH calendar
for all countries, please visit our website
DBH Calendar 2012
Czech Republic
available for
Richard Ness (Red Group) and Matthew
Barret (Executivia Recruitment)
Petra Rychnovská (ASB Prague)
and Dagmar Bautzká (Bright HR)
Jakub Holec (108 Agency) and
Tero Loukonen (Passer Invest)
Martin Erbe (Helaba), Mark
Freeman (Savills), Robert McLean
(RPMG) and Owen Bramley
(Bartlet Asset Management)
Bartłomiej Krzyżak, Paweł Banach
and Marcin Purgal (Savills)
Karol Bartos (MGPA) and
Dominik Górski (Salans)
Robert Machalíček (ASB Group),
Przemek Oleksy (ASB Poland)
and Sebastian Świstak (Savills)
Tomasz Ożdziński (TPA Horwath),
Anna Zajbert and Maciej Tuszynski
(Westdeutsche ImmobilienBank)
Veronica Iacob (Cushman &
Wakefield), Florin Sorea (Compas
Real Estate) and Amelia Turp (RPMG)
Laura Dumea-Bencze (Anchor
Group), Victor Rachita (CBRE), Dana
Bordei (CBRE) and Mihai Paduroiu
(The Advisers/Knight Frank)
Robert Fletcher (RPMG), Frank Nolan
(Nolan Tate Stevenson Arhitecti)
Georgy Saringer (GS Energy)
Andrei Bontic (Casa Auto), Catalin
Marin (Credit Bonus), Ionut Petcu
(The Advisers/Knight Frank), Nicolae
Pistalu (The Advisers/Knight Frank)
and Bogdan Untea (Immofinanz)
Mihaela Petruescu (Capital
Property Advisors), Adrian Mihaila
(Capital Property Advisors),
Sebastian Dragomir (Immofinanz)
and Aurelia Luca (Global Finance)
Dragos Marinescu (Mergeani, Prodan
& Asociatii), Marius Rimboaca (IBS)
and Razvan Barbeli (Graphtech)
available for
Cushman & Wakefield named Izabela
Mucha its new Head of Valuation &
Advisory Department, as she will be
managing the property valuation and
research analyst teams for the Polish
and eastern markets, including the Baltic
states, Belarus and Ukraine. She will do
this from C&W’s Warsaw’s office. Izabela
began at Cushman & Wakefield in 2002,
with her assignment in the property
management department.
After ten years of experience in the legal
field, Aleksandra Minkowicz-Flanek
will take charge of Salan’s Labour and
Employment team in Poland. Aleksandra
has been a labor and employment
legal advisor since 2007, and is also a
qualified specialist in a corporate law.
She’s recognized as a Polish employment
expert in PLC Which Lawyer?, the ranking
published by Practical Law Company.
Aleksandra is also known as an author of
numerous of press articles, as well as for
speaking at the conference. In Salans, she
will be managing a team of five specialists
in the Labor and Employment Team.
Aneta RogowiczGała its new Head
of Property and
Asset Management
Department in its
Polish office, after
the former chief, Michał Skaliński, retired.
Aneta has been gaining her experience
in the company since November 2004,
when she joined the advisor’s Polish team.
Aneta will be responsible for managing
the property and asset department team’s
continued cooperation with customers
as well handling the company’s further
The former RICS Hungary board
member Krisztián Hornok has
recently joined the Property Partner’s
management team in Hungary.
Along with the new appointment, the
company announced plans to expand
the scope of its activity, along with
the range of the service provided.
Krisztián’s extensive experience in
valuation, investment and development
consultancy, as well as in property and
asset management, is expected to
make the firm more competitive on the
property service market. Prior to joining
the Property Partners, Krisztián Hornok
was Managing Director at DTZ Hungary.
Colliers International
- Jan Zadražil
Cordery - to its
local Czech Team.
