Residential Developers in CEE: 2000 - 2010

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21st-22nd September | Prague Czech Republic 2011

11007 Residential Developers in CEE: 2000 - 2010

CZK 107 | HUF 929 | PLN 15 (7% VAT incl.) | RON 14 | RUB 140 | € 4.48 | index 37332X This issue is printed on 100% recycled paper THE FUTURE IS 100 YEARS OLD

It’s not every day that a business marks their 100th anniversary. And it’s not every firm that reaches this important milestone, but then we’re not just any firm. In a world that changes more often, and more quickly than ever, we provide the certainty of outcome that comes with a century of successful client engagements, always keeping an eye firmly on the future. We look forward to the next 100 years with you. To find out more please contact:

Marcin Klammer Pavel Cermákˇ Tibor Stahl John Atkins Poland Czech Republic Hungary and Germany t +48 22 310 22 06 t +420 226 207 800 Romania t +49 211 913 76 50 t +36 1 411 3300 7956EC

7956_CIJ Advert_June 11.indd 1 23/05/2011 09:16:07 This issue is printed on 100% recycled paper

Contents regional 3

4 Regional Editorial, 4 | Indicators, 5 | Real Talk, 6 | Company news, 8 | EuroNews, 10 | Financial Page, 11 | REAS: Consolidation coming for CEE residential sector, 12 | TOP 50 Residential: 2000 - 2010, 14 | CEE Marketing professionals survey, 64 | Events, 74 | Appointments, 75 | DBH, 76 | From the CIJ Archives, 78 28 Czech republic Same old stories in Prague 7 tender, 28 | Massive brownfield to transform Prague‘s center ,30 | Phase II of Classic 7 vs. Holešovice vacancy, 31 | Dutch done with Czech vacation homes, 32 | South Town in Brno finally lifts off, 33 | Aristocratic development planned, 34 | Housing starts roundup, 35 | Lordship delayed over spa-town politics, 36 38 Hungary Dallos: We haven‘t hit bottom yet, 38 | Duna Bellview nearly half-let, 40 42 Poland Business Garden is speculatively sustainable, 42 | News ,43 | Goodman makes good in spec challenge, 44 | News, 45 | HB Reavis clinches PKP deal, 46 | Puzdrowski: Prices could still fall, 47 | Quick fix eludes residential sector, 48 | A2: Made in China...not!, 51 | Deals : C&A, Robyg and Grup Buma 52 THE FUTURE IS 100 YEARS OLD 52 Romania It’s not every day that a business marks their 100th anniversary. And it’s not every firm Land prices in free-fall, 52 | CEDER 2011 Round-up, 54 | Offices going up at Cotroceni, 56 that reaches this important milestone, but then we’re not just any firm. 58 Slovakia In a world that changes more often, and more quickly than ever, we provide the HB Reavis launches fund, 58 | Residential’s rebirth in Bratislava, 60 | Hajdu: Focus shifting to commercial, 62 certainty of outcome that comes with a century of successful client engagements, always keeping an eye firmly on the future. We look forward to the next 100 years with you. CEO ROBERT FLETCHER • [email protected] Sales & Marketing Manager HU...... OFFICE ADMINISTRATION HU...... Tel: (+48) 22 848 60 21 • Fax: (+48) 22 606 39 73 Dalma mÓzes Zsuzsanna Sarkozy [email protected] To find out more please contact: SALES director CR & SK Tel: (+36) 202 396 736 • [email protected] Tel: (+36) 1 373 0429 • [email protected] Ing. ZUZANA VODRÁŽKOVÁ • [email protected] ROBERTS PUBLISHING Kft. sales & events manager PL...... OFFICE ADMINISTRATION RO...... SZENT ISTVÁN TÉR 11/B, H-1051 BUDAPEST Marcin Klammer Pavel Cermákˇ Tibor Stahl John Atkins EDITOR IN CHIEF Marta Niezgoda Monalisa Musteata Tel: (+36) 1 373 0429 • Fax: (+36) 1 373 0430 ROBERT MCLEAN • [email protected] Tel: (+48) 22 848 60 21 • [email protected] Tel: (+40) 213 110 091 • [email protected] [email protected] Roberts Publishing S.R.L. Poland Czech Republic Hungary and Germany CZECH EDITOR...... Sales & events Manager RO...... DESIGN...... 20-22 Slanic Street, entrance B, Office 2, District NINA FIBIGEROVÁ • [email protected] Adela Balan JOZEF NEVEDEL • [email protected] 3, Bucharest t +48 22 310 22 06 t +420 226 207 800 Romania Tel: (+40) 743 794 364 • [email protected] t +49 211 913 76 50 Polish EDITOR...... DISTRIBUTION CEE...... Tel/Fax: (+40) 213 110 091 t +36 1 411 3300 Wojciech KoŚĆ • [email protected] Journalist...... CZ PRESS, PressMedia, [email protected] Donata Karpik EUROPRESS, RUCH, JARD-PRESS ISSN: 1214-9896 Polish Photographer...... Tel: (+48) 22 606 39 73; • [email protected] Cover photo © Alain St-onge | Dreamstime.com Bartosz Modrzewski • [email protected] office manager CZ...... all correspondence to: contributorS...... Petra Šustová ROBERTS PUBLISHING MEDIA GROUP, s.r.o. AMELIA TURP-BALAZS, Tel: (+420) 224 225 601 • [email protected] Václavské náměstí 19, 110 00 PRAGUE 1 Marcin Śmietana Tel: (+420) 224 225 601 • Fax: (+420) 224 222 308 office manager PL...... [email protected] • www.cijjournal.com

7956EC EVENTS & editorial coordinator...... Anna Mieczkowska ROBERTS PUBLISHING Sp. z o.o. Dušan Krnjaja Tel: (+48) 22 606 39 73 • [email protected] UL. RAKOWIECKA 36, 02-532 WARSAW Tel: (+420) 222 220 800 • [email protected]

7956_CIJ Advert_June 11.indd 1 23/05/2011 09:16:07 4 Issue 07 Editorial

states failing as investors

Back in 2008, a discussion was going on in Poland about the possibility of using Chinese contractors to help complete the huge volume of construction work required before the top national football teams from around Europe begin showing up in June 2012. Covec, the Chinese contractor Poland’s road agency (GDDIkA) has just fired from the A2 motorway job, was unable to live up to its promise to build the road at a miraculously low price.

It’s easy to blame contractors for going over budget, or for failing to estimate the final cost accurately. But it’s the investor’s job to weed out overly-optimistic bidders. Unfortunately, the A2 fiasco fits into a pattern of wretched incompetence by the state as investor. As the biggest spender in the country, you’d think governments would understand that assembling hyper- competent teams to manage investments would be a matter of the highest importance. Instead, they get yes-men who refuse responsibility by choosing on price alone.

To make Poland’s Euro 2012 preparations even worse, it was recently discovered that the stairs at the new national football stadium are so dangerous that completion has been set back by months. Again, it would be simple to blame the builders or designers, but the responsibility for overseeing investments lies ultimately with the investor.

Botched state investments are in no way a problem limited to Poland. The Czech Republic, which consistently builds motorways at prices far higher than those in Western Europe, recently said it wouldn’t use CZK 620m in subsidies from the EU for road construction work. The reason was that officials fear its planning is riddled with corruption. Romania has suffered similar difficulties with EU funds.

It’s just not good enough. Firing those who made poor decisions is the obvious place to start, but it’s really the whole system that needs to be overhauled. Governments across Europe are demanding more from taxpayers at the same time as they cut back on the services they offer. It’s time they took a closer look at the effectiveness of the money they do manage to collect.

It’s not just that taxpayers have the right to demand competence and efficiency, but because an inability to invest well is just plain dangerous: Greece spent billions on new stadiums for the Athens Olympics and extended metro lines to provide access to them. Today, many of them serve as little more than expensive grass farms. Spain and Portugal absorbed billions and billions of subsidies for the construction of gleaming new infrastructure. Need we say more?

CEE countries never received the massive level of subsidies and loans from the European Union that earlier entrants did. There simply wasn’t the money available. Considering how things have turned out, perhaps that’s just as well.

30.06.2011 | Source: OECD

Robert McLean Editor In Chief This issue is printed on 100% recycled paper

Indicators REGIONAL 5

Rates 2010/2011 MAIN ECONOMIC INDICATORS 2010/2011

consumer price indices, index 2005=100 CZECH REPUBLIC

Month 11 12 01 02 03 04 Month 10 11 12 01 02 03 04 Canada 109.8 109.8 110.1 110.4 111.6 112.0 Unemployment rate 8.5% 8.6% 9.6% 9.7% 9.6% 9.2% 8.6% Czech Republic 115.1 115.7 116.5 116.6 116.7 117.0 No. of unempl. (in th.) 495.2 506.6 561.6 571.9 566.9 547.8 513.8 Germany 108.5 109.6 109.2 109.8 110.7 110.5 CPI monthly change -0.2% 0.2% 0.5% 0.7% 0.1% 0.1% 0.3% Hungary 131.1 131.6 132.6 133.1 134.6 135.5 CPI yearly change 2.0% 2.0% 2.3% 1.7% 1.8% 1.7% 1.6% Japan 99.9 99.6 99.4 99.3 99.6 99.9 30.06.2011 | Source: ČSÚ, MPSV Poland 116.1 116.6 118.0 118.2 119.3 119.9 hungary Slovak Republic 115.7 115.9 118.1 118.5 118.9 119.5 Switzerland 104.7 104.8 104.4 104.8 105.5 105.6 Month 10 11 12 01 02 03 United Kingdom 115.6 116.8 116.9 117.8 118.1 119.3 Unemployment rate 10.9% 10.7% 10.8% 11.2% 11.5% 11.6% 11.4% United States 112.0 112.2 112.8 113.3 114.4 115.2 No. of unempl. (in th.) 466 460 462 474 487 490 481 30.06.2011 | Source: OECD CPI monthly change 0.4% 0.3% 0.4% 0.7% 0.4% 1.1% 0.6% CPI yearly change 4.2% 4.2% 4.7% 4.0% 4.1% 4.5% 4.7% currency exchange rates, national units per usd 30.06.2011 | Source: HCSO

Month 11 12 01 02 03 04 poland Canada 1.01 1.00 0.99 0.99 0.98 0.96 Czech Republic 18.06 19.03 18.27 17.76 17.39 16.77 Month 10 11 12 01 02 03 04 Hungary 202.07 205.95 205.97 198.15 193.11 183.24 Unemployment rate 11.5% 11.7% 12.3% 13.0% 13.2% 13.1% 12.6% Japan 82.55 82.58 82.58 82.54 81.66 83.17 No. of unempl. (in th.) 1832.6 1901.3 1912.3 2104.0 2150.0 2140.0 2040.0 Norway 5.97 5.85 5.85 5.73 5.59 5.40 CPI monthly change 0.3% 0.3% 0.3% 1.0% 0.2% 0.9% 0.5% Poland 2.90 2.91 2.91 2.87 2.86 2.74 CPI yearly change 2.6% 2.6% 2.9% 3.5% 3.3% 4.0% 4.1% Russian Federation 30.97 30.85 30.08 29.29 28.43 28.10 30.06.2011 | Source: GUS Switzerland 0.99 0.97 0.96 0.95 0.92 0.90 United Kingdom 0.63 0.64 0.63 0.62 0.62 0.63 romania

Month 10 11 12 01 02 03 04 30.06.2011 | Source: OECD Unemployment rate 7.1% 6.9% 6.9% 6.7% 6.6% 5.9% 5.4% No. of unempl. (in th.) 645.5 633.5 630.0 615.0 600.3 539.7 493.4 long-term interest rates, percent per annum CPI monthly change 0.3% 0.5% 0.5% 0.8% 0.8% 0.6% 0.7% CPI yearly change 7.9% 7.7% 8.0% 7.0% 7.6% 8.0% 8.3% Month 11 12 01 02 03 04 30.06.2011 | Source: WS, MMSSF Czech Republic 3.6 3.9 4.0 4.1 4.1 4.1 Germany 2.5 2.9 3.0 3.2 3.2 3.3 Hungary 7.4 7.9 7.7 7.4 7.3 7.1 slovak REPUBLIC Japan 1.2 1.1 1.2 1.2 1.2 1.2 Norway 3.3 3.6 3.8 3.8 3.8 3.8 Month 10 11 12 01 02 03 04 Poland 5.8 6.0 6.3 6.3 6.3 6.1 Unemployment rate 12.3% 12.2% 12.5% 13.0% 13.2% 13.1% N/A Russian Federation 7.8 8.0 8.0 8.0 8.1 N/A No. of unempl. (in th.) 330.2 328.3 334.9 346.2 350.9 350.3 N/A Slovak Republic 3.8 4.1 4.2 4.2 4.3 4.3 CPI monthly change 0.0% 0.3% 0.4% 1.9% 0.3% 0.4% 0.4% Switzerland 1.6 1.6 1.8 1.9 1.9 2.1 CPI yearly change 1.0% 0.9% 0.7% 3.0% 3.3% 3.6% 8.3% United Kingdom 3.3 3.6 3.7 3.8 3.7 3.8 30.06.2011 | Source: ŠÚSR 30.06.2011 | Source: OECD RATES AGAINST EURO SHORT-term interest rates, percent per annum Canadian Dollar CAD 1.43 Month 11 12 01 02 03 04 Czech Koruna CZK 24.22 Canada 1.2 1.2 1.2 1.2 1.2 1.2 Danish Krone DKK 7.46 Czech Republic 1.2 1.2 1.2 1.2 1.2 1.2 Hungarian Forint HUF 265.44 Germany 1.0 1.0 1.0 1.1 1.2 1.3 Japanese Yen JPY 117.55 Japan 0.3 0.3 0.3 0.3 0.3 0.3 Norwegian Krone NOK 7.84 Hungary 5.9 6.2 6.1 6.9 6.6 6.1 Polish Złoty PLN 3.95 Norway 2.5 2.6 2.6 2.6 2.6 2.7 Pound Sterling GBP 0.89 Poland 3.9 4.0 4.1 4.2 4.2 4.3 Romanian Leu RON 4.15 Russian Federation 4.6 4.7 4.3 4.6 N/A N/A Swedish Krona SEK 9.01 Switzerland 0.2 1.7 1.7 1.7 0.2 0.2 Swiss Franc CHF 1.22 United Kingdom 0.8 0.8 0.8 0.8 0.8 0.8 US Dollar USD 1.47 30.06.2011 | Source: OECD 30.06.2011 | Source: ECB 6 REGIONAL Real Talk

highlights Passer goes for spec in Ostrava it will be possible to complete the project without having to wait... Passer goes for spec in Ostrava | 10 Works have resumed on the 24,600 sqm office portion of Nová Karo- the developer took part in the privatization Bellona lina Park by PasserInvest Group and Multi Development in Ostrava. A Ghelamco buys publishing house. Or its land | 2 + new investor, Gemo Olomouc, which is the project’s general contrac- warehouse space tor at the same time, has thrown in CZK 200m (€8m), in exchange for ...retail financing for projects is now easier to come by a 40 percent stake in the project, which will provide work immediate- Re-launching retail developments | 10 ly for its employees. The project, which forms a gate to the historical heart of Ostrava, is scheduled for completion in spring 2013. “The crisis has frozen the office market in Ostrava...with the entrance it seems clear this is what the developer is after. of the new strategic partner and the allocation of more of our own Taking over Bellona gives it some 8,500 sqm between Wronia, Grzy- 10 capital, it will be possible to complete the project, without having to bowska and Łucka streets in Wola, with the somewhat dated Bellona wait for [a pre-lease] which might not turn up as well,” says Radim headquarters on one of the plots. Ghelamco claims that it will keep Passer, chairman of the board of PasserInvest Group. the building, but modernize it. The company wouldn’t say what it PasserInvest has retained 50 percent in the office project, while Multi- was going to do on the other plots but they will clearly be intended Development retaining a 10 percent share. Passer is determined to to complement Ghelamco’s flagship development at the moment, start construction speculatively, and hopes he can get financing to the 100,000+ sqm office tower Warsaw Spire. Ghelamco did much to supplement the CZK 500m he and his partners are prepared to cover establish Mokotów as an office hub for Warsaw. The same process from their own pockets. could now be underway in Wola. In addition to approximately 25,000 sqm in office space the building will offer 3,700 sqm of retail space. The developer hopes to have lease contracts signed for 15 percent of the space by the end of the year, despite the current 10 percent vacancy in Ostrava’s office market. Multi Development’s shopping and leisure center is scheduled to Re-launching retail developments open next year, followed by the office portion a year later. In spring 2013 the reconstruction of the original industrial Trojhalí should be completed as well. The total investment into these three projects is Polish retail projects are the current flavor of the month, and not expected to run to CZK 7bn (€287m). just for investors looking for (relatively) safe assets. Developers are well-aware that dozens of Polish towns still lack any modern retail Goodman has up to 135,000 sqm facilities whatsoever. Financing was axed across the board during

the financial crisis, causing many projects to be placed in deep of space near Budapest available + Miskolc freeze. Some are now being defrosted in order to take advantage for immediate development. + Nyíregyháza of the current lack of competition. + Győr M3 Budapest M1 + Debrecen Ghelamco buys publishing house. Or its land Two examples include Mayland’s Nimfea scheme in Piła, Apsys’ M0 Gyál Łacina in Poznań, where, despite big projects like Stary Browar, If you want to expand your business Üllő 10 there’s allegedly still room for more. Agencies reports that retail M7 Goodman can deliver for you. +Kecskemét Ghelamco has moved a step closer to developing more office space financing for projects is now easier to come by, not least because M6 2 in the Wola district of Warsaw. To that end, the developer took part many retailers seem to have their worst troubles behind them and M5 - as the only bidder - in the privatization of the Bellona publishing are looking for new space. Completions in 2011 will still be weak, + Szeged house. Ghelamco bought Bellona for PLN 47m (almost €12m) accord- but the final figures for 2012 could end up being significantly + Pécs ing to a press release that recounts at length what a quality business stronger. Bellona is. It mentions the company’s land assets only in passing, but www.goodman.com/hu warehouse space+

Goodman has up to 135,000 sqm of space near Budapest available + Miskolc for immediate development. + Nyíregyháza + Győr M3 Budapest M1 + Debrecen M0 If you want to expand your business Gyál Üllő M7 Goodman can deliver for you. +Kecskemét M6

+ Szeged + Pécs www.goodman.com/hu 8 REGIONAL Company News

VF Corporation Elko UniCredit

VF Corporation has extended its contract Czech beverage wholesaler Elko has opened UniCredit Bank and companies related to in PointPark Prague D8 in a transaction its first ever cash & carry unit in the Berounka the UniCredit Group are relocating to the brokered by CB Richard Ellis. The fashion Park Plzeň retail park. The move is part of an Filadelfie building in Prague 4, developed by producer of jeans and sport brands such as attempt by the operators to innovate in a PasserInvest in the BB Centrum complex. Wrangler, Lee, The North Face, Napapijri and fierce competitive market. Elko’s first unit in a It’s the largest deal of the year in the Czech Nautica leases 24,768 sqm of warehouse in retail park is being described as the first cash office market, one that will see UniCredit fill the park. The park is one of two parks & carry to open in a retail park in the Czech 14 floors (of 17) in the 26,700 sqm building. developed and operated by PointPark Republic. Cushman & Wakefield arranged Clifford Chance advised the tenant. Properties in the Czech Republic. the lease of the Plzeň outlet.