RICS qualified real estate valuer, has
been appointed as a Valuation Senior
Associate. He joins Colliers from RMS
Tacoma, where he was responsible for
overseeing and carrying out valuation
assignments and for client relations
and business development. Konstantin
Konstantin, a new Associate in the
Investment Department, started his
property career in 2011 as an analyst for
the acquisitions department at Pinnacle
CEE, having moved from KPMG Slovakia
where he worked since 2008 in Audit
and Transaction Services.
Veronika Prokopová and Václav
Horák will strengthen the CTP team.
Veronika is a lawyer, having graduate
from Brno Masaryk University and
Rotterdam university graduate. Prior
to taking her position in CTP law
department she worked for JUDr.
Milan Zápotočný, focusing on civil
law, alternative solutions to law-suits
and insolvency law. Václav Horák,
who worked as a project manager for
Tebodin Czech Republic and Shell Czech
Republic, is joining CTP’s construction
Skanska Reality has appointed a new
CEO. Mikael Matts has been chosen
to replace Björn Mattson, and should
take advantage of his thirteen years of
experience at JM, a leading Swedish
developer and construction company.
During his first month at Skanska,
he’s concentrated on building an
understanding of the company and
the Czech market, admitting that the
volume of administrative paperwork
in the planning process came as an
unpleasant surprise to him. Land
acquisitions will be a priority for Skanska
Reality, he says, as well as building lowenergy and zero energy houses.
I‘m a Slippo is sliding into oblivion with
barely a whimper, by the looks of it. The
original idea was for the mothership to
sell off the company by 2014, but insiders
knew that would never work. Basel III
didn‘t help. Watch where their brightest
sparks end up. Money‘s going to come
from somewhere...the question is who‘s
going to source it, and through what
kind of vehicle? The latest town here in
Beerville is the hot news that the mayor
asks „lobbyists“ for refrigerators and for
master plan suggestions. Except everyone seems to think it‘s old hat. The fact is,
a couple years ago, people complained
there was no money for bribes around,
making planning impossible to get. Let‘s
hear it for progress. What will be fascinating is if EuroCoMoney is chopped up by
a court-assigned, generic liquidator? Or
a real estate pro? Does it
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CIJ Archive
From the CIJ Archives
Czech Republic
April 2007
Social interview: Markus Leininger
The image of property financing has changed rapidly
since the 1990’s, haven’t you found?
When I started, it was considered to be very boring. All of
my classmates went to London to investment banks to find
high-profile jobs. I began with a German mortgage bank.
They all asked me what I was doing. I knew it was boring,
but it would also be very profitable. Some of them have burned out because of the
harsh working hours, but I’ve ended up loving the lending business.The image has
also changed these days. We can attract top-quality people to work for us now,
which is something that never happened before, because the job has become very
international, it’s become exciting, and we can do billion euro deals.
How did you choose property? Was it just a job opening, or was there a depper relationship with the sector?
It was a job opening. I came to the bank directly after my time in university and
had a training period in which you get to know the whole bank. That’s when I
chose property.
Besides flying around the world, do you have any hobbies to report?
I love to cook, and I’m trying to become a better cook. I’m taking courses from
chefs and I was even on a one-week course in Italy for training. It’s a bit more than
just trying things out at home. It’s the next step.
Do you have a favorite restaurant in New York?
One if by land. Two if by sea.
Would you like to open a restaurant some day?
No, because I hate to lose money.
Now it’s back to boring business. After Lehman and Hypo RE,
new priorities have been set. Setting up the business in CEE
from scratch was a wonderful experience, building up relationships, creating value but now to close operations. This is
an unrepeatable and unique experience to go through. Real
estate finance has already changed completely, and for investors it will be more expensive. Traditional bank finance
will be less available than before, but alternative debt providers will be a new
source to bridge the funding gap. This is possible only if terms and conditions will
increase to make such business profitable for, for example, debt funds. The crisis of
the financial sector will be not over in short term. Rough times .......