. Scala IRP Partners ACS PSJ Scala IRP Capital Partners acquired Galeria The Spanish construction giant ACS acquired PSJ is to open the M5 Mall in Ryazan in Łomża from private investors as its first majority stake in Hochtief in a hostile take- September. The €120m project is a joint investment in Poland. Galeria Narew has over it started last year. Hochtief’s venture between PPF Real Estate Holding B.V. already received its building permit approval, shareholders have already approved the new and PSJ New N.V. The Czech Export Bank and and construction is scheduled to begin in supervisory board, controlled by ACS. The EGAP financed the project. The 70,000 sqm August. The 40,000 sqm shopping center will Spanish company hopes Hochtief’s strong mall is located in Rjazan near the M5 highway have over 90 stores and 1,250 parking places balance sheet sum and order book will help it connecting Moskva with Čeljabinsk, and will and is the only center of its size the Łomża face the severe conditions on its home serve a catchment of 500,000 people. region. Scala is structured as a Luxembourg market and reduce its debt worth €8bn. closed-ended fund.

PointPark Properties VGP TPA Horwath PST CLC has signed a contract with PointPark The developer VGP has sold an 80 percent Properties(P3) to lease 13,326 sqm of office Consulting company TPA Horwath signed a stake in six of its warehouse areas in the and warehouse space in PointPark Prague lease agreement in Murawa Office Park in Czech Republic. The transaction, worth D1. The logistics provider has chosen the Poznań, an Alco Investments which is €140m, is to be completed in the third location with regard to a long-term client it owned by Aiga Investments and Alco. It quarter of 2011 and includes some Czech has in the automobile sector. Of the 140,000 will move into its new 700 sqm offices and development projects. VGP will keep facility sqm of space offered by the park, just one has reserved a further 200 sqm in 2013. management of the parks. The transaction 5,300 sqm unit is left, leading P3 to begin Cushman & Wakefield represented the follows the purchase of an 80 percent stake preparation works on a new 40,000 sqm tenant in the transaction. Murawa Office Park in six industrial parks around Prague by built-to-suit warehouse. was completed in March 2011. About 1,000 European Property Investors Special sqm or 25 percent of the office space in the Opportunities in spring 2011. project is still empty. This issue is printed on 100% recycled paper

Company News REGIONAL 9

rapidly growing number of people moving project also covers the construction of a into ever-newer phases of residential concert hall for Poland’s Radio Symphony PKP projects. The specific opportunity concerns Orchestra. Along with investments to an 8 ha plot currently owned by the develop the connecting infrastructure. The Polish State Railways (PKP) says its tenders pharmaceutical company Polski Holding bank has previously provided three loans to for non-essential real estate are gradually Farmaceutyczny (PHF). The plot is located Katowice amounting to some €93m for meeting with greater success. Earlier in the near the North Bridge, a key route between upgrading the municipal infrastructure. crisis, just 21 percent of the tenders it Białołęka over the Vistula River to the metro announced were actually taking place, a line on the other bank. According to PHF, the number that’s jumped to 31 percent in 2011. plot will soon be ready for sale. In all, the company plans to sell roughly 16 percent of the 104,000 ha it owns. It envisions ghelamco making PLN 190m (€48m) from such sales in . 2011. Ghelamco plans to ratchet up its turnover in European Investment Bank the next two years to more than €1bn. It plans to do this through the sale of some of The European Investment Bank (EIB) is its ongoing projects. The company has lending PLN 254.2m (€65m) to re-develop 65,000 sqm of office space under PHF the post-industrial city center of Katowice, construction in Warsaw at the moment, with with emphasis on its cultural district. The EIB 248,000 sqm planned over the next five Local authorities in the Białołęka district of funds will finance construction of an years, including its flagship project, Warsaw Warsaw are lending support to the idea of International Congress Center providing Spire office tower of more than 100,000 sqm. developing a major retail center to serve the accommodation for up to 8,000 people. The 10 REGIONAL EuroNews

ACS buyout of Hochtief goes through their current premises or optimizing their existing network. The Spanish contractor ACS acquired majority Expansion still hasn’t become their biggest priority, so it’s not stake in the German builder Hochtief in a hostile surprising that there’s no immediate end in sight on the supply take-over it began last year. The German construc- side. Developers see little incentive to push for speculative new tion giant held out for nine months, until ACS’s stake in the com- schemes, so it’s only a matter of time before such forces squeeze pany crossed the 50 percent threshold. Hochtief’s shareholders higher rental levels from the existing industrial stock. have already approved the new company’s supervisory board, Vincent Lottefier, Head of JLL’s Corporate Solutions EMEA team, which is now dominated by ACS. The Hochtief CEO had resigned says that new completions and future supply have reached his- shortly beforehand. toric lows in EMEA, leading to limited choice. In Western Europe The Spanish company is hoping that Hochtief’s strong balance completions over the next 12 months will be below the five year sheet and order book will help it weather the severe conditions average, with the majority pre-let or built-to-suit. “This shortage it currently faces back home, and work through the €8bn it cur- of modern supply will lead to tougher market conditions for in- rently carries in debt. The political battle to take over Germany’s dustrial occupiers next year, as incentives are expected to move biggest construction group has dragged on since September in and, whilst prime rents are still below their peak levels, te- 2010, when ACS made its opening move. ACS had grabbed 30 nants will be faced by escalating rents in most European markets percent of the company by February, with Hochtief proving by the end of this year due to limited supply levels and strong unable to repulse the Spanish aggression. Ironically, it’s Spain’s competition for space,” comments Lottefier. Rising inflation and construction sector that’s facing a 15 percent drop in 2011, while austerity measures could knock down the economic growth, Germany’s is expected to grow by 1.7 percent. consumer spending and corporate confidence, the main drivers underpinning occupier demand, warns JLL.

Meinl and Atrium reach truce A bitter dispute between Atrium European Real Esta- te and Julius Meinl V and the Meinl Bank was settled by an agreement under which the two dropped their charges against each other. Atrium is the re-named Meinl Proper- ty Group, whose shareholders claimed had been swindled out of billions of Euros by Meinl and his bank. It had been suing the coffee bean heir for €2.1bn. Meinl spent a couple days in jail back in the spring of 2009 and was forced to post €100m in bail. Under the agreement, the companies will no longer have any business dea- lings or ties and both have dropped all claims against the other.

WestLB restructuring agreed A break in the impasse over the break-up of WestLB appeared to have been reached at the end of June, which had been given as a deadline by the EU. The bank’s owners reported agreeing to a restructuring in which the bank would be pared down to an institution with a balance sheet of no more thatn €45bn which would cater to re- JLL: Industrial rents headed higher gional savings banks. It would shed 90 percent of its work force Recent research from Jones Lang LaSalle indicates and would have a year to sell its corporate lending and project that despite increasing confidence from industrial finance units. The plan is subject to approval by the EU’s compe- occupiers, they’re still in the phase of upgrading tition commission. This issue is printed on 100% recycled paper

Financial REGIONAL 11

Europa Capital sells, gains new partners Europa Capital LLP sold the second and final phase of Office Geographically, the companies make a good fit as well. Both Campus Gasometer in Vienna’s Simmering district to Bank Aus- companies are global, but Prologis, while it was forced by the tria Real Invest on behalf of the Europa Fund for roughly €75m. crisis to abandon its plans to expand throughout Asia and Brazil, The scheme’s first phase was completed and sold in 2004 on the has a strong foothold in Europe. AMB, however, has a foothold back of a long-term lease to StatistikAustria. in China and Brazil, countries that are crucial to growth for any The scheme’s second phase is a 28,000 sqm building with floor company with global ambitions. spans of 15 and 18 meters. Tenants of the building include Nokia CEE director Ben Bannatyne says the new Prologis will continue Siemens Networks, Fujitsu, LG Electronics, Winere Wohnen and its cautious approach for the time being in Central Europe. So, Hitachi. Its development manager was RED Real Estate Develop- rather than buying new land, it will keep filling in industrial parks ment. that still have room for construction on the basis of specific re- Just months after its tie-up with Rockefeller Group and Mistu- quirements. bishi Estate, Europa Capital has carried through on one of the As important as the potential for future growth is, though, is components of that deal by allowing eight of its top manage- how the companies deal with old liabilities. “Prologis balance ment team to become equity partners. Erik Ruane, Nic Fox, Rob sheet took a battering over the last couple years,” admits Dunne. Sim, Belinda Chain, Richard Collins, Kevin D’Arcy, Simon Hooper “AMB’s did as well but to a lesser extent partly because they were and Jason Oram have joined the founding partners along with less exposed and less leveraged going into the downturn. When The Rockefeller Group as owners in the business. you put the two companies together we have a stronger balance Charles Graham (one of the founding partners) says the move sheet and a greater ability to continue to deleverage the merged was always going to be necessary at some point, but the deal company. That makes us more attractive and more certain pros- with The Rockefeller Group provided a specific method for ac- pect from an investment perspective. It also over time reduces complishing it. our cost of debt so we become a lot more efficient.” “We wanted to spread the ownership more widely,” says Gra- ham “and as part of the deal with Rockefeller/Mitsubishi, we organized that we would make available some of the remaining Philip Dunne (Prologis) ownership that we retained to the next tier, and The Rockefel- ler Group contribution to that part of the agenda was that they would make financing available.”

Merger deepens Prologis pockets The merger between the world’s two biggest players in industrial real estate development took place at the sort of speed few buildings these days are sold. Philip Dunne (CEO for Europe) says that discussions first got underway in November 2010, and that by January, the deal had been agreed. The basic rationale behind the deal was the way the two companies complemented each other. AMB began life as a fund and investment manager, while the old Prologis added such capabili- ties to its development focus only in more recent years. They also had a slightly different approach to the business of developing and investing in industrial real estate, with AMB more strict in its search for ports and airport properties, while Prologis looked for a wider variety of assets. “Prologis was perhaps more of an all things to all people type en- terprise,” says Dunne. “That was partly what got us into a little bit of trouble in the downturn and so we got very focused in considering strategically where we would invest on a go forward basis.” 12 REGIONAL Residential

Even giants have fallen in Consolidation this crisis as a long-overdue coming for CEE cleansing takes place residential sector Maximilian Mendel

Dwelling completions have been falling since 2008 across CEE The commercial residential market in Central and Eastern Europe is highly fragmented. In fact there are thousands of residential developers active in CEE. (Just for the sake of the Top 50 ranking, REAS analyzed data of more than 2,500 companies.) This is in stark contrast to the number of major warehouse developers active on a regional level, while the number of retail developers is equally manageable.

The largest residential developers within CEE, Dom Development and J.W. Construction (both from Poland) and the Czech-based Central Group were able to produce around 1,000 dwellings Dwelling completions per annum during 2000-2010. And yet, their market shares range from 1 - 3 percent of the total residential output in their respective countries. Any attempts to consolidate the market disintegrated during CEE’s boom period, when just about everyone with any money turned into residential developers. certain that the CEE markets will undergo developers is arguably the greatest threat a dynamic transformation. The list of top to market stability in Poland. Regardless of Midway through 2011, each of the national market players is likely to undergo several an already large offering (40,000 dwelling markets in CEE is highly differentiated, changes over the next few years and are available in the six largest cities alone), but one common feature is that they are the same ranking could soon look quite residential developers launched a huge almost certainly all on the cusp of a period different. number of new projects to the market in of consolidation. the first half of 2011. With competition Compared to other countries in the on the rise, a further correction in pricing Change is a gradual process in the more region, Poland’s residential market cannot be ruled out. resilient Polish market, unlike in Romania is demonstrating the most robust which has witnessed some spectacular performance. In spite of a more In the Czech Republic only the largest and failures by development companies. conservative lending approach, banks financially strongest market players are Also there are some strong developers have continued issuing mortgage loans able to continue with new construction which are realizing large-scale residential through the crisis, and we observed activity. In fact, they’ve been busy putting schemes and a few new major players relatively steady interest from home highly competitive products on the market entering the market. Notwithstanding buyers in the primary market offering. In in recent months. In contrast, there are the pace or manner of change, it seems fact, excessive optimism on the part of many developers struggling to sell their This issue is printed on 100% recycled paper

Residential REGIONAL 13

existing product. They won’t be helped by Index of pre- and post-crisis development of residential prices. 100 = Q4 2006 a planned rise in the VAT rate applicable for housing (from 10 percent to 14 percent in 2012 and to 17.5 percent in 2013) which is expected to impact heavily on the development of the Czech residential market.

Slovakia’s commercial housing market was somewhat undeveloped on the eve of EU- accession and developers largely targeted foreign investors during the boom period instead of local home buyers. As a result, homes currently on offer were not adjusted Price index: 100 = Q4 2006 index: Price properly to local demand. They have little hope of selling their current stock without resorting to a drastic price adjustment. However, since the Slovak market is small and dominated by a few large players, there are not many developers yet willing to change their pricing greatly. Thus, the market remains in pause mode. Perhaps a drop in land prices might be able to stimulate the market.

The current situation in Romania is still characterized by weak economic performance which impacts on households’ In Hungary the large share of ready, yet The predicted consolidation of the purchasing power and on the confidence unsold stock in the primary market offer developer’s market is taking place across level of potential home buyers. In addition, remains problematic for developers. In CEE and it will be a long-lasting process the credibility of the developer’s market Budapest approximately two-thirds of all worth monitoring. In fact, the rankings has weakened significantly through apartments available for sale on the market which follow reveal that the first changes an unfortunate series of insolvencies, are located in completed developments. have already taken place, visible in the bankruptcies and frozen projects. There‘s no There is still a surplus of supply over absence of some former major players such lack of projects that have been announced, demand on the residential market, in as the Spanish developer Martinsa-Fadesa but haven‘t gotten underway yet. Many spite of the fact that developers radically or the Warsaw-based Edbud which went more have begun but have not yet been reduced new supply. Also, the weakness bankrupt. In cooperation with CIJ Journal, completed. This makes it difficult to quantify of the economy and particularly of the we would be delighted to present future the current offering or to present a realistic Hungarian banking sector is hindering a updates on the regional top residential pipeline of new projects. Irrespective of the quicker recovery of the housing market. developers. enormous potential Romania’s market has, Few developers can introduce new projects it’s difficult to see an increase in the number to the market, primarily due to financial Maximilian Mendel is Associate Director, of transactions, to say nothing of prices, any restrictions. However, a properly-adjusted CEE Research & Advisory at REAS | Residential time soon. market offer could be highly competitive Advisors over the existing offer. 14 Regional Top 50 Residential

Residential Developers in CEE: 2000 - 2010

2 Dom Development S.A. erty market with residential projects in Jarosław Szanajca, CEO Warsaw. Now a leading company in its Poland J.W. core market, J.W. Construction has begun Total Units Completed: 12,870 Construction increasing the scope of its investments Total Projects Completed: 69 Holding S.A. beyond the nation’s capital. It also acts Tomasz as a general contractor. In total, the com- Active since since 1996, Dom Develop- Panabażys pany has built, or has in planning 23,000 ment is a leader on the residential mar- CEO flats and 350 detached houses. ket, specializing on both high-end and mass market projects. In all, by the end of 2010 Dom Development had delivered 15,000 flats in Warsaw and Wrocław. Poland It expects to complete another 1,100 this Total Units Completed: 12,128 year. Many of its projects are recognized Total Projects Completed: 48 as among the most exclusive investment in the country. The developer began on the Polish prop- This issue is printed on 100% recycled paper

Top 50 Residential regional 15

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Central Budimex Group Nieruchomości Dušan Kunovský Henryk Urbański Chairman of Chairman of the the Board Board and CEO

Czech Republic Poland REAS – Residential Advisors has Total Units Completed: 6,091 Total Units Completed: 5,922 worked together with CIJ to pro- Total Projects Completed: 75 Total Projects Completed: 28 duce the TOP 50 Residential listing this month, providing data and co- Central Group entered the Czech market in This subsidiary of Poland’s largest contractor preparing the ranking for it. 1997 by catering to consumers interested in (Budimex) began in Warsaw before expand- discount level family homes. A decade and ing to other major cities to provide large-scale 113 projects later, the company had shifted housing. Budimex has delivered over 5,000 to more mid-market price tags. The company flats and now one of the country’s strongest has stayed clear of credit (by tapping its own players with base capital of PLN 65.3m. It was equity and customer installment payments). awarded third-prize for the strongest brand It brought in Swiss investor GPC in 2009. on Warsaw’s housing market. 5 6 Multi Hekk FINEP Holding Krzysztof Kasprzyk, CEO Tomáš Pardubický CEO Poland Total Units Completed: 4,428 Czech Republic Total Projects Completed: 15 Total Units Completed: 4,517 Total Projects Completed: 16 Established in 1990, Multi-Hekk Nieruchomości provides construction servic- While this Czech developer has become in- es and materials, but its core activity are real creasingly active in commercial projects, it estate investments and the manufacturing of established itself as a leader in the residential ceramic and carpentry materials. It specializes sector, completing 16 projects and nearly on reducing development costs and has de- 6,000 units since 1995. The company expand- livered 6,000 flats to the broader market. ed to Slovakia in 2006 with its project Jégého alej in Bratislava, and debuted on the high- end market with Císařka villas in Prague 5. 16 Regional Top 50 Residential

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Ataner Skanska Grupa Inwestycyjna Ryszard Szulc Reality Hossa S.A CEO Bjorn Mattsson, Mariusz Gawron Managing CEO Director Poland Total Units Completed: 3,840 Total Projects Completed: 55 Poland Czech Republic Total Units Completed: 4,383 Total Units Completed: 4,470 Grupa Inwestycyjna Hossa has devel- Total Projects Completed: 23 Total Projects Completed: 47 oper dozens of apartment schemes with over 4,000 flats, along with half a million Ataner has been delivering both residential Skanska has been a major force in the Czech square meters of retail and office build- and commercial projects in Poland for the market since 2000. Along with vast construc- ings. It’s now one of the most recognized last 20 years, but its core market is the city of tion activities, the company has developed brands in northeast Poland, providing Poznań. In all, Ataner has completed, 7,500 4,470 units in 47 projects. It develops a wide complete development services, includ- flats, along with commercial space. It’s usually variety of homes ranging from starting flats ing planning and operations. As an active the investor, developer and general contrac- to mid-market apartments. It’s begun work member of the Polish Developers Assoc., tor for its projects, including work on Polanka on its first project in Liberec and is looking at it promotes legislation and regulations 2, the largest residential project in the region. other regional cities as well. supporting the residential industry. 10 11 Qualia Develop- ment P.I.B. EBEJOT Leszek Piotr Andrzej Jaczewski and Regina Katner Nałęcz ViceChairman of the Board CEO and Board of Directors

Poland Poland Total Units Completed: 3,037 Total Units Completed: 3,357 Total Projects Completed: 14 Total Projects Completed: 19

Przesiębiorstwo Inwestycyjno Budowlane A subsidiary of PKO Bank Polski Capital Ebejot’s built its first apartment complex in Group, Qualia Development develops large- Mokotów in 1999. Since then, it’s increased scale projects featuring coherent architectur- its portfolio to 29 buildings with a land bank al concepts that fit into the image of the cities of 20 ha. Now an established brand in Poland, and districts they’re located in. The latest flag- the company has won various awards, in- ship investment of Qualia is a series of seven cluding Building of the Year in 2005. high-end buildings in the Flotylla district to be delivered in Miedzyzdroje. This issue is printed on 100% recycled paper

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15 Top 10 Residential Developers in Poland

Invest 1. Dom Development 12,870 Komfort S.A. 2. J.W. Construction Mieczysław Ciomek, CEO Holding 12,128 3. Budimex Nieruchom. 5,922 Poland 4. Multi Hekk 4,428 Total Units Completed: 2,797 5. Ataner 4,383 Total Projects Completed: 27 6. Grupa Inwestycyjna Hossa 3,840 Operating on Polish real estate market 7. Qualia Development 3,357 since 1995, Invest Komfort is a subsidiary 8. P.I.B. EBEJOT 3,037 Baltis, a company formed by SGI Baltis 9. PBO Dach Bud 3,035 oraz Porta Drzwi. Invest Komfort is active 10. Polnord 2,951 in Gdynia, Gdańsk and Sopot, producing purely high-end projects in exclusive lo- Total Number of Units are based on cations. In 16 years of business, it’s deliv- residential units completed ered 27 projects. between 2000 – 2010

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PBO Dach Bud Polnord S.A. Allcon Jan Chorostkowski Bartosz Puzd- Budownictwo CEO rowski Mariusz Białek CEO CEO Poland Total Units Completed: 3,035 Poland Total Projects Completed: 12 Total Units Completed: 2,832 Total Projects Completed: 31 Begun as a small construction company Poland in 1986 PBO Dach Bud did primarily mi- Total Units Completed: 2,951 Allcon Group specializes in build-to-suit nor construction and renovation work, Total Projects Completed: 31 projects, along with delivering its own before expanding its activities to include developments. But it has a wide spec- development. Today, it’s become one of Set up before 1989, Polnord was active pri- trum of additional activities, including the largest development companies in marily in the development of residential developing and running hotels, office Lower Silesia. Its first residential project projects in the Tricity area. But it’s also actove and retail properties. Its core markets are was a housing complex in Sąsiedzka in om Łódź, Wrocław and Poznań, along with Gdynia, Gdańsk and Sopot. Formed 16 1996. In all, the company’s delivered second-tier cities like Olsztyn or Szczecin. years ago, the company has delivered 20 225,000 sqm of residential space. Recently completed residential schemes residential projects from the high-end to include Osiedle Jabłonowa, Kamienica pod the mass markets. Wrzosem and Baltic Center. 18 Regional Top 50 Residential

16 BRE. 17 Locum S.A. Krzysztof Suskiewicz Autóker Holding CEO Eliav Maimon CEO

Hungary Poland Total Units Completed: 2,661 Total Units Completed: 2,794 Total Projects Completed: 7 Total Projects Completed: 30 Autóker Holding is one of the powerful play- Established in 2000, BRE. locum a subsidiary ers on Hungary’s real estate market, with of BRE Bank. Now a listed development com- particular activities on the residential and in- pany, the company operates on five local dustrial markets. It produced its first residen- markets where it’s carried out 15 residential tial project in 2002, the 316 unit Cézár Ház projects with 2,700 units of 185,000 sqm of project. More recently, Autóker completed living space. BRE. locum also provides resi- Marina Part Premium, with nearly 300 apart- dential housing property management ser- ments along with commercial space. vices. 18 19 20

Inpro S.A. Prelios Eco Classic Piotr Stefaniak Małgorzat Kosińska Wojciech Fabiński CEO CEO CEO

Poland Total Units Completed: 2,636 Total Projects Completed: 13

Poland Prelios is a relatively new name to the Poland Total Units Completed: 2,640 market, having traded under the Pirelli Total Units Completed: 2,545 Total Projects Completed: 26 Real Estate moniker in the past. The com- Total Projects Completed: 15 pany carried out over 2,500 residential This company made its debut this year on the units in Poland between 2000-2010. The Eco Classic was established in1983 as Grupa Warsaw Stock Exchange, a daring move at a company’s other two markets are Italy Eco. Originally a project manager and general time when investors were suspicious about the and Germany, but it’s currently in the contractor, it has since evolved into a devel- development sector. It was established in 1987, process of divesting itself of develop- oper focusing on upper-end residential prod- and offers apartments and houses. Inpro has 25 ments in order to focus on asset and fund ucts. It’s carried out more than 100 projects projects to date, plus a number of general con- management. and expanded from Warsaw to the Tri-city tracting and renovation deals in Gdańsk and market, as well as schemes in Germany and and the entire Tri-city market. Israel. This issue is printed on 100% recycled paper

Top 50 Residential regional 19

Vinohrady, or Belarie Park in Modřany. 21 Sekyra Group expanded to Slovakia in 2006. Top 10 Residential Sekyra Developers in Hungary Group 22 Luděk Sekyra 1. Autóker Holding 2,661 Chairman of 2. Nanette 2,094 the Board Acciona Nieruchomości 3. Cordia 1,191 Carlos de Leon 4. Real Hungary 921 Member of the Board 5. GTC 889 6. SL Group Management 848 Czech Republic Poland 7. Engel East Europe 817 Total Units Completed: 2,303 Total Units Completed: 2,172 8. Biggeorges 776 Total Projects Completed: 19 Total Projects Completed: 17 9. SCD Group 659 10. TriGranit Fejlesztési 300 Established in 1994 by Luděk Sekyra, Acciona Nieruchomości in Poland dates back Sekyra Group was focusing on lower end to 2005, when the Polish company Mostostal Total Number of Units are based on residential long before it began working Invest was bought by the Spanish devel- residential units completed on BTS office schemes like the headquar- oper Acciona Inmobiliaria. It’s been active in between 2000 – 2010 ters for T-Mobile, Nestle and Skanska. Warsaw locations like Gocław or the upscale Its residential schemes moved gradu- Mokotów. Its scheme Apartamenty Pańska ally up-market, with schemes in popular did much to bring life to the otherwise ne- areas like Residence Korunní in Prague- glected Pańska street in downtown Warsaw. 24 23 Przedsiębiorstwo Budowlane “Górski” Dolcan Bogdan Górski Sławomir Doliński CEO Chairman of the Supervisory Board Poland Poland Total Units Completed: 2,108 Total Units Completed: 2,155 Total Projects Completed: 37 Total Projects Completed: 21 Established in 1981, PB Górski is based A Warsaw specialist in development, Dolcan out of Tri-city. Initially focused on the has 20 projects delivered to date since early construction of single-family houses PB 1990s. The company’s currently working on Górski turned towards large-scale de- eight new projects, while 11 more are in the velopment in 1997 when it began tak- pipeline. Dolcan is also involved in other con- ing on the entire development process. struction activities, along with the wholesal- The company boasts 100 percent Polish ing of construction and fit-out materials. ownership and is led by its founders and chairpersons Bogdan Górski and Iwona Górska. 20 Regional Top 50 Residential

26 25 GANT DEVELOPMENT S.A. Karol Antkowiak Nanette CEO Tamir Kishon Regional Director Poland Total Units Completed: 2,049 Hungary Total Projects Completed: 23 Total Units Completed: 2,094 Total Projects Completed: 8 Another Warsaw-listed residential developer, Gant is active Gdańsk, Kraków, Opole, Nanette Real Estate Group is a dominant Poznań, and Wrocław offering both high-end player on the Central-European real estate and low-end products. In order to maintain market and has been present in Hungary activity during the downturn, the company since 2000. The Group has significant port- has taken what it calls a “flexible” approach folios in Poland, Romania, Croatia and the to pricing, preferring turnover to margin. It Ukraine. Its projects in Hungary include Man- recently bought 13,000 sqm of land in the darin Garden, Nanette City Home, Karolina Wola district of Warsaw for a project it hopes Court and Gizella House. to begin during 2011. 27 28 29

Sam 81 MPSBM AGRO - MAN Przedsiębiorstwo Daniel Kular, CEO Adam Tadeusz Beras, CEO Budowlane Margo Mariusz Czapiewski Poland Poland CEO Total Units Completed: 2,042 Total Units Completed: 2,033 Total Projects Completed: 11 Total Projects Completed: 14

Established in 1981 Sam 81 MPSBM spe- One the founding members of the Pol- cialized from the very beginning in con- ish Developers Association, Agro-Man is Poland ducting independent investments and a Warsaw-based company operating on Total Units Completed: 2,027 providing complete development ser- the Warsaw property market since 1997 Total Projects Completed: 33 vices. It produces apartments and fam- It specializes in developing small and ily homes in the greater-Warsaw area. In mid-sized residential schemes located Active in the Pomorskie region of Poland its relatively long history, it’s produced for the most part around Białołęka and for 20 years, Gdynia-based Przedsiebi- nearly 3,600 dwellings in virtually every Pruszków. orstwo Budowalne Margo is a specialist price level of the market. on housing estates and family homes in TriCity, its core market. PBM is also active in health resort investments. Its most exclusive project delivered is the hotel and apartment complex Continental in Kryni- ca .Morska. This issue is printed on 100% recycled paper

Top 50 Residential regional 21

30 Top 10 Residential Developers in Czech Republic

Echo Investment S.A. 1. Central Group 6,091 Piotr Gromniak 2. Finep Holding 4,517 CEO 3. Skanska Reality 4,325 4. Sekyra Group 2,303 Poland 5. Ekospol 1,520 Total Units Completed: 1,987 6. Crestyl 1,324 Total Projects Completed: 19 7. Geosan Development 1,053 8. Wadia 972 Echo Investment, one of the largest Polish 9. Orco Property Group 949 developers, is active in four key sectors of the 10. Daramis management 852 real estate market: housing, retail and shopping/entertainment centers, office buildings Total Number of Units are based on and hotels. The company has been active residential units completed since 1996, completing, 80 projects in 28 Pol- between 2000 – 2010 ish cities, with a total area of around 700,000 sqm.

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Spółka Ekolan S.A. AFI Europe Poland Mieszkaniowa Salwator Andrzej Biernacki Avi Barzilay Zygmunt Sułowski CEO CEO CEO Poland Poland Poland Total Units Completed: 1,946 Total Units Completed: 1,910 Total Units Completed: 1,957 Total Projects Completed: 30 Total Projects Completed: 11 Total Projects Completed: 28 Ekolan began in 1997 under the leader- AFI Europe is a real estate investment and The developer Mieszkaniowa Salwator was ship of Andrzej Biernacki providing its development company operating in Cen- founded in 1998 in Krakow. It provides the local markets in both apartments build- tral Eastern Europe and South Eastern Eu- local market with large-scale apartment ing and detached houses districts locat- rope, with a focus on the development of projects, along with smaller multi-family ed mostly at the sea side of TriCity. The large scale commercial and residential real and single-family homes. Mieszkaniowa company’s best-known project, Horyzont estate projects. It has an established track Salwator is part of the Salwator Capital estate, was built between 2004 – 2006, record for developing and managing real Group which is also active in the hotel and providing a total of 387 units. Its Osiedle estate schemes. The company began op- leisure sectors across Poland. Pogodne project in Gdańsk offered 1,000 erations in 1997 as a division of the Africa units by 2008. Israel Group. 22 Regional Top 50 Residential

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Budnex Ronson Arbet Krzysztof Nuckowski Development Management Andrzej Bogusz CEO Shraga Weisman CEO CEO Poland Poland Total Units Completed: 1,887 Poland Total Units Completed: 1,853 Total Projects Completed: 11 Total Units Completed:1,859 Total Projects Completed: 19 Total Projects Completed: 22 Operating since 1996, Budnex is a family- Operating in the Warmia and Mazury region, owned company that became a regional Ronson Development Management, whose the developer has established itself there in leader. While it provides its core markets with shareholders include GE Real Estate, ITR the past few years as an unchallenged leader. all types of projects, Budnex focuses on resi- Dori and ING OFE, was established in 2000. The company is formed by five subsidiaries, dential schemes, especially detached hous- The company concentrates on the Warsaw of which each are active in different sectors of ing developments. Along with 6,000 flats, market but has expanded to other cities. the market. Arbet concentrates on medium- Budnex has produced schools, banks and The company, which is listed on the Warsaw sized projects. 20,000 sqm of retail. stock exchange, issued PLN 87.5m in bonds in March that are due in 2014.

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Pax SM ROBYG S.A. Andrzej Ślązak Wojciech Okoński CEO CEO Poland Poland Total Units Completed: 1,818 Total Units Completed: 1,832 Total Projects Completed: 10 Total Projects Completed: 15 The history of Pax SM housing cooperative Specializing in residential projects, Robyg has dates back to 1957 and is closely connected been producing apartment buildings, estates with the the publisher of “Slowo Powszech- and detached houses districts since 2000. Ro- ne”. Its first buildings were delivered in the byg places heavy emphasis on environmen- 1960s, 20 years after the cooperative started tally sustainable technology, including solar carrying out new projects. The company car- panels and energy-efficient light fixtures. It’s ries out the development, purchasing, sale recently expanded into the office and retail and leasing of its own properties and for third sectors. parties. This issue is printed on 100% recycled paper

Top 50 Residential regional 23

Top Residential 40 Developers in Romania 1. Conarg Real Estate 1,573 ARCHICOM Grupa 2. Impact 1,475 Dorota Jarodzka-Środka 3. Adama Romania 1,469 CEO 4.GTC Romania 1,232 5. ARED 1,200 Poland 6. Tiriac Imobiliare 899 Total Units Completed: 1,762 7. Asmita Group 788 Total Projects Completed: 11 8. RCC Grup 769 9. Domus Stil 744 Founded in 1986 as an architectural studio, Archicom Group’s rapid expansion is based Total Number of Units are based on on its original designs for commercial build- completed residential units com- ings. With over 130 schemes to its credit, the pleted between 2000 - 2010 company issued bonds in June 2011 on the Catalyst market. As a developer, it’s produced 1,700 units on what it describes as the upper end of the market. Its home market is the city of Wrocław. 39 41 42

Marvipol S.A. Włodarzewska IV SM Wawel Service Andrzej Nizio Jerzy Szymański Bartłomiej Rzepa, CEO CEO CEO Poland Poland Poland Total Units Completed: 1,637 Total Units Completed: 1,769 Total Units Completed: 1,730 Total Projects Completed: 28 Total Projects Completed: 15 Total Projects Completed: 13 Wawel Service is in fact a capital group of 25 Marvipol started out as provider of early- Established in 2001, Włodarzewska IV SM companies, with the title company manag- stage development services, in particular company produces residential, office and ing the group. Operating since 1992 and a land acquisition. By 2000, the company retail projects, focusing solely on Warsaw full-fledged development company since was involved in the entire development and its environs. Włodarzewska has carried 1998, Wawel Service has established itself process and achieved a listing on the out 18 schemes with over 2,700 flats in vari- as one of the leaders of the Kraków market. Warsaw Stock Exchange in 2008. Its resi- ous points of Warsaw and Mazowieckie. The Kraków was one of the local markets that dential scheme include and Villa Avanti, company intends to deliver 100,000 sqm of grew the most during the boom years, along- Apartamenty Mokotów Park or Melody residential space over the next two years. side Warsaw or Wrocław. It might not have Park. The next phase of its scheme Zielo- the pace anymore, but still is considered one na Italia are scheduled for completion in of the most promising and challenging mar- the summer of 2012. kets around. 24 Regional Top 50 Residential

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Conarg Ekospol Adama Real Estate Evžen Korec Romania Valentin Visoiu CEO and Chair- David Flusberg President man of the Board Co Founder and President

Romania Czech Republic Romania Total Units Completed: 1,573 Total Units Completed: 1,520 Total Units Completed: 1,469 Total Projects Completed: 3 Total Projects Completed: 8 Total Projects Completed: 14

Conarg began at the beginning of economic Over its 19 years on the Czech market, Ekospol Adama was founded in Bucharest in 2004 by reform in Romania in 1991 as a general con- has completed over 35 projects and 8,000 David Flusberg, Dvir Cohen Hoshen and Isaac tractor and management group. Conarg’s flats, family homes and construction plots. It Cohen Hoshen. Since then, the company first project in Bucharest, Quadra Place, was concentrated on the lower-end of the market expanded to Moldova, Ukraine and Turkey. a complex of 343 flats which attracted an from the beginning with lowest cost guaran- In Romania, the company has completed investment of €32m. As a contractor, Conarg tees. Recently Ekospol finalized Viladomy u projects in Timisoara, Arad, Oradea, Cluj, Bra- has also been involved in projects like Link Vinořského zámku, with two other projects sov and Ploiesti. In June, Adama Holding was Mall Baneasa. scheduled for completion this year: Viladomy purchased by Immofinanz, which had held a Uhříněves and Nový Park Písnice. stake in the company since 2007. 45 48 Cresco Group Štefan Beleš Impact CEO Dan Ioan Popp CEO Slovakia Total Units Completed: 1,262 Romania Total Projects Completed: 7 Total Units Completed: 1,475 Total Projects Completed: N/A From the time it was established in 1992, Cresco Group’s focus was on residential, though it’s been active in the commercial Impact was founded in 1991, and achieved sector as well. Cresco has developed seven a listing on the Bucharest Stock Exchange residential projects, offering a total of 1,262 1996 on the its Tier I, the first time this was apartments. Three other projects are current- achieved a property company. Along with 16 ly in planning: Slnecnice Južné Mesto, Park residential projects, Impact has an 8,000 sqm Villa Havlíckova, and Park Residence Majako- office building and has been active in Con- vského. Of its completed schemes, III Towers stanta, Oradea and Ploiesti. is the most prominent. This issue is printed on 100% recycled paper

Top 50 Residential regional 25

47 Top 10 Residential Developers in Slovakia

CRESTYL 1. Cresco Group 1,262 Omar Koleitat 2. OTYK 1,137 CEO 3. J&T Real Estate 865 4. Atlas Real 816 Czech Republic 5. BZ Group 716 Total Units Completed: 1,324 6. Avestus 633 Total Projects Completed: 11 7. FINEP 599 8. Avocat 333 Crestyl entered the Czech market since 1996, 9. Vienna Gate Group 308 and gradually built up a portfolio of residen- 10. Mono 286 tial and commercial projects so that it now includes 1.8m sqm of leasable space and Total Number of Units are based on two hotel projects. It’s is now working on Li- residential units completed ben Docks along the Vltava river in Prague between 2000 – 2010 8. Shareholders include GE Real Estate, High- ridge Limited, GEM and Cheyne Capital.