Markus J. Leininger | Head of Corporate Banking CEE | Eurohypo
April 2002
GTC unveils
regional retail
When it comes to
Romanian retail,
attention tends to
Bucharest market,
thanks to a whole generation of large
malls now under development. But the
real attraction of the country lies in its
deep regional potential, which is exactly what developer GTC is looking to
exploit with a new program of schemes
for the country’s “other” cities.
GTC’s current Romanian portfolio
includes two office buildings in the
center of Bucharest, Europe House and
America House, as well as three residential projects: Green Dream
Residence, Rose Garden Park, in northern Bucharest, and Jasmine Park, close
to the city center. In the retail sector,
GTC can boast of Galeria Bucharest, a
shopping mall of 60,000 sqm currently
under construction on a 7 ha site and
due for delivery later this year.
This new push into Romania’s heartland through a trio of Galeria centers is
part of a larger program by GTC
through which it hopes to build shopping centers in 20 medium-sized towns
with populations exceeding 75,000.
Ten sites in ten different cities have
already been secured. Shimon Galon,
GTC Romania’s country manager, says
that seven retailers have already
expressed an interest in becoming tenants, among them Dutch supermarket
chain Spar, which has contracted about
2,300 sqm in the Piatra Neamþ and
Suceava malls.
This issue is printed on 100% recycled paper
CIJ Archive
April 2002
The long road
to the
ago, the empty
space across from
the Wielki Theater
at the north end of
Pilsudskiego became the nest major
construction site in the city, bringing
to an end years of doubt and confusion
about Poland’s most desirable real
estate location. Hines Polska’s
Metropolitan office project was finally under construction, leaving behind
a long story of bureaucratic complications, legal ownership fights and corporate failures. But the final result is
impressive: a new office building in
the heart of Warsaw, designed by a
world-class architect, that’s set to
become the first great Polish landmark
of the 21st century.
When it’s delivered to market in the
summer of 2003, the Metropolitan
will be a 36,000 sqm building, with
32,000 sqm of office space and
approximately 4,000 sqm of retail and
service space on the ground floor.
Though structurally a single entity, the
building will consist of three independent parts, and in the center of it will
be a large public courtyard, featuring
fountains, shops and seating. “It will
be a nice environment,” says Richard
Aboo, head of the office department at
Healey & Baker in Warsaw. “There
will be a pedestrian flow not just of
people in the building, but of people in
the area. It’s not just a big building
that imposes itself on the neighborhood. People will be able to access it.”
April 1997
Slovak construction up
After five years of stagnation that saw total construction production in Slovakia sliced in half, 1996 was the
second straight year of modest gains. An industry that
had a total production volume of SK 115bn in 1989 and
fell to SK 55bn by 1994 should rise to SK 60bn in
1997, according to Euroconstruct estimates.
The biggest chunk of that business, 36 percent in 1995,
comes from engineering projects, with industrial construction ranking second at 28 percent. Reconstruction
too third 1t 15 percent, public construction composed 13 percent, and
residential building made up the remaining 8 percent.
April 2007
Echo Investment comes to town
Polish developer Echo Investment has released new
details regarding its €150m Mundo city center complex
to be built at Bosnyák Square, in the Zugló district of
Budapest. Company representatives have also said that
completion of the 200,000 sqm development will not
depend on the construction of the second stage of the
new Budapest Metro 4 line, which has recently been
plagued by news of cost increases and has seen its target
date pushed back from 2010 to 2012.
The complex will be located near the eastern end of Metro 4, which is ultimately planned to provide a rapid transit link via Keleti railway station and the
city center to Kelenfold, in southwest Budapest. While Bosnyák Square is currently the terminus of bus service to downtown Budapest, the completion of the
new metro would clearly enhance Mundo’s attractiveness as both an office, leisure and retail location.
Yet two different press releases by Echo in February quietly moved the completion
date for the Mundo project from 2010 to 2011. Echo Investment, represented by
board member Piotr Gromniak, held a joint press conference with Budapest city
and district councils in Zugló on February 21. In a joint release that day, the company said work on the 6.8 ha site, bought from the municipality for an undisclosed
sum last July, would begin next year, with completion due for 2010.

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