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GTC ARED Romania REAS Shimon Galon, Romania Maximilian Mendel CEO of Romania Total Units Completed: 1,200 Associate Director, Total Projects Completed: N/A CEE Research & Advisory,

[email protected] Romania R E A S | Residential Advisors Total Units Completed: 1,232 www.reas.pl Total Projects Completed: 2

GTC Romania is a subsidiary of Globe Trade REAS has specialized on residential market research, development consultancy and Centre SA, a group that’s been active since capital market services since 1997, cooperating with developers, banks, investors and 1994. Currently it operates all over Central other players active on the market. Having an own database that features vast infor- and Eastern Europe. In Romania, the compa- mation on primary market projects allows REAS to provide advisory services, valu- ny’s residential projects include Rose Garden ations and long-term forecasts regarding various residential markets within CEE. In (the Colentina Residential Complex ) and Fe- 2007, REAS became a partner with Jones Lang LaSalle. licity. It’s also a prolific developer of retail and office projects. 26 Regional Top 50 Residential

CEE’s Top 50 Residential Developers of the Decade

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 2000 - 2010

Name of Developer Country Total number of Units Name of Developer Country Total number of Units 1 Dom Development S.A. Poland 12,870 26 GANT DEVELOPMENT S.A. Poland 2,049 2 J.W. Construction Holding S.A. Poland 12,128 27 Sam 81 MPSBM Poland 2,042 3 Central Group Czech Republic 6,091 28 AGRO - MAN Poland 2,033 4 Budimex Nieruchomości Poland 5,922 Przedsiębiorstwo 29 Poland 2,027 Budowlane Margo 5 FINEP Holding Czech Republic 4,517 30 Echo Investment S.A. Poland 1,987 6 Multi Hekk Poland 4,428 Spółka 7 Ataner Poland 4,383 31 Poland 1,957 Mieszkaniowa Salwator 8 Skanska Reality Czech Republic 4,325 32 Ekolan S.A. Poland 1,946 Grupa 9 Poland 3,840 33 AFI Europe Poland Poland 1,910 Inwestycyjna Hossa S.A. 34 Budnex Poland 1,887 Qualia Development (former 10 Poland 3,357 PKO BP Inwestycje) Ronson Development 35 Poland 1,859 Management 11 P.I.B. EBEJOT Poland 3,037 36 Arbet Poland 1,853 12 PBO Dach Bud Poland 3,035 37 Robyg S.A. Poland 1,832 13 Polnord S.A. Poland 2,951 38 Pax SM Poland 1,818 14 Allcon Budownictwo Poland 2,832 39 Marvipol S.A. Poland 1,769 15 Invest Komfort S.A. Poland 2,797 ARCHICOM 16 BRE. Locum S.A. Poland 2,794 40 Poland 1,762 Grupa 17 Autóker Holding Hungary 2,661 41 Włodarzewska IV SM Poland 1,730 18 Inpro S.A. Poland 2,640 42 Wawel Service Poland 1,637 Prelios (former: Pirelli 19 Poland 2,636 43 Conarg Real Estate Romania 1,573 Pekao Real Estate) 44 Ekospol Czech Republic 1,520 20 Eco Classic Poland 2,545 45 Impact Romania 1,475 21 Sekyra Group Czech Republic 2,303 22 Acciona Nieruchomości Poland 2,172 46 Adama Romania Romania 1,469 23 Dolcan Poland 2,155 47 CRESTYL Czech Republic 1,324 Przedsiębiorstwo 48 Cresco Group Slovakia 1,262 24 Poland 2,108 Budowlane "Górski" 49 GTC Romania Romania 1,232 25 Nanette Hungary 2,094 50 ARED Romania 1,200

The information in this listing is accurate to the best of our knowledge according to the data we have assembled, For more information please contact: however it is indicative only and not intended to be used as a definitive listing. In the interest of accuracy and completeness, we would encourage any comments or corrections to thelist. Robert Fletcher | CEO | +48 506 074 042 | [email protected] Real Estate Agencies in CEE: 2000 - 2010

Retail Women in End-users Real Estate in CEE: 2000 - 2010

Entrepreneurs Tenants in Real Estate in CEE: 2000 - 2010

For more information please contact:

Robert Fletcher | CEO | +48 506 074 042 | [email protected] 28 Czech Republic Development

Good luck trying to find something new among the Same old stories in bidders in Prague 7’s tender for Prague 7 tender its new headquarters Nina Fibigerová

In the latest round of a tender for Prague 7’s This leaves PPF offering Argentinská hvězda to PPF’s scheme Argentinská hvězda new headquarters, district authorities have compete with Orco, which seeks is trying offload pared down the list of offers from five to just Bubenská 1, and with the B class Mercury Tower three. They’re due to pick a winner by the building, sold by Orco’s Endurance fund for €1 end of the year, though this last round had to Volksbank (against a pledge on the building the feel of a clearance sale, with old projects worth €11.6m). on offer that developers have been unable to sell to anyone else. Mercury Tower, built on Argentinská Street offers 13,000 sqm of office space. Orco’s Prague 7 actually rejected Neocity’s bid Bubenská 1 is a landmark building with in last year’s aborted tender for a new strong transport access thanks to the headquarters, as it offered a building Vltavská metro station. (Parkhotel) that it doesn’t even own. The only brand-new project in the mix, Lordship’s But even a year ago, Mayor Marek Ječmének Galerie Stromovka, never had a chance explained that while the asking price is because it’s simply not big enough. CZK 650m (€26.9m), the reconstruction PPF’s Argentinská hvězda was presented last of the protected historical monument year as the only option for the municipality, “Galerie Stromovka failed to offer enough would cost Prague 7 nearly CZK 1bn. Too until PPF stepped aside, explaining it would office space,” says city spokesman Martin much, in other words, though Vokuš says wait until after local elections last autumn. Vokuš. “And with Parkhotel we would have to the final price is still in negotiations. Orco The project consists of two buildings, of tear the building down and build a new one, spokeswoman Petra Zdeňková says the cost which the municipality would use one. The which would be a rather prolonged process.” of reconstruction was included in the Orco‘s project’s been in planning for over a decade. offer. With five years still to go on its current lease, Prague 7 isn’t having an easy time of it choosing its new headquarters and ruled out Lordship’s bid st nd because it lacked the necessary office space Prague 7 would appear to have time on its side, but it’s demanding the new space be September 21 - 22 2011 ready by 2013. This may be in order to build some leeway into its move schedule, or it Prague, Czech Republic could be an attempt to take advantage of This year’s CEDEM CEE 2011 will bring together leading investors, developers, bankers and consultancies for a series of the current landlord’s market and cheap panels and debates in order to look for signs of improvement and to identify which opportunities and risks the crisis construction prices. is creating.

The financial consultancy Cautor Consulting For more information please contact: is advising the district, though its real estate Robert Fletcher | CEO | +48 506 074 042 | [email protected] www.cedem.cz expertise isn’t immediately apparent. Zuzana Vodrážková | Sales Director CZ & SK | +420 603 264 921 | [email protected] Transcripts of Prague 7 council meetings quote Mayor Ječmenek as saying the group Associate Partners Gala Party Partner Organizer was making its decisions primarily by feel. No General Partner Partners property consultants will be hired, and the final decision will come down to price, says spokesman Vokuš. September 21st - 22nd 2011 Prague, Czech Republic This year’s CEDEM CEE 2011 will bring together leading investors, developers, bankers and consultancies for a series of panels and debates in order to look for signs of improvement and to identify which opportunities and risks the crisis is creating.

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] www.cedem.cz

General Partner Partners Associate Partners Gala Party Partner Organizer 30 Czech Republic Urban Planning

The consortium re-developing Massive brownfield 45,000 sqm of land in the center to transform makes its opening move Prague‘s center Nina Fibigerová

Jean Nouvel’s vision for the re-development of the Masaryk train station Central Prague’s biggest development leaves large areas of green areas between buildings project kicked off with a bit of fantasy at the end of May. In a move that was half marketing and half architectural brainstorming, the investor behind the Masaryk Train Station re-development asked seven prominent design studios to let their imaginations run wild and come up with potential master plans for a 4.5 ha site with hundreds of thousands of new real estate that could easily more than a decade to fill.

A tender held years ago was won by the Masaryk Station Investment consortium, made up of Sudop, Czech Railways, its development arm, Morávka Centrum and ING Real Estate. ING dropped out of the consortium, however, in 2010, and with local elections coming up, the consortium decided to wait for the new leadership to be established. and Martin Krupauer, AP Atelier, atelier – FNA, The re-development of the area is still in its Cigler Marani Architects and CMC Architects infancy, as a complex change to the master The architectural workshop resulted in were then presented at the exhibition called plan will be required before anything suggestions that ranged from the boringly The Future of the Masaryk station area, substantial can be built, says Kadeřábek. But suburban to the realms of science fiction. organized by Masaryk Station Development reconstruction of the historical buildings The studios were instructed not to worry (MSD) at the Faculty of Architecture in Prague of the railway station can proceed. MSD about feasibility, but rather to dream up Dejvice. “This is not a competition, we will not signed a lease contract with Czech potential uses for the land. choose a winner. Our aim is to present these Railways for 30 years, and will use the rent studies and open a wide public discussion. revenues to cover the CZK 300m (€12.4m) Designs of A+R System, ADNS Architects, The location deserves it,” said Tomáš investment. Jean Nouvel and Atelier 8000 Jiří Střítecký Kadeřádek, the project manager.

Real-Treuhand grabbed the opportunity and bought 5. It will offer 800 sqm of office space Reality the project with its construction permit and 50 parking spots, topped by 35 Real-Treuhand plans to a year ago,” says Petr Kozojed, the flats ranging from one-room units start work over the sum- director of Real Treuhand. Designed to high-end maisonettes. A typical mer on a mixed-use scheme called .142. by the architects from pha studio, the 80 sqm two-room flat goes for CZK The project has been been held up new building will replace an old villa 5.64m and Kozojed claims that res- by the crisis for a couple of years. “We overlooking Radlická Street in Prague ervations are already being made. This issue is printed on 100% recycled paper

Development Czech Republic 31

Testing the development waters Phase II of Classic with a spec development in 7 vs. Holešovice Prague’s toughest office market vacancy Nina Fibigerová

AFI Europe has begun construction on the Klein also claims that current tenants are market will be ready for it. second phase of Classic 7 Business Park in looking to extend into the remaining space Holešovice, Prague 7, joining the rather thin in the existing three buildings, which offer The amenities in the complex include a ranks of spec office developers. No pre-lease 18,000 sqm. He admits that the Holešovice conference hall, restaurant, café, dry cleaners has been signed for the next 11,000 sqm of neighborhood in Prague 7 tops Prague’s and tobacco shop. The new building will office space, which offers 225 parking spots office locations in terms of vacancy with 23 close the fourth side of the rectangular and additional shops and services. Designed percent but he’s still confident that by the complex with a green courtyard and again by CMC Architects, which created time the new building is completed, the fountain in the middle. Classic 7’s design concept, the new building AFI might build speculatively despite the above-average vacancy in Holešovice is scheduled for completion in the third quarter of 2012. Imos Brno has been chosen as the general contractor.

CEO Doron Klein says he anticipates that financing will be forthcoming as banks are able to consider Phases I and II together, and the former is currently 80 percent occupied. He’s also confident that pre-leases are on the way. “We’re negotiating with two potential anchor tenants for approximately 35 percent of the space,” he says. “Even if they don’t happen, the good performance of phase one could persuade the existing lender, or we can refinance phase one and finance the second phase with another bank.”

Aventin has agreed terms with OBI to Obi signs up for pre-leased, the company has applied for anchor its Jihlava scheme Jihlava retail park construction permit, which it expects to The investor Aventin will obtain by the end of August. Meanwhile begin construction on a Aventin has struggled so far to fill the new retail park this September in Jihla- remaining units. It has considerable in- va. Its CZK 500m, 23,000 sqm first phase centive to do so, as the bank financing will offer 15 stores, anchored by a new it’s agreed to requires 80 percent of the OBI store. It’s signed up for 9,000 sqm of space to be under lease before releasing space in the retail park, which is located funds (along with a binding contract with at the main road to Pelhřimov. a builder). The project was ready to go, but the deal The first phase, including a parking lot for with OBI had to be concluded in order 500 cars plus a McDonald’s restaurant, for construction work to get underway. is scheduled to open before Christmas With the 40 percent of the space now 2012 32 Czech Republic Residential

A Dutch developer turns to the Dutch done with local market for vacation home Czech vacation project homes Nina Fibigerová

For its first two projects on Lipno Lake, the that persuaded the company to expand And it’s Czechs the developer will be targeting Dutch developer Sparcs sold most of the its activities in the Czech Republic. Sparcs for its latest scheme, 40 km away, in Nová units to compatriots back home. The financial built Marina Lipno, comprising 306 Pec, which the company turned to now that crisis has ended that business model, apartments between 2001 and 2005. It there’s no further land available for expansion however, as many of the original clients are followed this up with Lipno Lake Resort, at Lipno. Coolbergen says the company plans now selling units off to the local population, 92 apartments in five buildings, in 2008. to build 14 family houses in the first phase, to so the company will be focusing on Czech Of the 92 apartments in five buildings at test the market. The developer will negotiate clients for its latest scheme in Nová pec. Lipno Lake Resort, just seven are still on with its current lender, ČSOB, for a project offer, and four users plan to sell theirs. loan, but Coolbergen boasts the company Adrianus Coolbergen, the developer’s “Its Dutch people who want to sell,” says can tap into its own equity to build and sell sales representative, says it was the brisk Coolbergen, “and its Czechs who want to the houses one by one, if necessary. pace of sales in the previous two projects buy.” “In the Czech market the effect of the crisis Lipno vacation apartments target Czech end users was not so strong, we did not perceive substantial drops in the pace of sales,” says Coolbergen. He admits that their main customer pool is Prague. “People who live in České Budějovice, or Pilsen, will not buy anything exceeding CZK 2.5m (€102.8m). Our price has over the time moved from €150,000 to €170,000.”

With its EIA approved, Sparcs hopes to secure a construction permit for the project in Nová Pec by next year.

Avestus fills Jupiter tion in 2013. Neptune will add 17,000 sqm Explora Phase 1 is fully-leased Jupiter, the first phase of Ex- while Saturn will offer just 5,400 sqm. plora Business Centre, is 100 “Our focus is on pre-leases, and we hope percent full thanks to a mix of to announce some significant agreements recent extensions and new tenants. GE In- with high-profile tenants this summer,” says ternational expanded its lease in the build- Guy Speir, Leasing and Marketing Director ing by 615 sqm, while Knauf Installation has for Avestus Real Estate across the CEE re- added 200 sqm. A new lease was also signed gion. “The demand for quality office space with the US company Intermec, which has in a desirable location is huge in Prague, taken 208 sqm. This opens way for the de- and we believe the success of Jupiter, with veloper, Avestus Real Estate, to concentrate high profile tenants like Citibank, GE Inter- on getting works on the second phase of national, DHL, Tech Data, Honda etc, will be the project underway. Two buildings – Nep- replicated in Phase 2 of Explora.” tun and Saturn, are scheduled for comple- This issue is printed on 100% recycled paper

News Czech Republic 33

ECE‘s bid to add parking to Vaňkovka was beaten in a South Town in Brno tender by a housing project finally lifts off Nina Fibigerová

The City of Brno-owned company spots on three underground floors and site. The city is adamant the investor Jižní město (South Town) has signed will landscape the 2,000 sqm in the complete Palác Trnitá by 2014. The a contract with a private investor that building’s courtyard. investor has also promised to build a will kick off re-development of this 134 road connecting Trnitá to Boulevard, ha brownfield in the center of the city. Europark will begin the planning process a central thoroughfare that will run Europark – FP plans to build Palác Trnitá, this year, together with clearance of the through the entire South Center zone. a mixed-use scheme near the Vaňkovka Palác Trnitá will add new apartments to the Brno residential market by 2014 shopping mall. Retail units will go on the bottom levels, with 160 apartments to be built above them.

The Slovak-owned Europark FP won a tender held by Jižní město for the re-development of the 6,900 sqm plot. It beat out ECE, which had rather less imaginatively proposed to build more parking for its Vaňkovka shopping center, despite the city’s preference for new housing.

With 11,500 sqm of space in Palác Trnitá to be devoted to flats, residential will dominate the project, with the retail component filling just 8,000 sqm. The developer will construct 400 parking

No quick rebound for number of construction permits rose, albeit Markéta Šichtařová of Next Finance predicts the construction by just 0.9 percent (9,210 in all). However, that the bottom has at least been reached for sector the optimism was obliterated by the value of the construction sector. Analysts don’t foresee The Czech construction sector those permits, which was CZK 24.3bn (€1bn) a return to pre-crisis levels earlier than 2013. continues to experience freefall, as figures for lower than a year ago (a 35 percent reduc- Construction still slow the month of April indicate that output fell 6 tion). This was chalked up to major reduc- percent, year-on-year. Building construction tions in investments into transport infrastruc- only dropped 2.3 percent, but civil engineer- ture and the power industry. ing plummeted 13.7 percent. Home comple- “The construction sector will have to face tions in April, however, were a complete fias- another year of limited demand from both co, as they came in 27.7 percent lower (2,091 private and public sectors,” ČSOB analyst fewer), while the 2,266 starts represented a Petr Dufek told the Czech News Agency, result 18.2 percent off of April 2010’s pace. predicting that economic revival in construc- If there was a bright spot, it was that the tion would lag behind the other sectors. But 34 Czech Republic Residential

Jiří Lobkowicz is formulating a Aristocratic project requiring over €300m in development investments planned Nina Fibigerová

Jiří Lobkowicz plans to turn 263 ha of family, plans to build on the land he owns The project would start with the land surrounding Mělník castle at the there. Lobkowicz is organizing road show reconstruction of Hořín manor into a confluence of the Vltava and Labe rivers events in Berlin, Frankfurt and London this five-star hotel, the construction of a into a sprawling residential area called autumn in order to raise capital. nine-hole golf course and a first phase Royal Mělník Park. The project features 859 of apartment houses. The units will sell family houses and villas scattered in the He hopes a cornerstone ceremony at CZK 65,000 per sqm, and Lobkowicz greenery, two golf courses, two hotels and could take place next spring, though plans to re-invest the revenues to a dock. It also calls for the construction of Mělník‘s construction and conservationist finance the project’s second phase. The various other outdoor sport facilities, such departments told the Czech News Agency prices for the houses will vary from CZK as a swimming pool and a hippodrome. Lobkowicz has yet to apply for permits. 60m, 800 sqm villas on 10,000 sqm of Nor has he discussed his plan to refurbish land, to 75 sqm flats and senior living. The total investment should amount to a rococo manor house into a hotel. The intention is to make it attractive for CZK 7.5 bn (€310.8m), even if Lobkowicz, a Completion of the project is tentatively a variety of target groups. descendant of a famous Czech aristocratic scheduled for 2023.

Sales this year continue to slump, and Trigema expects stabilization at best for the rest of 2011

Trigema Trigema has begun sales of a 3-villa scheme called Rezidence 3D. To be located in Modřany, Prague 4, the project offers 27 flats of up to four bedrooms at prices ranging from CZK 3.1 to 8.6m (€128,604 - €356,775), roughly CZK 60,000 per sqm. No units have been sold, but the developer claims it will start construction in autumn 2011. All three buildings are scheduled for completion in autumn 2012. Trigema’s scheme in Modřany

Source: Trigema This issue is printed on 100% recycled paper

Residential Czech Republic 35

Schemes coming out of the Housing starts ground today could have the roundup edge over yesterday‘s projects

X-LOFT Ne oRiviera Cer nt al Group Realitní společnost České spořitelny has Under a deal finalized in May, Neocity Group Central Group signed a contract in May to launched its sales campaign for apartments and Skanska will work together on the build two more apartment buildings in Nové in X-Loft, an energy efficient project development and construction of NeoRiviera, Letňany in Prague 9. The latest phase will add developed by Design Development Libeň, a 2,000-unit residential project in Prague 4 260 new units to the location, 100 of which Prague 8. The first phase of the project Modřany. Neocity Group will develop and have been pre-sold, allowing construction to is already nearing completion, with an build 140,000 sqm of the scheme, with start in June. Central Group chose Skanska as occupancy permit to be issued in August. Skanska responsible for the remaining 20,000 the general contractor in a tender competed Of the 49 units in the first phase only seven sqm. The Swedes will go first, beginning for by nine companies. The project is remain unsold, says the sales director of construction on the brownfield site with 250 scheduled for completion in December 2012. the broker Miloš Červenka. “The focus on apartments in four buildings. The CZK 500m project offers prices as low as ecological and economical aspects is a strong Skanska joins Neocity in Modřany CZK 28,500 per sqm, with four-room flats as sales driver nowadays. Original, reasonably large as they get. The developer will not use priced and energy efficient projects are bank financing for the scheme. attractive for the buyers,” he adds. Of the 75 units planned for the second phase, one third AFI have already been sold. This enabled the start AFI has begun construction on the 92-unit of construction in June. The second phase second phase of Tulipa Rokytka, a residential is scheduled for completion in August next project in Prague Vysočany. The developer year. To boost sales further, the developer claims to have signed 39 reservation offers to pay operational costs in the flat contracts on the units that offer a maximum for two years. The project is a mix of lofts, Fip ne of four rooms, with a price range of CZK two-level units and classic flats ranging from Finep is working on the fifth phase of its 1.9m – CZK 6.9m (€78,840 - €286,314). one to five rooms. It’s the first residential Nová Harfa residential scheme in Vysočany, Construction is scheduled for completion project to achieve silver certificate “SBToolCZ”, Prague 9. Already, 1,500 apartments have in 2013. Just one of the 85 units in the first granted by the Technický a zkušební ústav been sold in previous phases, and another phase remains unsold, according to AFI CEO stavební Praha in cooperation with the Czech 130 will be added during this latest round Doron Klein. The general contractor of the Technical University ČVUT. of construction (of which 27 remain to be project designed by Loxia is Casta, based in sold). A total of 101 are due for completion Southern Bohemia. X-loft bets on economy this autumn, with prices in this mass-market scheme peaking at CZK 45,000. Tulipa Rokytka

Finep’s latest phase has just 130 units 36 Czech Republic Development

Lordship delayed Karlovy Vary still reluctant to over spa-town give a CZK 8bn project a go politics Nina Fibigerová

Central Park Karlovy Vary is believed Lordship is crouched at the starting block “Transport infrastructure will be built to be an CZK 8bn investment of Central Park Karlovy Vary, an CZK 8bn in the first phase, together with one of (€323m) investment, but it’s still waiting the hotels, a congress center, leisure and for the city to fire the starting gun. Political shopping, to keep it in the black,” says wrangling and intrigue following local Lordship’s director Martin Pilka. elections last fall has meant that the city’s new leadership hasn’t given its seal of The city wields power over the project approval yet on the project. not just through its role in approving urban planning matters, but also from Lordship plans to re-develop a 15 ha the fact that it owns some 18 percent of section of the city’s sprawling railway the land in the area. Lordship has been station, reducing the number of ground- buying the rest from České dráhy step by level tracks from 17 to just 2, while step since 2006, but the city has yet to creating a transport hub underground decide if it will create a joint venture with that integrates trams, trains and buses. the developer or sell its own land as well. To complicate matters, the city’s ruling Political infighting in Karlovy Vary is blocking riverside development coalition collapsed in June, causing further delays in the approval process. Pilka insists that the city supports the idea of re-developing the brownfield site, but admits the company has had to make adjustments because of transportation infrastructure issues.

Architects from SIAL and Aslop created the design, which includes a new park, a square and a 2.5 km long colonnade along the river Ohře. An aqua-park and leisure center, a shopping mall with offices and services, hotels and apartment buildings are also included in the ambitious plan. In all, the project should offer 136,250 sqm of hotel and conference space, 36,000 sqm of retail and 53,000 sqm of residential space.

Lordship will start addressing potential investors and lenders once it secures the planning permit. The developer hopes to be able to start construction in two to three years. CEO +48 506 074 042 | [email protected]

Sales Director Czech Republic & Slovakia + 420 224 225 613 | [email protected]

Partners

Organizer 38 Hungary Residental

Senior associate Andras Dallos Dallos: We haven‘t (Colliers) warns there‘s more hit bottom yet pain in store for residential

Is the residential market at the bottom yet? I heard someone of the developers is that most of them are waiting, either for the say that at least a year ago about Hungary. market to get better, for incentives to become available, or for the I don’t really think we’ve hit rock bottom, and if you look at the government to do something. Currently if you would try to apply trends, then we’re still heading downwards and we will be until the for a mortgage you’d be looking at interest rates of 8 - 10 percent. end of 2011. Construction volume is down, sales are down, prices are falling in some segments and stagnating in the others. So I be- That’s prohibitively high... lieve there’s still room for decline on the Hungarian residential mar- I fully understand why people aren’t taking out mortgages at such ket. Overall the situation isn’t dire, but I’m sure it will take 3 years for rates. In the USA, 8 - 10 percent interest rates were associated with real growth to return. sub-prime loans. In addition, the banks have become exception- ally prudent. They’re asking for a lot of information, and you have Are there any signs of a growing pipeline yet? New constructi- to have relatively high income in order to get good LTV. Previously on? it was common to have loans that were worth 80 to 90 percent of The number of construction permits in Hungary declined from the value of your flat. That’s impossible now. You’re looking at equity 28,000 in 2009 to 17,000 in 2010 and we expect it to be even lower of at least 25 percent, which means you have to have savings. So this year. In Budapest, for example I was astonished by the construc- the total transaction volume has basically halved over the past three tion permit figures. In Q1 2010 there were 2,271 permits issued and years. If I remember correctly, there were about 190,000 homes sold in Q1 2011 there were only 550. Even if you include seasonality, in in 2007 and in 2010 it was only 82,000 units sold in the whole that’s a marked decline. From what we’ve experienced with most country.

What will it take to turn things around? Rising GDP? More employment? Easier financing conditions? Less unsold stock? The turnaround is dependent on a lot of factors. Of course it’s also dependent on how the current reforms play out. A lot of people have benefited from the new tax laws and perhaps this will encourage them to purchase second homes. If I had a lot of disposable cash I might buy an apartment now because they’re ridiculously cheap. The personal income tax has been reduced, and for higher- earning people this can amount to a rather hefty increase in disposable income. But real growth overall would have to come from middle class or average priced apartments. And it appears they haven’t really benefited much from the reforms.

What’s the availability of financing like for developers? Banks have become very squeamish. They’re not looking to finance residential projects, only the best ones. If you have a residential project in a very well-located area then I think you’d be able to get financing and you’d be able to get pre-sales on them. But we’re talking about a very low volume. In terms of newly constructed projects, only 4,000 were sold last year vs. 14,000 in 2008. That’s abysmal. And there’s virtually no major multi-apartment project in the pipeline right now. Maybe ten of them with 100 or more units. This issue is printed on 100% recycled paper

Residential hungary 39

Prices for new flas are just above 2007 Developers must be re-thinking But eventually, developers get despe- levels, but older units have crashed their projects. Is there a greater level rate enough to sell at steep discounts. 2nd hand New of pragmatism now, perhaps concen- They won’t sell. We should really distin- dwellings dwellings trating more on smaller flats? guish between two types of products. A lot of apartments in higher quality There’s product that’s marketable, but may- 2007. I. 100 100 developments remain unsold because be it’s too big or slightly over-priced. Then 2007. II. 100.6 102.8 they’re simply too big. If you have a sqm you have flats that simply aren’t market- 2007. III. 93.7 106 price of HUF 400,000 per/sqm it’s not so able, sometimes because they’re located in 2007. IV. 88.1 105.6 high, but if it’s for a 160 sqm flat, then an area that makes them impossible to sell, you’re looking at a very high sales price or they’re over-priced by 20 to 30 percent. 2008. I. 85.4 105.7 that eliminates perhaps 80 percent of 2008. II. 86.9 108.2 potential buyers. Most developers will be Where won’t they sell? 2008. III. 83.6 109.6 concentrating on 50 sqm to 60 sqm flats, If you have an apartment building located 2008. IV. 83 108.1 so 1-2 bedroom units. Those are the size next to railroad tracks with 50 trains going you’ll be able to sell. by your home ten meters away, you won’t 2009. I. 80.2 108.1 be able to sell that flat. Surprisingly, there 2009. II. 76.9 109.3 How many unsold apartments are have been a number of developments like 2009. III. 75.8 104.2 there at the moment? that. There’s such an oversupply of prod- 2009. IV. 69.5 102.6 As far as I know, there are around 3,200 uct that buyers have become very picky. newly built, unsold apartments. That’s 2010. I 85 105.6 actually very good because it means that You hear people asking for lots of new 2010. II. 75.7 102.7 the pipeline of newly constructed homes subsidies to jump-start the residen- could be exhausted within two years and tial market, but didn‘t subsidies drive 100 = Price in Q1 2007 that could drive up prices up fairly heav- up prices to unsustainable levels in the Source : Hungarian Statistics Office ily. first place? They inflated prices quite heavily be- They’re going to start competing now cause a lot of people who didn’t have with a new generation of projects with steady income were able to buy flats. The 30 percent. There wasn’t enough good better layouts, better prices led by de- subsidies allowed people to live beyond quality product, so people were willing velopers who have learned their les- their means which didn’t help the resi- to pay a premium for the few that were sons. Can they compete? Won’t develo- dential market. of good quality and were in a good loca- pers cut prices? Imagine that in 2001, when subsidized tion. Then the next year it increased by 40 Only minimally. They simply won’t sell at loans and other subsidies became avail- percent. To this day, I can’t believe such a loss of 10 percent. able, year-on-year sales prices increased an increase was possible.

The number of construction permits in May 2011 for residential projects was less than half the number in May 2007

Residential Of which those Non-residential Holiday houses buildings with one dwelling buildings 2007 1 813 325 339 1 510 202 708 54 5 488 838 309 477 2008 1 635 345 412 1 244 168 665 73 13 041 732 334 182 2009 1 550 270 195 1290 172 544 41 4 298 418 222 79 2010 667 155 641 535 76 749 44 5 437 430 244 780 2011 671 123 882 557 84 434 36 3 593 518 207 176

Source : Hungarian Statistics Office 40 hungary News

An attractive location has Duna Bellview helped the office building fill up nearly half let after Nestlé‘s exit Robert McLean

Duna Bellview Office building, known until recently as the Nestle building, is now 42 percent occupied following decisions from three companies to move in. Along with the landlord, and a construction company called Buildersite (which took 365 sqm), a third tenant, Kyäni Hungary Ltd has agreed to take nearly 600 sqm on two floors in the 2,300 sqm building, according to Marian Tóth, an office leasing consultant at Colliers International. The building offers a prominent location at Ybl Miklós square, under the Buda castle in Budapest’s central District I. In a tender held last summer, Newland Estates acquired the ex-headquarters of Nestle, which left the building in May 2010 when it moved into Millennium Office Towers. Newland Estates led a group of investors to purchase the building that Nestle had refurbished ten years previously.

With the new terminal in place, Budapest airport already held a 37.3 percent share in the Hungary’s stake has been reduced stake sold airport operator. Hungary sold a 25 percent According to recent data released, the air- stake in the Budapest airport’s 9,000 employees produced net rev- port to the German construction giant enues of HUF 341bn in 2009. Over the first Hochtiet. The country’s National Asset five months of the year, 3.2 million pas- Management body exercised a put op- sengers have passed through the airport, tion to sell the stake in the airport, whose a 13.1 percent increase compared to the value is estimated to be HUF 36.6bn. It same period in 2010. Overall in 2010, 8.19 expected to be paid within 30 days of million passengers were transported in the announcement on June 15. Hochtief 2010, representing growth of 1.2 percent. 20th October 2011 Bank Center

FORUM PROGRAM

20th October 2011 Bank Center Conference Rooms | Szabadsag ter 7 H-1054 Budapest | Hungary

09:00 – 09:30 Breakfast

09:30 – 10:15 Hungary’s place in the investment world still shaky In their strategic thinking, some investors are currently lumping Hungary in with Eastern Europe. Some of those who don’t say this out loud admit openly that they’ll buy in Prague and Warsaw before they make a move in Budapest. Why is this so? And is this justified, or are they missing opportunities and discounts that are unlikely to be repeated?

10:15 – 10:45 Debate – Office: Not as bad as it looks? Or worse? Budapest’s vacancy rate actually fell at the end of 2010, but that only brought it back to roughly the same level it had began the year. With no rapid economic turnaround forecast, is it feasible to expect improvement? What is the best strategy for banks and developers with exposure to this sector?

10:45 – 11:15 Debate – Euro: Yes or No? and The new vision for Budapest Forget for a moment whether Europe will be in any mood to accept Hungary into the Eurozone, whether the country could actually qualify in the near-term. Would developers and investors see it as an improvement over the chronically weak forint in view of the current European debt crisis? How about the local banks? Should the government’s strategy be to push for accession as rapidly as possible? The elections are over, the old ties have been broken, paving the way for a new vision about where the city is going. So, where is it going? What will be the most important new directions of the current administration? What do we know about the priorities of the new city administration, and how can private developers best prepare for the next few years?

11:15 – 11:45 Coffee break

11:45 – 12:30 Retail: The end of the mall development era Consumer spending has finally bottomed out in Hungary, so what comes next? Older, established shopping malls have been getting make-overs as owners invest in order to keep them competitive, and it turns out they can still be competitive. Is the era of new malls over for now? How hungry are retailers for widespread expansion, if at all? Will the lack of new malls prevent new brands from coming in?

12:30 – 13:30 Lunch

Partner Media Partner Organizer For more information please contact: Robert Fletcher | CEO | +48 506 074 042 | [email protected] Dalma Mózes | Sales & Marketing Manager | +36 1 373 0429 | [email protected] 42 Poland Office

SwedeCenter has kicked off an Business Garden ambitiously green, Poland-wide is speculatively program of office development sustainable Wojciech Kość

Hardly a month goes by in Poland without which will have two office buildings (14,600 the project has reserved for green areas, at a developer announcing that its next sqm and 17,500 sqm GLA) along with a 200- least in the visualizations. Korteweg suggests office project will be certified with one of room business hotel and conference center. that as the industry’s environmental the green credentials systems. Should the The buildings are to go online towards the standards tighten, other projects will have trend continue, 2011 could be the year in end of 2012. to adapt in similar ways in order to be which the development pendulum swung competitive. permanently to the green side. By 2014, Business Garden should be finished, featuring 90,000 sqm GLA in seven buildings, With SwedeCenter’s not planning to flip Arguably the most significant example of making it one of the biggest office projects the project upon completion, Korteweg this low energy, high efficiency trend is currently underway in Warsaw. adds, the tenants will be guaranteed that SwedeCenter’s Business Garden in Warsaw. the complex will remain a consistent According to SwedeCenter’s commercial whole. “When developments get sold, The project, whose cornerstone was laid in director Eelko Korteweg, however, its size each building to a different investor, there’s June, is being carried out in order to receive a is actually understated compared to the no common interest in the entire project LEED certificate. amount of land it sits on. “I know that 90,000 anymore,” he says. sqm is already a big project, but on that SwedeCenter, part of Inter Ikea Group, will plot we could be developing even more,” he SwedeCenter is preparing two other Business deliver Business Garden in phases, the first of claims. There are large chunks of space that Garden projects in Poznań and Wrocław. Both

The developer of Business Garden intends to leverage the project’s large scale to make will be LEED-certified and their size attest sustainability profitable to the reviving office market in Poland: the Poznań development will have 80,000 sqm of space for rent, while Wrocław’s could see as much as 120,000 sqm of new build.

Other ongoing office projects in Warsaw aiming to receive an environmental certificate include UBM’s Poleczki Business Park, Capital Park’s Eurocentrum, and Skanska’s Green Corner.

Natio nal Stadium construction in the 55,000-seat facility’s stairs. because of mistakes by the contractors, delayed until In mid-June, NCS agreed new terms with the a fee of PLN 250m (€63.50m) will be im- December consortium of companies building this future posed. According to local press, however, The opening of Poland’s flag- shrine to football. But it came at a price: Al- the consortium has already been spared ship sporting arena for the upcoming Euro pine-Bau, once the leader of the consortium, paying penalties for the delay in putting 2012 football tournament is now officially has been demoted to a partner in the project, together the stadium’s steel frame and delayed until November 29. The stadium’s while Hydrobudowa is now in charge of the for failing to deliver the project on time operator, Narodowe Centrum Sportu (NCS), group, which also includes PBG. on June 30. The Euro 2012’s opening made the announcement in June after its in- The NCS warned that if new terms are game on the National Stadium is sched- spection in May revealed a serious flaw in the not met and the contract is terminated uled for June 8, 2012. This issue is printed on 100% recycled paper

News Poland 43

sheraton cost cuts that amount to several millions in savings,” Kalisz, a town of 100,000 people located Warsaw-listed develop- he says. “Our shareholders aren’t interested in the Poznań region. Galeria Amber will ment company Europejski in overpaying on anything. [They want] to be a 4-storey shopping and entertainment Fundusz Hipoteczny (EFH) reach a set goal while spending as little as center developed on a central location in has had a Sheraton hotel in the works possible,” he says. Kalisz, next to the town’s main bus and train in Poland’s Mazury lake district resort of According to Podobas, EFH is now able to stations, at the junction of Górnośląska and Mikołajki since 2008. Oblivious to the ap- spend less on a whole series of services, Trasa Bursztynowa streets. proaching crisis, the project’s oversized including fundamental ones of general Its lettable area amounts to 33,500 sqm. Ga- budget stood at PLN 300m (€76m) just be- contracting and subcontracting. However, leria Amber will feature 140 outlets, includ- fore its financing evaporated. Now, having the drive to save money seems much more ing cafes and restaurants. A seven-screen revised the project’s basic parameters, EFH powerful today than just accommodating cinema is also planned, to be operated by has taken the hotel off the shelf, claiming it lower costs of other elements down the Helios. The project has already seen some could get the project going with a budget development chain. Podobas says that the leasing activity, with a trio of two-level of just PLN 200m (€50.5m). project’s design was stripped of a range leases: H&M is taking up 1,600 sqm, C&A The story of Sheraton’s budget is a good il- of non-essentials, like non-standard sized will cover 1,700 sqm and New Yorker’s new lustration of how far the market has moved doors, and paddling pools in the hotel’s store is just over 1,000 sqm. in just a few years. The new budget might spa section. It will be a debut on the local market for be strikingly lower, but Marcin Podobas, these three brands. Echo says it’s currently EFH’s vice president, says that the original Echo permitted for getting close to finalizing contracts with budget was a typical child of the boom. “It Galeria Amber other clothing brands, an electronics shop was a time of high costs, high prices, and Echo Investment has ac- and a hypermarket. Bose International high margins. Today’s situation is different. quired a building permit Planning and Architecture architectural We can optimize several cost categories for the construction of Galeria Amber in studio created the architectural concept.

real estate advertising agency 44 Poland Industrial

The developer has survived its Goodman makes first plunge into the icy waters of good in spec speculative development challenge Marcin Śmietana

Bucking the current penchant for caution, other 3,500 sqm leases were in place by in the works. industrial developer Goodman completed February with Eurodruk (printing) and the first 15,500 sqm of warehouse and Farutex (food distribution), who took a Goodman has been involved in the Polish office space on a 31.5 ha plot it eventually total of 1,000 sqm of office space as well. market since 2005, and currently manages plans to fill with 150,000 sqm of leasable Renata Osiecka, an analyst at Axi Immo, a portfolio that’s grown to 130,000 sqm. space. Construction began just outside says increased office space may be crucial The developer now claims it’s ready to Kraków with just 25 percent of the in convincing companies to pay the higher ramp up production with hundreds of building leased (to Scot). By the time it was effective rents (around €3.5 per sqm/ millions of Euro in new investments. completed, 75 percent of the building was month) currently charged around Kraków. spoken for before completion. In Silesia, the figure is closer to €2.5. Vanbiervliet says Goodman could build 1m sqm on its current land holdings “We hope to be able to announce the Goodman also secured a 75 percent lease alone, including the Pomerianian Logistics name of the last tenant for the remaining (around 15,000 sqm) with Vale for a 21,658 Centre, a 500,000 sqm scheme that would 25 percent of the building in June, as it will sqm building now under construction service the Deepwater Container Terminal officially open for operations in July,” says next to the existing one. The company in Gdańsk. The center is thought to Zbigniew Kmiecik, Goodman’s regional produces lighting components for represent an investment of €300m. development manager for southern automobiles. Poland. “The plans of the company throughout Valerie Vanbiervliet, director for Benelux Poland will have to rely strongly upon Goodman started construction in October and Central Eastern Europe, says that the its aggressive price offers, because last year on the back of a 3,500 sqm lease investment has been targeted at local or the company can’t count on new from Scot, a local company distributing locally present entities from the beginning. requirements, and will have to rely on re- supplies for printers and copiers. Two She hints that another 12,000 sqm deal is locations instead,” says Osiecka.

Office swap in market for office properties in Eastern Eu- Manfred Wiltschnigg (Immofinanz) Warsaw rope. This transaction represents a mile- Immofinanz Group said in stone in the implementation of our strat- mid-June that it was “tak- egy to take full responsibility for projects ing its next growth and optimization step and thereby optimize our investment in Warsaw” by acquiring the remaining 49 structure,” said Manfred Wiltschnigg, percent of the Warsaw class-A office prop- member of the Executive Board of the erty Equator and the adjoining office de- Immofinanz Group. The Equator, Nimbus velopment project Nimbus from its original and Cirrus development projects were project partner, Karimpol. In exchange, Kar- part of a joint venture with Karimpol cre- impol will purchase the 51 percent share it ated in 2006. The 19,100 sqm Equator Of- needs for complete control of the adjacent fice Building was completed in 2008 and Cirrus development project from Immofi- is fully-occupied. Planning for Nimbus is nanz Group. The parties are refusing to re- currently is now at an advanced stage, veal details about the deal. meaning that construction on the 20,000 “Warsaw is currently the most attractive sqm scheme could begin by 2012. This issue is printed on 100% recycled paper

News Poland 45

Financing secured for Warsaw,” said Eyal Litwin, Adgar’s vice presi- Elsewhere in Poland, the developer is doing Andersia Business dent. Adgar already owns Adgar Plaza, Adgar regeneration work on on the former Goetz Centre Business Centre and Adgar Business Centre Brewery in Krakow, where it will execute a Andersia Business Center II office buildings, along with Adgar Plaza 300 residential unit project along with 7,000 (ABC), a joint-venture development between Conference Centre - the company’s own de- sqm of offices and 5,000 sqm of retail space. the city of Poznań and Von der Heyden Group, velopment. All are situated in the Mokotów Balmoral Properties’ Polish portfolio also fea- secured financing for the €33m project from district of Warsaw. According to Colliers Inter- tures an office building in Warsaw and the Bank Zachodni WBK. The project’s now en- national, which brokered the deal, the site in Baltic Spa aparthotel in Świnoujście. tering the stage of above-ground works, question has “excellent long-term develop- which will take 14 months, with delivery set ment potential,” but Adgar has yet to disclose for September 2012. Upon completion, ABC its plans for it. New head of develo- will offer 11,200 sqm of GLA office space as pers’ association PZFD well as 2,300 sqm of GLA retail space on the The Polish Association of De- ground floor. Referring to the current shape velopers (PZFD) (the sector’s of development financing market, Sven von lobby organization primarily for residential der Heyden, chairman of the group, said that developers) has a new chairman. Zbigniew he was “relieved” to secure financing. “Get- Wojciech Okoński, CEO of Robyg has taken ting projects of this size financed is not easy the helm from Jarosław Szanajca, CEO of these days,” he said in the company’s press Dom Development. Okoński, it appears, isn’t release. According to the developer, ABS, going to redefine the organization’s goals, which is a part of larger scheme located on having pledged to continue with the strategy Poznań’s Anders Square is “a prime example of making the regulatory framework easier of a consistent development policy of the and simpler for development, while creat- city”. Von der Heyden Group is planning to Balmoral buys ing a more “positive image” for the sector. develop two more towers on the site with a central Warsaw plot Okoński has been with Robyg since 2007, total rentable area of 35,000 sqm. Balmoral Properties Poland but while his earlier positions in 2000’s in- Group has purchased a 3 cluded stints at Prokom Investments (where ha plot of land in central Warsaw, at Kłopot Okoński co-authored the concept of the now and Kłopot Bis streets, in the vicinity of the rapidly growing residential estate Miasteczko Adgar buys property capital city’s biggest mall Arkadia and the Wilanów in Warsaw), Elektrim, BRE Bank and in Warsaw Dworzec Gdański metro station. In line with the State Agency for Foreign Investment. He Tel Aviv-listed property in- the recently approved master plan for the was a deputy minister in the 1990s (econom- vestor and developer Adgar neighborhood, Balmoral plans to develop ic cooperation with foreign states) and a had Investments and Development (Adgar) a mixed-use complex, featuring about 600 stint as the minister of defense. purchased a property in the Wola district of residential units and 20,000 sqm of office

Warsaw, where BMW Inchcape’s showroom space. The investor is currently selecting an Wojciech Okoński, CEO of Robyg and service point are situated. The property architectural company to work on the design. comprises over 4,000 sqm of leasable area Construction work is scheduled to start in the on a plot of about 8,000 sqm. The financial second half of 2012. Balmoral Properties Po- details of the transaction were not disclosed. land Group has been active in the Polish mar- “The purchase of this property in Warsaw is in ket for three years. “It is our ambition to create line with our growth strategy, according to large scale residential and mixed-use projects which we will continue to invest in income- characterized by good design to provide producing assets. We intend to realize further high quality environments for people to live investments in Poland, and we are currently and work in central city areas,” pledges the looking for more land for development in company’s managing director Alun Jones. 46 Poland Industrial

The new kid on the block isn’t HB Reavis clinches wasting much time making its PKP deal mark on the Polish market Wojciech Kość

The Slovak developer is helping It didn’t take long for the Slovak rookies to management has left it in pitiful condition. transform a transport eyesore find their feet on Poland’s development Along with that refurbishment, HB Reavis will market. Having confirmed a solid, standard attempt to build a 7-building, 54,000 sqm office project in Mokotów, the developer GLA business center, plus 1,000 sqm of retail HB Reavis has moved on to clinching a far on the ground floors of the office buildings. grander scheme. Together with Polish State The project will be accessible from Aleje Railways (PKP), it will attempt to transform Jerozolimskie, one of Warsaw’s fast growing the eyesore that is the Warsaw West train office sub-markets. station into a modern transportation hub, in return for the opportunity to develop offices HB Reavis says that the €110m BREEAM and a retail center on the site. project will begin with an upgrade of the train station in 2014, while the last building The deal is typical of the ones PKP is signing of the office complex will go online in 2017. with developers around the country. The state-owned company has a number of The Slovak company began discussions kicking off on an office tower (Warsaw Spire centrally-located plots in virtually all of with PKP, when the railway giant broke off from Ghelamco). HB Reavis is also carrying Poland’s major cities. Developers refurbish a negotiations on Warsaw West with French out another office development project in new station building (or build it from scratch) developer Nexity. Both parties blamed the Warsaw, the 48,000 sqm GLA Konstruktorska but they get a free hand to develop on large other for the difficulties, with Nexity claiming Business Center. tracts of adjacent PKP-owned land. Such that PKP consistently failed to understand deals have been agreed in Poznań (with the realities of commercial property Stanislas Frnka, HB Reavis managing director TriGranit) and in Katowice (with Neinver). development in uncertain times. in Poland, says he’s focusing solely on In both cities, developers will execute large Warsaw. “We won a tender for a plot in Kielce, mixed-use schemes. HB Reavis has perhaps gotten its timing where we’re currently clearing some land right. Demand for office space is looking title issues, but we’re going to announce a Warsaw West is one of the capital’s three increasingly solid, to the point that for the project there soon. It will be a 40,000 sqm main train stations, but PKP’s shocking first time in years in Warsaw, construction is GLA shopping center,” Frnka says.

Mayland starts Nimfea will be located in Piła, a town of Nimfea gets another chance Nimfea 75,000 in western Poland, in the province Mayland is another retail of Poznań. Mayland will use bank financ- developer that’s de-freez- ing for the 25,000 sqm GLA project, but ing a project postponed due to the finan- declined to disclose details, including cial crisis. The company is re-starting its Nimfea’s overall cost. The project is now Nimfea retail project in Piła, which was scheduled to go online towards the end originally supposed to have opened to of 2013. The project in Piła is part of May- the public in 2010. Mayland is currently in land’s development plan to deliver seven the process of renewing the construction shopping centers across Poland, whose permit for the development, a procedure total GLA will be approximately 300,000 it hopes to conclude this year. sqm. This issue is printed on 100% recycled paper

Q&A Poland 47

Bartosz Puzdrowski (Polnord) Puzdrowski: Prices wonders if the residential could still fall market has really hit bottom

Why shouldn’t prices just keep falling, given the rising interest ra- office buildings, for example in Służewiec, where some older projects tes of the Polish central bank or the growing supply? are not cutting it anymore in terms of effectiveness. The other trend In Warsaw, there’s a strong risk that developers will compete on prices, could be leasing office space in złoty, targeting companies doing their which is a more likely scenario now with the influx of developers from financials in the Polish currency. It’s a market segment that’s barely ad- outside Warsaw starting their projects. There’s also one factor contribut- dressed by developers of office space of a corporate standard. ing to where the prices may go that hardly anyone speaks about: consumer behavior. If most media outlets are writing that prices about to Are rents in the Polish złoty a way to attract locally based tenants take a fall, then consumers will wait for the fall to materialize. What do only? developers do when customers are waiting, or unwilling to close deals? The target doesn’t even have to be local firms. It can be Tesco, for exam- They come down on price. There are a lot of techniques for doing that - ple, as it’s using its market strength at the moment to have its stores pay like offering free parking spaces - but they all boil down to lower prices. rent in złoty in order to avoid currency risk. So, the scenario of prices falling in Warsaw is very likely. That’s why Polnord has been diversifying its residential development Are you on the bandwagon of green certification for office activity in the sense that we are one of few big companies with projects buildings? Is it really give any real advantage for developers? scattered across many local markets. We hope that this will give us a Certification is an independent tool that can be useful to developers competitive advantage because branching out in the residential devel- trying to win tenants by, for example, guaranteeing them costs of of- opment sector isn’t easy. fice space for the entire lease period. Certification is also an incentive for developers to think long-term about their projects, not just in the Why do residential developers so seldom get involved outside the- perspective of building and selling them. In the future, I think, develop- ir home markets? ers will have developers answer tenants’ questions of long-term costs of Development companies going into a new market must learn all about office space as a standard practice. this market. You have to learn what the city is like, what its districts are like, what residents there need and and what they think about the at- tractiveness - or the lack of it - of some locations. Then you need to understand what your local competition is doing and what the property market’s like in terms of prices, transaction volume, and so on. Then you need to get to know the local administration because the biggest challenge now is getting a construction permit, not the construction itself. You need to learn how to cooperate with the administration because while we have the same laws all over Poland, their implementation does vary from city to city. Finally, there’s the human factor, which includes all aspects of hiring local people or relocating your own people to a new location. The result is that most developers would rather stick to their own backyard and capitalize on their experience there.

Where is office demand going to come from for developments that are getting underway right now? According to all the market reports, Warsaw office space take-up is growing. We aren’t experiencing that yet, because we’re not leasing our next office project before the fall. But I can see that there are two trends that new office projects may take advantage of: relocations from older 48 POLAND Residential

Banks are nervous, developers cautious and home buyers are Quick fix eludes unconvinced residential sector Wojciech Kość

With prices still sliding according to many are better screened by the banks -- and currency mortgages in the 2000’s. observers of Poland’s residential market, therefore less risky. “Pricing is just about right consumers should be having a field day now, unlike the unsustainable levels of 2006- According to Grzegorz Żochowski, partner picking up the homes of their dreams. 2008,” says Marvipol’s deputy CEO Sławomir and head of capital markets at the REAS Nightmarish financing conditions, however, Horbaczewski, quoting the PLN 5,990 consultancy, banks should take care to are throwing up serious obstacles and (€1,494) price per sqm that his company maintain the health of their mortgage slowing the pace of sales down considerably. seeks for one of its recent projects in Warsaw. portfolio, but they have little to worry about What this means for the future growth of the in the short-term. sector is for once a matter of debate amongst No one wants residential prices to continue residential developers, who have traditionally falling, but just about everyone is warning “Banks should worry instead about put forward a unified stance. In fact, the bulls that banks should remain vigilant. Last consumer loans instead, where bad loans have finally separated from the bears. year, for example, the Polish financial body make for 15-18 percent of the total,” he called the KNF issued a recommendation says. “Unpaid mortgages are maybe three Bartosz Puzdrowski, CEO of Polnord, is in (Recommendation T) which limited access to percent.” the latter camp, as he says residential prices loans and mortgages. That recommendation will be lucky just to keep up with inflation is now being implemented by the banks. He admits, however, that the financial (see p. 37). “Demand will definitely take a conditions for issuikng mortgages are hit,” he says. And the strategic conclusion he And there are other concerns, like rising worsening and the market can expect a draws from that is populist, as Polnord will be inflation, which has spurred the Monetary moderate fall in residential prices through focusing on developing cheaper, mid-market Policy Council to increase the WIBOR interest 2012. That, in turn, will prolong the time until flats in order to increase turnover. rates four times during 2011, driving up the demand will get a boost. “Customers will just cost of mortgages. To top it off, the Swiss wait until prices have fallen to acceptable His counterpart at the rival developer franc has been appreciating against the levels. This will take time,” says Żochowski. Marvipol, however, says that fewer złoty, much to the dismay of the hundreds “A sudden boost in demand will only come mortgages means that its customers of thousands of Poles who took out Swiss when prices take a steep fall - which may happen once developers see that it’s taking them too long to sell and they decide to be more aggressive on prices,” he adds.

For now, developers are doing the rational thing and limiting their output. “Developers are more cautious in taking decisions to start new projects,” he says.

According to Poland’s Main Statistics Office GUS, developers delivered 15,206 flats in Poland between January and May 2011, a For more information please contact: drop of 28.8 percent against the same period of 2011. As for new projects, 23,583 flats Robert Fletcher | CEO | +48 506 074 042 | [email protected] were begun this year, 13.3 percent less than Marta Niezgoda | Sales & Events Manager PL | +48 22 848 60 21 | [email protected] in 2010. Zuzana Vodrážková | Sales Director CZ & SK | + 420 224 225 613 | [email protected]

Czech Republic Poland and Slovakia

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It‘s not just the Chinese contractor that‘s losing face on A2: Made in the A2 fiasco China...not! Wojciech Kość

In June, Poland’s road agency, the demanding additional payment to GDDKiA’s came under criticism for GDDKiA, canceled its contract with the continue work, but the GDDKiA refused having to cope with problems it should Chinese contractor Covec to build two to budge. have seen when Covec was bidding sections of the A2 motorway linking for the contract. After all, Covec’s Warsaw and Łódź. Trouble first surfaced Covec’s demise was the surprising end to price was just half of the PLN 2.6bn when subcontractors working under what had been seen as the beginning of (€660m) estimate GDDKiA’s valuers had Covec went on strike, demanding to a new era for Poland’s construction sector. expected to pay. Even with the benefit be paid. Covec eventually admitted it Instead, questions are being raised about the of hindsight, however, the agency isn’t had run into cost overruns and began competence of the Polish state as an investor. taking on any portion of blame. “GDDKiA requires bidders to prove at least five Maybe the state should consider whether the lowest bid offered in a tender is also feasible years of experience in construction or reconstruction of motorways or expressways, to have enough competent people, and to show average turnover for the last three years of at least PLN 400m (€100m),” wrote GDDKiA in a statement. With those criteria met by all bidders, price was the deciding factor.

As a result of the fiasco, the road will not be ready (as promised) for European drivers flocking to the Euro 2012 football championships, a major embarrassment for the government. Covec had hoped to leverage the A2 contract into access to Europe’s wider construction market, but its failure suggests Chinese contractors aren’t up to the job yet.

B4B will add a new dimension to Half of B4B open for Group, the two new office buildings will of- TriGranit’s scheme in Krakow business fer close to 15,700 sqm of office space to TriGranit has delivered two lease. According to TriGranit, nearly all of buildings from its Bonarka- the space has been let to tenants that in- 4Business office complex in Kraków. The clude Alexander Mann Solutions or Fitness buildings form half of an office park that Center Pure. Jones Lang LaSalle did the complements the Hungarian developer’s leasing for the developers. Upon comple- earlier development on the location, Bon- tion (expected in 2013), Bonarka4Business arka City Center shopping mall. Developed will offer 32,000 GLA sqm of office space in in a joint-venture with the Slovak-based IPR four buildings. This issue is printed on 100% recycled paper

Deals Poland 51

C&A, Robyg and Retailers made up a big portion Grup Buma of the deals done in June

CNOS Garden added 1,758 sqm of mostly contracted by the automobile sector Hyundai Motor Poland has rented 1,000 sqm warehouse space to its current lease at company Faurecia to build its next BTS in Mokotów Nova, one of three ongoing Segro’s Tulipan Park Poznań. The company manufacturing facility. The facility will office projects Ghelamco’s building in now rents a total of 9,000 sqm, with its take up 17,600 sqm. Work is set to start Warsaw. Hyundai will move into its new extension bringing the the project to full at the end of June on the new plant, and premises in September, joining Cargill and occupancy. will be the tenant’s second facility at the the project’s developer as tenants. Kostrzyn-Słubice Special Economic Zone Clothing retailer C&A leased 1,455 sqm near Gorzów Wielkopolski. Warsaw-listed residential specialist Gant in Futura Park Kraków, a 22,000 GLA sqm Development secured a PLN 57.5m outlet development from Neinver, due to Pure Health & Fitness leased 1,270 sqm in (€14.34m) loan from Bank Millennium for its come online in October. Millennium Hall, a 56,600 sqm GLA retail Wrocław project Odra Tower. The 18-storey, development in Rzeszów by Develop 243-flat project is scheduled to deliver in Ernst & Young extended its lease of 11,000 Investment. The mall’s due to open in August 2012. sqm in Rondo 1, a prime office tower in October 2011. Warsaw owned by a fund managed by Kraków-based developer Grupa Buma MGPA. The company is now set to remain Clothing retailer Top Secret and Friends confirmed that two of its ongoing office in the building until 2021. leased 400 sqm in Galeria Sfera, a project buildings, parts C and D, in the Quattro by Gemini Holdings in Bielsko Biała. Business Park in Kraków will receive BREEAM A press distributor leased 5,300 sqm at certification with a “very good” rating. In Panattoni Park Gdańsk and 5,400 sqm Residential developer Robyg launched the meantime, the developer also began at Panattoni Business Center Łódź in the construction of Albatross Towers, a construction of the third phase of a scheme a transaction brokered by Jones Lang three-phase residential project in Gdańsk. it calls Green Office - a 10,000 sqm GLA LaSalle. The new tenant will move into On completion in 2014, the project will building that should be ready by the third buildings now under construction by the feature three 17-storey buildings with 720 quarter of 2012. US developer. flats, priced between €1,500 and €2,100 per sqm. Polonia Property Fund has filled two of its Mark-7, a wholesaler of food products, Kraków office buildings - CBL I and CBL II - is the first tenant to sign up at MARR Shoe retailer CCC leased 279 sqm in after leasing more than 10,000 sqm of space Business Park in Cracow. It will occupy over Krokus, a mall in Kraków owned by GE in the projects to Capita Group, Bank BZ WBK, 1,700 sqm of warehouse, office and social Real Estate Poland. PwC, Polmed, and unnamed firms from the space. Cushman & Wakefield advised on IT and banking sector. All transactions were the transaction. Non-food outlet operator Pepco Poland brokered for the developer by Knight Frank. leased 323 sqm in Dekada Myślenice, Zara, Stradivarius, Bershka, and Pull & Bear a convenience mall in Myślenice, near DTZ brokered more than 2,000 sqm in will occupy a total of 3,350 sqm of space in Kraków. Dekada is a 3,400 sqm GLA leases for its client Libra Project’s 32,000 the expanded Wzgórze Shopping Centre development by Foren Group that should sqm scheme Galeria Leszno. They are C&A, in Gdynia, a Mayland Real Estate project. open in the second half of 2011. Another Stradivarius and Douglas. Upon expansion, the center‘s size will be Dekada mall, in Kraków, secured the 68,000 sqm GLA. delicatessen grocery store Alma, which Magna Car Top Systems Poland doubled the leased 1,310 sqm in the 3,500 sqm GLA space it leases in MLP Group’s MLP Tychy Panattoni Europe has been development, opening in the fall of 2012. production and warehouse facility to more 52 Romania Land

Big box retailers are the only reliable source of demand for Land prices in land, so for most plots, there’s free-fall no interest Amelia Turp-Balazs

Bogdan Cernescu Assuming the numbers about the “Transactions closed so far this year (Erste Group Immorent) land market are correct, then alarmist- prove that the land market has sounding headlines are justified. The surpassed the blockage we have price of centrally located land has been stuck in since the second half of dropped on average by 50 percent 2008,” says Sanziana Oprea, a Colliers since their peak before the crisis, while International consultant. “Having said secondary locations have suffered an that, we still can’t speak of a genuine even more acute correction of up to 70 market revival...and prices continue to percent. trend slightly downwards.”

Roughly speaking, after a continuous However, Oprea expects 2011 to be a decline in value for past three years, more active year than 2010 on the land land prices are back to levels last seen market, “given the advanced stage of in 2004-2005. The question today is negotiations that many transactions whether recent activity means the prices initiated in the first period of this year have at least hit the floor yet. are currently in.” Colliers is currently seeking a buyer for a 13.8 ha plot owned Ionut Petcu (The Advisers/Knight Frank) by Policolor-Orgachim in east Bucharest. It’s the remaining half of the former Policolor industrial zone, following the construction on the first half of the plot of a retail park now filled with retailers Except that most developers are like Real Hypermarket, OBI, Metro and uninterested in new land, concentrating Decathlon. instead on what to do with existing projects they’ve put on hold. Warehouse retailers, in fact, have been the land vendors’ only consistent hope However, Ingo Nissen, Sonae Sierra’s for more than a year now. “Since the managing director of development beginning of 2010, the most sought- for Romania, told CIJ that land prices after plots have been those fit for retail currently offer good investment projects, mainly for big boxes within the opportunities. “Besides the price, it’s city limits, both in Bucharest and other important to look for a dominant Romanian towns,” says Ionut Petcu, a location that permits a development senior consultant in the Advisers/Knight to fit the needs of the catchment area,” Frank’s land division. “Another category Nissen said. But his priority at the of land which has attracted investors’ moment is the development of Adora eyes was for plots of 5,000 sqm – 10,000 Mall in Craiova on land its bought in sqm, preferably located near a metro 2007. Work on this mall, an €111m station. The buyers are mostly the investment, started in June and the end users of these big boxes or office company has other projects planned in developers,” he said. Ploiesti in Ramnicu Valcea. This issue is printed on 100% recycled paper

Land Romania 53

Erste Group Immorent is actively looking He says the company still has land it Bistrita and Bucharest along with plots for land acquisition opportunities, but plans to build retail projects on in Galati, for residential schemes. it’s focusing on office developments Ingo Nissen (Sonae Sierra) thinks current land prices present a good opportunity, in Bucharest. The company has built a provided the location is right land bank of around 7.7 ha of land in Romania, of which 4.4 ha is in Bucharest. “However, the market is fairly difficult as land prices are still high in relation to the income generation potential of the properties and current investment yields,” says Bogdan Cernescu, managing director of Erste Group Immorent Romania. His company is working on the planning of the first phase (50,000 sqm GLA) of Smart Park, a mixed-use project in Bucharest.

GTC is another company with land it’s holding on to for further developments, “when the market demands it,” says Shimon Galon, general manager of GTC.

GTC teams up again it’s shopping around for a bank loan. Galon market, so we had more room to negotiate. for office JV says that Ana Tower would cost €60m - Now there are only a few reliable construc- More than a decade after €70m, but wouldn’t reveal how much the tors we can trust with a project as big as this. entering the Romanian mar- partners would put up in equity. “It all de- So I don’t think that there has been a drastic ket, the developer GTC is planning to add pends on negotiations with the bank, but change in prices.” a fourth office building to its local port- I don’t believe we will be able to reach Besides Ana Tower, GTC is scheduled to folio. To be called Ana Tower, the building an agreement in which we put up less deliver the 35,000 sqm Galleria Arad by takes its name from Ana Holding, a group than 30-35 per cent of the total cost.” The the end of September, which is 90 percent run by local businessman George Copos, project will not start without a bank loan, leased. Gallon is planning three other malls, which will be a 50-50 partner in the project. but Galon is confident of securing the fi- of which one will be in Bucharest. Shimon Galon, general manager of GTC nancing soon. “We already have more than GTC’s most recent office scheme, City Gate, Romania, says the project will deliver 20 one offer,” he told CIJ. was another JV scheme carried out with months from now, should everything run Ana Tower will be a 26-floor skyscraper of Bluehouse. Completed 18 months ago, smoothly. “We’ve been looking for some around 30,000 sqm GLA. The building will it’s now 97 percent leased, but its sale is land in the vicinity of City Gate and we be erected on a 3,500 sqm piece of land currently not in the cards. “This type of found a property, only 200 meters away, and will benefit from an extra 5,000 sqm lot decision is taken by the parent company which belongs to Ana Holding,” Galon said. for parking. in Poland, and for the time being it’s not At the moment, GTC is putting together Galon says it’s simplistic to assume that con- something to consider. Don’t forget that the necessary documentation for Ana Tow- struction prices are lower now than they City Gate is a cash machine which brings us er and will “begin construction, hopefully, were three years ago. “Before, there used €12m annually,” he points out. within three to four months.” In parallel, to be more building contractors on the 54 Romania CEDER

Panelists at CEDER spoke off- CEDER 2011 record, but CIJ had some post- Round-up conference questions

Leslie Warren why not)? and issues of location and occupancy. Leasing Director We are very unlikely to buy land this These issues will impact the possibility Helios Phoenix year as in present market conditions it‘s to finance the transaction. Accordingly, not possible to put a value on it so there properties lower down the risk curve would be great difficulty agreeing price have a higher demand, as long as the with the vendors. We generally will focus expected yield is consistent with market on income producing property. levels on a comparative basis. Demand Has the market changed for good into for more secondary or vacant assets an emphasis on BTS? is lower but the yield differential from Yes, the market has changed a little, primary assets is again key. The period but we don’t get a lot of BTS inquiries. David A Allen of holding for ourselves is governed by It’s more of a shift from logistics to Advisor to the Chay- the fund life, but generally we hold for 3 production. Sixty percent of our inquiries ton Capital Property to 5 years. were once from 3PLs. Now it’s 60 percent Funds light-production companies. Chayton Capital LLP

Will you buy land this year? Why or Does the lack of new office supply in Florin Popa why not? the pipeline provide a significant op- Vitalis Consulting Buying land isn’t on our agenda right portunity for well-thought out pro- now. To be honest, it’s difficult to get a jects? Or does the lack of tenant de- bank to fund land acquisition. With bank mand make it too big a risk? funding, we can all construct industrial Current demand is at low levels, but Does the lack of new office supply in parks. Without their support, it’s very there are signs of this improving in the pipeline provide a significant op- difficult. the medium-term. In addition, from a portunity for well-thought out pro- macro-economic perspective there are jects? Or does the lack of tenant de- also positive trends being noted which mand make it too big a risk? would point to future positive demand In Bucharest’s case, the so-called “office Chris Bennett trends. These indicators, together with space crisis” is still a paradigm of the real Director the fact that any development started estate market. I am not talking about the Europa Capital today would not come to market for lack of actual leasable square meters but at least 18 months, would lead one to about the need for suitable locations to believe that there are opportunities provide the proper working conditions for well-thought out and well-located in the light of the increasingly strict Has the market changed for good into projects. criteria of future tenants. There are now an emphasis on BTS? buildings less than 10 years old, already Build to suit is almost compulsory What is the current level of investor well-known landmarks, having trouble unless one is willing to develop with demand for office product? How long replacing tenants, while new projects are equity only, because financing for spec would you be prepared to hang on to a becoming a success almost over night. development is almost impossible. newly completed office building? Based on the current real estate portfolio The level of demand is directly of Bucharest, my opinion is that the well- Will you buy land this year (why or influenced by the risk of the investment, thought office buildings will represent a This issue is printed on 100% recycled paper

CEDER Romania 55

great opportunity at least for the current with a proper concept, a well-thought generation of investors. approach and a good location should be Ovidiu Sandor clear prerequisites. CEO ModaTim Investment What is the current level of investor David Hay demand for office product? How long CEO would you be prepared to hang on to a AFI Europe Romania Does the lack of new office supply in newly completed office building? the pipeline provide a significant op- While during 2009 and 2010 we have portunity for well-thought out pro- seen virtually no investor interest in jects? Or does the lack of tenant de- Romania, this changed in 2011 and we What shape are Romanian consumers mand make it too big a risk? see the first players being much more in? And how hard are government cut- While the lack of new office supply active in looking at properties and backs and the economic recession hit- is helping re-establish the balance placing bids. I would say this trend will ting consumers? between demand and offer, I think new continue. In 2012, if no major world-wide We need to differentiate between developments need to be considered economic event changes risk perception Bucharest and the rest of the country. carefully, and should be started only again, Romania should be approached In Bucharest, where unemployment is if demand in that respective market by the bigger, more institutional approximately 4 percent, it’s improving is evident. For any new development investors as well. slowly and gradually. At AFI Palace Cotroceni shopping mall, we can see a steady increase in retailer turnover – almost 20 percent year-on-year. The improvement is much slower (if at all) elsewhere in the country. The government cut-backs affect mainly the public sector employees. In the private sector the government cut backs have less effect, though they are felt.

What strategies are retailers employing? Are they trying to take advantage of the situation to expand, or just trying to survive? In our project, since turnover is up year-on-year, and since the tenant mix is constantly improving, retailers are quite happy and the most successful ones are trying to increase their spaces. In retail projects we’re working on at the moment (AFI Palace Ploiesti shopping mall and AFI Palace Arad retail park), we see retailers trying to exploit the current situation in the market to secure favorable locations and commercial terms. 56 Romania Office

Rather than pioneering new Offices going up at districts, AFI Europe is betting Cotroceni on established locations Robert McLean

AFI Europe has begun construction on The potential synergetic effect of As far as the shopping component of the first building of the office component combining offices and shopping centers Palace Cotroceni is concerned, Hay says at Palace Cotroceni. Romanian country is something Hay has considerable his focus is stabilizing the scheme by manager David Hay says that while he experience with. Until recently, Hay was increasing footfall and retailer turnover. has no tenants he can name officially, running AFI Europe’s Prague operations, “Remember, we opened it in the middle 2,500 sqm of the 11,000 sqm total is in where it built Palac Flora - a 20,000 sqm of a crisis, in November 2009, which isn’t an advanced stage of negotiations with shopping center along with 18,000 sqm easy with a mall of that size. You need a single client. The 10-storey structure of retail. “It’s a good combination,” says one or two years of stabilization in any will offer an additional two levels Hay. “You get all the office workers going shopping mall, no matter when you underground for parking. to the mall to shop for food or to the open it. But especially when you open in restaurants. And then in the evening it’s such difficult times.” The project illustrates the fact that while the same thing.” Larger office tenants speculative projects are definitely still the appreciate being able to offer their The developer had trouble getting exception in Bucharest’s pre-let universe, employees these sorts of conveniences. precisely the tenant mix it wanted, and developers are far more confident about had to make due with what was possible extending existing schemes. Hay is But Hay believes the location itself is ripe at the time. Since then, it’s been going confident the new office building will have for such a scheme. “We believe there will after the international retailers that a relatively easy time leveraging the steady be a need for new class A office buildings didn’t make the opening, for one reason flow ofhuman traffic that’s already in Bucharest in the next one to two years, or another. H&M, for example, wasn’t flowing through Palace Cotroceni. The specifically in the center-west where even in the country at the time. 80,000 sqm shopping center is producing there’s currently 7 percent vacancy. Apart 65,000 visitors per day on weekends, and from us, no new building has been started Hay says AFI Europe is currently working its entertainment component is arguably here this year. Even today, if you’re looking on a trio of new malls, located in the largest in Bucharest. to lease a large space, you can’t find it.” Arad, Ploeisti and another scheme in Bucharest. In Ploesti, he expects the New office space will only add to the visitor numbers at the Palace Cotroceni shopping mall project’s central location and lack of any competition to provide it with a strong position. The developer also secured a central location in Arad it felt was ideal for a mall, but it lost the race to the competing scheme Atrium, located practically next door to it.

The company‘s solution is to build a retail park instead, taking advantage of (and adding to) the traffic created by Atrium while providing a different sort of retail offering. “If you have a hypermarket, a DIY store and sports, then there’s no way you won’t succeed,” claims Hay. encompassme

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Coming This Fall 58 slovakia Investment

Creating its own fund is the HB Reavis launches next phase in the developer‘s fund regional expansion Robert McLean

HB Reavis has been busy picking up new the EU average,” he says. Our management company is regulated projects in Poland in 2011, which is no by the Luxembourg authorities and the easy task in such a competitive market. “We therefore believe the time is right management team has experience with Now, in what looks like the second for us to launch a new business line of management of private equity funds in phase of its CEE expansion strategy, the real estate investment management. the UK.” Slovak property company HB Reavis has launched a €165m real estate fund One of HB Reavis’s Aupark malls will be placed in the new fund that will focus on assets in the core CE markets.

It’s seeding the fund with five of its properties: two Bratislava office blocks, one of its Auparks and a pair of logistics parks. This provides a certain level of sector diversification and the company offering 7 year principal protection as well. HB Reavis hopes to raise €100m in equity commitments and estimates it will provide 11 percent returns (50 percent of which is to be distributed). Spokesman Roman Karabelli says the timing is right for such a move. “We see a post-crisis come-back of commercial properties, while the economies of core CE countries are expected to achieve growth above

3nity gets 2nd year. In all, 154 flats are planned in the 87.6 chance meter building. In addition, 8,000 sqm of Construction on Tower B retail and entertainment is planned, along has gotten underway at with 4,500 sqm of offices. 3nity LifeStyle Residence, as it appears “To ensure easy access to the commercial that the developer Vara Group is ready businesses in the entertainment portion to re-start the project. Development of of the project, the first four floors of tow- the complex stalled after completion of ers B and C have already been built,” says the foundation and underground works, Marianna Zahradnícková, Vara Group’s as the financial crisis killed off demand in marketing manager. “Residents of block A, Bratislava’s residential market. Comple- tenants in the office space as well as visi- tion of this first tower, which is planned tors will be able to use the services in the to stand between two subesequent struc- building by the end of the year.” tures, should take place at the end of the The CIJ Awards event in CEE just got even more exciting

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Regional Partners Media Partners Official Independent Advisors Organizer 60 slovakia Residential

It’s not a boom, but sales are Residential’s rebirth up, as is the confidence of the in Bratislava stronger residential developers Robert McLean

A year ago, Bratislava’s residential market 350 sales. This year, there were nearly Miroslav Barnáš was starting to shake off the cobwebs 700.” of a financial crisis that had sent it to its knees. Sales were starting up again in But falling prices is only one ingredient some projects, but the “recovery”, as it in a mix of factors that are turning the were, was still far too fragile and young to tide, albeit slowly, in favor of developers. be taken seriously. Still sales continued to The first is a general level of economic recover in the second half of the year, and optimism that’s crawled back into a greater sense of confidence was evident the thinking of many Slovaks. They’re from developers, agencies and banks. not getting rich just yet, but despite persistently high unemployment As we head into the traditionally slow numbers, a return to mild GDP growth summer season, the vibe is substantially seems to have soothed the job security more positive. There’s robust confidence jitters of many. “There are 2,900 new apartments still that sensibly-priced flats in the Slovak available,” says Barnáš. “Of those, 50 capital have a good chance of selling. More importantly, however, the banks percent are being completed at the appear to be trying to do their part to moment.” A year ago, the number was One of the main drivers of this re-birth get unsold residential projects off their roughly 1,000 units higher. Over time, of hope, says Miroslav Barnáš, head of balance sheets. Žoldak says that not healthy demand and a lack of new supply Jones Lang LaSalle’s Bratislava office, is only are two or three banks offering 100 points to one possible outcome: higher a reduction in price. The average asking percent loans possible again, but they’re prices. price per square meter in the first quarter being offered at interest rates as low as of 2010 was €2,100. That’s now €1,900. 3.5 percent. Consumers seem to have Barnáš and Žoldak agree that the days “And the average price of sold apartments concluded that those kinds of rates are of the huge apartment are over, at least is around €1,700 to €1,800 per sqm. That’s unlikely to stay so low very long, and for now. “Around 75 sqm, that’s the liquid where the market is today.” there’s no guarantee they’ll ever come product,” says Barnáš. back. So the number of projects where Filip Žoldak, a founding partner at the flats are selling has expanded as well, he Žoldak says that one of the more recently created residential agency says. surprising changes brought on by the Herrys, agrees that price cuts have made crisis has been the attitude of developers a big difference. “They’ve motivated The final piece of the residential puzzle, of to “outside” advice. “They’re listening people to buy,” he says. “There are more course, is supply, and this too has finally more to agents and to the people who and more compromises on both sides, swung in favor of developers. Just as the really deal with the apartments,” he says. from clients and from developers. The pace of sales of flats gradually ramped “Before, the comment we got was always developers want and need to sell and up over the past year, the pipeline of new ‘it’s my money so don’t tell me anything buyers want to buy.” projects has dwindled. So while there’s I will do it the way I want to.’ Everyone still a considerable amount of product who had money in Bratislava thought So eager are consumers to buy, he claims, still on the market, there’s not much they could be a developer. Today, the that the pace of sales doubled in Q1 2011 prospect of it being replaced as quickly as real developers have remained, but the compared to the same period in 2010. “In it disappears. rest of them have returned to their core the first three months of 2010, there were businesses.” cee_cij_240x290_mapic_awards_gb 14/06/11 16:38 Page1

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2011 France MAPIC 62 slovakia Q&A

Hajdu: Focus Pavol Hajdu (VÚB) says old shifting to residential projects need to look commercial out for new ones

How have developers changed their approach to residential pro- layout. As far as I know it’s not easy to find a suitable flat. It’s not easy. But jects? it’s probably a question of price. They changed their mind, their approach, they’re trying to re-set up their projects based on the demand of the market. But there are new developments starting now. You’re financing some of them. They’re going to be difficult competition for exi- They weren’t doing that before the crisis? sting developments, aren’t they? Before, I think no one was thinking so much what the market really They’re a threat for the existing ones, because the new ones being de- wanted because the market basically absorbed almost everything. veloped now are going to have better layouts, better areas, and lower There was no need to do market studies or feasibility stories. Now they prices. This is the danger for them. see that people want residential only some types of layout of the flat of the apartment, only some average sqm, people don’t want to pay for So, there’s not much in the pipeline, and relatively uncompetitive large territories. They don’t need it and they aren’t willing to pay a lot of existing stock. That will encourage you to lend to developers on money for it. So they re-thought their project and they’re coming to the new, more competitive projects. market with projects that reflect this need. Those who have land for a good price and can build at a good price can do well. People need to live somewhere and there’s a real need for flats Projects are smaller as well, aren’t they? for young families. I think developers should be optimistic but they re- They understand it’s not easy to sell a lot of flats at once, so they started ally have to structure a good project. to divide the projects into phases. That makes it much easier to do the pre-sale. Selling 20 to 30 percent of 50 flats is quite different than trying If people bought land in 2007, they probably paid too much, right? to do that with 500 units. It may have some impact on the cost side and They probably did. But if they write off some of the loss, then they can the margin may be reduced a bit, but I don’t see it dramatically and it still have a good project. I would accept only the realistic value of the gives more comfort to both sides. land. That’s what I’d count as equity, not necessarily what they paid. The best Real Estate News for Hungary, Poland, Czech Republic, But that’s true on the lending side as well. It’s the same amount of And then you’ll give them how much? work for less money. Around 60 – 70 percent loan-to-cost, in combination with around 20 Russia, Slovakia, Romania and Ukraine. It’s true, it’s less efficient for us, so we have to do more, smaller projects. – 30 percent pre-sale. Then it depends on the location. If it’s a great loca- But the truth is that we see residential development as not the most im- tion, and I’m sure it will sell, we’re more likely to accept 20 percent. If it’s portant in our portfolio, so we’re not focused on growing in residential a normal location, then closer to 30 percent. development. There was a time when we had over 50 percent of our portfolio in residential, but today it should be more like 20 percent. Our The dilemma for banks is that they have clients with flats they can’t strategy is more focused on shopping centers and office centers, and in sell. So when banks finance strong, new projects, they’re creating Receive CIJ in your email each month build-to-suit logistics. competition for their existing clients. What do you recommend by subscribing at [email protected] your existing clients do? And do they listen? There are roughly 2,500 flats under construction or for sale in Bra- We advise them to lower their prices. Sometimes it’s successful and tislava. Is that a big number? sometimes it isn’t. Some of them come to us to ask if they can lower the I don’t think it’s a big number. What I see as crucial, is we should talk price (the original agreement didn’t allow them to go below a certain about how many of these are flats that are wanted by the market. If this level) accepting that they’ll have to make some write-off on their equity number is very small, then it’s a problem, and I think that’s the situation. in order to minimize their losses. I think most of them realize that just I think a lot of these flats are too large, meaning the price is too high, waiting isn’t a solution. even if the price per sqm is fine. Do you need a two-room flat with 100 As for us, if we don’t finance new projects, other banks will. So we can’t sqm? No, it’s too much, but you have to pay for each square meter. Then help our clients by not financing new developments. And if we finance The best Real Estate News for Hungary, Poland, Czech Republic, Russia, Slovakia, Romania and Ukraine.

Receive CIJ in your email each month by subscribing at [email protected] 64 Regional Marketing Q&A

CIJ surveys some of CEE‘s most 3 Questions, prominent marketing specialists 3 Answers: in CEE about everything from PR, Marketing or Personal, job satisfaction, to travel plans, tell me the truth. to secret weapons

Is the car you‘re driving worth more than CZK 100,000? I am registered as an owner of a 1977 Alfa Romeo Spider, but I don’t really drive it as I bought it as a present.

Edina Mago Marcela Veselá Marketing Manager Marketing & Public Relations AIG/Lincoln CB Richard Ellis Hungary Czech Republic

What’s the best thing about being in Where were you 3 hours ago? marketing? Three hours ago I was walking our black What I like about being a marketing expert Labrador, Monty, and smooth collie puppy, is that I get to know about all the parts of Barnabáš, by the river enjoying the fresh the company: sales, finance, development, breeze and views of Prague castle – also property management and so on. I can be trying to stop them stealing bread that Head of Marketing Department of help to everyone, and all of the sectors people were giving to the swans! CAELUM DEVELOPMENT can count on me. Poland Are you rich? Do you plan to be some- What’s the next trip you are going to day? Are you someone’s best friend? take? Not yet – working on it! But one day I wish You ought to ask the people I consider I have two dream destinations: Southern to be rich, run a charity and help all those friends that question, but I think so. There Italy, alone with my husband. This trip will poor children, old people and dogs...I’d are definitely people who can count on me definitely happen this autumn. The second start by buying Troja Dog Shelter! Yes, I day and night. trip we’re planning is a week in Turkey, on know, it’s quite naïve. the beach, with my two sons. Maybe this When’s the last time you got stopped by summer… Are you someone’s best friend? a cop or pulled over? I have known Heli Hurabova (Office Agent I have to admit that I’ve been stopped for Are you someone’s best friend? at CBRE) for many years and we regularly speeding. The last time was in August. Since Fortunately, yes! And by chance, she is a talk about life, work, and real estate over a then I’ve been trying to be more cautious colleague of mine. Although we sometimes cigarette and Starbucks coffee. Although while driving, and to listen to the CB radio have professional debates, it doesn’t influ- you should probably ask my friends if they more carefully. ence our private friendship. When we speak consider me to be their best friend. about kids nothing else matters. This issue is printed on 100% recycled paper

Marketing Q&A regional 65

What’s the best being in being in mar- If you could choose any city to live in for there for two years and I would love to go keting? two years, where would that be? back to settle again in Surrey Quays and An opportunity to create new ideas and im- My biggest dream is to work in New York work in the City. If I had to choose not to plement them. I follow the rule: the sky’s the City, I would also like to settle in London. work, only living, I would say United States, limit, or not even that! Los Angeles perhaps, maybe a sleepy place What’s the last book you started but like Dallas, or some happy island like St. Lu- What’s the hardest thing about being in didn’t finish? cia. marketing? I’m addicted to reading, so it’s never hap- Facing up to the reality that there’s a com- pened that I wouldn’t finish a book. Recently, What’s the last book you started and mon belief that anyone can do marketing. I read Blood Vines by Erica Spindler, currently didn’t finish? I’m in the middle of David Baldacci’s Stone Unfortunately, there’s too many of them – What’s your favorite wine? Cold. last one is ‘Kod Brytania’. I don’t drink wine, but I do have a favorite aperitif – campare with grapefruit juice. Name one non-work related goal They say that it’s no longer in fashion, but it I would like to raise my children to be happy, tastes wonderful – especially in the summer. wise and fulfilled people.

Paulina Krasnopolska Marketing and PR Director CB Richard Ellis Polska Poland Aneta Mandziuk Boldizsar Horvath Senior Marketing & PR Specialist What’s the next trip you are going to Senior Associate Marketing CB Richard Ellis take? Colliers International Poland My family and I planning to go to Jastat- Hungary nia, Jurata, and a tiny village Brajniki of What’s the next trip you are going to Mazury. Are you someone’s best friend? take? I believe so, yes. We have been best friends I’ll spend my holidays in Munich, visiting Ba- What’s the best thing about being in for more than 10 years now. I think it is rath- varia, and like every year, I will be relaxing in marketing? er exceptional, fortunate and it feels great, my home region of Mazury. Being in direct contact with customers, jour- that we are best friends of each other. But nalists, advertising agencies and graphics this is just a reason of many why our friend- What’s the best thing about being in studios. In general, contact with people is ship will last forever. marketing? the best part of my work. The thing I value the most in marketing is What does your last text message say? having direct contact with clients and me- If you could choose any city to live in for It’s a thank you note for my father, who dia. Most enjoyable part of my work is ar- two years, where would it be? bought me a nice T-shirt for my birthday. ranging events for clients and employees. I’d have to say London. I lived and worked When I got home from our dinner together 66 Regional Marketing Q&A

I tried the T-shirt on and it fits perfectly. So, The most important thing is balance. I stick I sent him the great news that he guessed to this rule. my size right, and thanked him again for the evening. What’s your favorite wine? Chilled, with a gentle nutty flavor / delicate What’s the best thing about being in hint of / gentle tone of / hazelnut, perfect marketing? with poultry, cheese and other appetizers. It is a tough one to find just one thing. Proba- bly the best thing is that I can be completely What’s the last book you started, but myself in the job I am doing. I can use and didn’t finish? add my whole personality to the colorful Woody Allen – Conversation with Woody Allen. challenges and tasks which are rarely the same. This ensures that I never get bored in what I am doing. It is always challenging to Orsolya Nemeth understand the clients’ current needs and Marketing and PR Manager providing them the best solution for their Cushman & Wakefield current problem or task. Hungary

Are you someone’s best friend? Yes, I hope so. I met my best friend in elemen- tary school 18 years ago. I think our relationship is special, and besides my very close family and husband she is my one and only best friend and hopefully I am hers as well.

Petra Kamešová Do you collect anything? Head of Reception, Marketing I collect everything, that has a ladybird on CTP it. I have all different kinds of boxes, stickers, Czech Republic erasers, chocolate, key rings, wooden lady- birds in every size etc. Magda Cieliczko If you could choose any city to live in Director / CEE Marketing for two years, where would it be? What’s the best thing about being in Colliers International Before I met my husband I planned to go marketing? Poland to Spain. No particular city, I just love the The best thing about working with market- Spanish language, culture, food and I ing is that I am involved in the work of all de- Are you rich? Do you plan to be some- wanted to learn some more from inside… partments within the company. I like organ- day? the dream ended up with learning a few izing and coordinating things, I like doing PR I’m incredibly rich and still planning to be sentences during my stay in England, un- activities and dealing with charity issues. It even more… spiritually of course fortunately. Maybe one day… always makes me happy to help other people and to see the reactions. Do you collect anything? Name one non-work related goal Smiles To finish my house and have one of those What brand do you respect the most? beautiful gardens you see in magazines Cushman & Wakefield. It is strong, unique, What brand do you respect the most? where I could just relax. Reality seems like representing expertise and quality. My own. it will take forever, though, so once it’s done Does your career get in the way of your we’ll start working on repairs. What’s your favorite wine? social life? A good friend of mine showed me a semi-dry This issue is printed on 100% recycled paper

Marketing Q&A regional 67

white wine from Tokajicum winery called Yes. Well, most of the time. The older one Muscat Lunel. Although I only like dry white gets the less cautious one becomes. wines, this one is really tasty, fruity and light. What’s your favorite wine? It has to be Spanish Red Rioja Reserva from 2001: Rich, full body, full of passion and hangover free!

Mgr. Petra Kopecká PR Manager, Spokesperson FINEP CZ Czech Republic Nati Cucalon Marketing Manager Europe Where were you 3 hours ago? EC Harris Between fields, walking with my dog and United Kingdom Zsuzsanna Báthori shouting at him to leave the rabbit alone! Marketing coordinator Who won? The rabbit of course! Are you someone’s best friend? ESTON International Of course. Isn’t everybody? Hungary Are you rich? Do you plan to be someday? What’s the best thing about being in Do you collect anything? I am a very rich person already. I have lov- marketing? Buttons. You never know when they’ll be ing parents and brother, lovely boyfriend, a I’d say understanding getting to know the needed. small car, a nice house, a fabulous dog, sev- cultural and social intricacies of each Euro- eral good friends, quiet neighbors, good job, pean country to ensure that marketing cam- What’s the best thing about being in some money in the bank, strong health and paigns are totally tailored to the right target marketing? many, many happy days in peace... audience. Having said that, engaging with Free-of-charge movie tickets. Seriously, translations, different symbols, accents, etc, though, it’s not only a job but for me it’s fun, What’s your favorite wine? of 11 countries in Europe for EC Harris has too: creating, shaping, managing and rais- Penfolds, Rawsons´Retreat, Shiraz Caber- brought a new dimension to my role!! ing a company’s communication and prod- net, 2008. Absolute ecstasy with a really big ucts just as if they were your children. piece of steak! What brand do you respect the most? I like the English television channel BBC: un- If you could choose any city to live in for What brand do you respect the most? pretentious, quality focused, creative, loyal two years, where would it be? UNICEF. Because it is not just a brand... and with no adverts….like me. Somewhere at Worthersee (Austria) – sun & hills, clear air, fresh water, nice food, no Who knows your secret weapon? work. No one should ever know your secret weap- Get recognized on. They can guess it but they’ll never know What’s the last book you started, but for certain. didn’t finish? Rejtő Jenő: A néma revolverek városa (P. Do you always speak your mind? Howard: City of silent revolvers) 68 Regional Marketing Q&A

Irina Gheorghe Majella O Doherty Edina Nagy Marketing Manager Communications Manager Director Gardiner & Theobald Goodman Europe Marketing & Research Romania Belgium GVA Robertson Hungary Do you collect anything? Last time you got stopped by a cop or Travel guides, maps and postcards of the pulled over?? What does your last text message say? places that I visit. About two years ago on a very hot May even- “Are you an engineer?” ing in Brussels I got slightly lost due to road What’s the next trip you are going to works and tried to maneuver a sneaky u-turn Do you collect anything? take? in order to get back on track. I wasn’t sneaky Experiences which are good to remember. I don’t know if it’s the next trip I’ll take, but enough because I was caught immediately. I recently saw a friend’s album from a trip Thankfully, I was let off with a warning What’s the best thing about being in to the Amalfi Coast – great photos, I would marketing? like to see the region in the future. Who is the biggest gossiper you know?? I like its complexity: some creativity, some If I told you that, would it make me an even organization, some communication, some What’s the best thing about being in bigger gossip? planning, some finance, and so on. marketing? Innovating, anticipating the trends, and Next trip you are going to take?? What brand do you respect the most? being able to cater to them as a company. My next trip will be to Dublin for two nights I respect a lot of brands but there is one brand to catch up with some friends that I haven’t which I know quite well and use their services What’s the hardest thing? seen in a few years. It will be a mix of long a lot and that is Google. I like their story. Slicing the bigger picture. lunches and dinners with lots of chatting, and hopefully I will get to fit in some shop- If you could choose any city to live in for What brand do you respect the most? ping. I can’t wait! two years, where would it be? Apple (and Steve Jobs), for the vision and In Italy. Rome or Florence. innovation with which they do things dif- What’s the best thing about being in ferently, as well as for the simplicity/func- marketing? tionality of their design. The diversity. Every project or campaign is different, so there are many opportunities to If you could choose any city to live in be creative. It’s always satisfying to see the for two years, where would it be? evolution of a project. Get remembered New York – I spent a summer there when I was in university and have always wanted If you could choose any city to live in for to go back. two years, where would it be? New York. This issue is printed on 100% recycled paper

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Adrienn Erdelyi Nika Frouzová Aneta Parzuchowska Project Developer Head of PR and Marketing Head of Marketing CEE & SEE, HOCHTIEF Development Hungary Jones Lang LaSalle Associate Director Hungary Czech Republic Jones Lang LaSalle Poland Are you someone’s best friend? What does your last text message say? I’m lucky to be able to say that there are :)))) Are you rich? Do you plan to be some day? more best friends in my life. My two sisters Benjamin Franklin used to say “Who is rich? aren’t just only sisters but also best friends. Do you collect anything? He that is content. Who is that? Nobody.” Age-wise we are very close to each other, I collect diamonds, but so far my collection Therefore I work hard to be content and if grew up together and have a lot of com- is very modest. by the way I become rich, then it would be a mon experiences. Also, my best friends nice side effect. have lasted formany years now. It’s funny What’s the next trip you are going to that all of them started at one of my previ- take? Who is the biggest gossiper you know? ous employments. A surprise long weekend. I have no idea If I had answered this question, it would where I am going but I am very excited have been me. What’s the next trip you‘re planning about it. It is all very mysterious… to take? What’s the best being in being in mar- At the end of June I will travel to Malta to What brand do you respect the most? keting? spend for a really nice time. I’m going with Brands that speak for themselves. Brands From my point of view it’s an opportunity to a friend who works there, so some local that don’t need to lie in advertisements. express creativity. guiding is ensured. We’ll probably go to all the historic places, be amazed by the na- Who knows your secret weapon? What’s the last book you started and ture and will relax on the beach as much as If someone knows, they should tell me, so I didn’t finish? we can. can start using it. Actually, there are three books I started reading at the same time but I haven’t managed If you could choose any city to live in Do you always speak your mind? to finish any of them yet. These are: Jürgen for two years, where would it be? Yes, unfortunately. Thorwald “A Fragile House of Soul” (history If I had learned French properly, I would of the neurosurgery), Niccolò Machiavelli definitely choose Paris. It’s one of my fa- “The Prince” and “The Art of War” by Sun Tzu. vorite European city and probably the only Get profiled It’s a strange combination but I have always one destination that I can’t get enough preferred popular science to literature. of. Paris has many faces and I always find something new in it. What brand do you respect the most? My own. It is called Reputation. 70 Regional Marketing Q&A

saw right after I finished university. I knew Do you have a car worth over PLN this city provides possibilities and chances 8,000? for development and I was right about Yes and no. I have a Reno Clio Williams, that. However, if I had to choose, I would looking at its market price the car is worth say London or Paris. Those are the cities less than that but it’s unique to me and has where you can’t get bored. a sentimental value that’s way above its selling price.

Kamilia Kowalska Marketing & Communication Specialist Liebrecht & WooD Poland Poland

Are you rich? Do you plan to be someday? It’s an ambiguous question. Wealth has its material and spiritual side. I believe both Ewa Rasińska are important, because material well-being Senior Marketing Manager makes possible self-education and fulfilling Business Administration Eszter Pajor our dreams. I consider myself more spiritu- King Sturge Personal Assistant ally rich for now, but I’m slowly starting to Poland Investment collect material goods as well, such as a (Marketing) plot under the home I’ve dreamed of. We’ll What’s your favorite wine? King Sturge just have to wait and see what comes next. For hot summer days, especially in the gar- Hungary den with friends, my favorite wine is chilled, Does your career get in the way of your crisp Chablis. This wine is very refreshing What does your last text message say? social life, or vice versa? and goes well with all kinds of grilled dish- ‘I know, raincoat, chatted with mum and I had some problems with it at the begin- es. On the other hand on the cold winter your boy. I am very very glad!!!!! Tomorrow. ning, so I realized a few times that I spend evenings curled up on the couch under a Xxx’ three quarters of my day working. I begun blanket with a good book I prefer to drink (It was sent to my sister, who was in the to changing my attitude, and I think I suc- Australian Shiraz, which is soft, warm and hospital after undergoing surgery, which ceeded. One day you begin to understand, fruity. was fortunately successful. The part about that without time for yourself, without te the raincoat, does not have any rele- sports, hobby or meet your friends you lose What’s the last book you started, but vance, it was changed by Apple predictive much more, then you think. As it happens, didn’t finish? services) I’m expecting the baby as we speak and I’m “The Kite Runner” by Khaled Hosseini, is hoping that this experience will also enrich the story of a young boy from Kabul, who Do you collect anything? me. lives through dramatic events in Afghani- Hugs and experience. stan history. I started reading it right after If you could choose any city to live in reading “A Thousand Splendid Suns” by the Who knows your secret weapon? Get it out there for two years, where would it be? same author, which showed the hard life Tarrant Hightopp (aka Mad Hatter), from I consider myself an urban creature. I like in Afghanistan but from the perspective of Alice in Wonderland. big cities, that’s why I set of to conquer War- two women. This issue is printed on 100% recycled paper

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Anita Pietrykowska Šárka Štěpánková Marketing & PR Manager Group PR & Marketing Manager Panattoni Europe PointPark Properties Member of the Management Board Poland Czech Republic (Marketing) MLP Group Do you collect anything? Poland What’s the best thing about being in I collect books by Agatha Christie. Not just marketing? the crime fiction we all know, but also short Where were you three hours ago? Overcoming standardized approaches and stories, travel books, her autobiography, In my car, on my way to work. I had the pleas- providing a new way to look at a worn-out books she wrote under the pseudonym ure of getting stuck in a traffic jam in a crowd topic, as well as the lack of monotony and Mary Westmacott and poems, which very of millions. I guess we all are familiar with that. an opportunity to create... few people know about. She’s still one of the most translated authors in the world and What does your last text message says ? What’s the hardest thing? who was full of optimism till the last mo- “Please, sit down, make yourself comfort- Measuring the effects of your work ments of her life is a great inspiration for me. able and breathe! You’ve gotten the golden She never gave up anything. And honestly – text message! PLN 100,000 is within your Do you collect anything? she always catches me! reach! Send back this message…” Unique experiences – a true rarity. What‘s the next trip you‘re planning to Who knows your secret weapon? Do you always speak your mind? take? No one. If someone knew about it, it wouldn’t In most cases I do, but it doesn’t always pay Norway. I am ready to catch a plane to my be secret. There are only people who guess off favorite Scandinavian country anytime! how it works. Sailing in the middle of the fjords, walk- Are you somebody’s best friend? ing around crystal clear lakes, eating fresh Name one non-work related goal Time and distance have shown, that I’m shrimp in the port restaurant – it’s unforget- Dolce vita happy to be one. table. The relaxed way Norwegians live and their optimism is admirable. Every trip to the north charges me up with new energy.

If you could choose any city to live in for Get it out there two years, where would it be? Oslo. I’ve been there many times and I still love the town. I never get bored there. So many interesting places to go and visit but 72 Regional Marketing Q&A

also you can just sit on the Aker Brygge, smell energy to understand the Quran first to be ness offers. And offers in general. But that the sea, eat fresh fish and enjoy the sunset. I able to figure out all these symbols used in comes with the job, and it’s a small price to feel free there. After a few days in Oslo, I have this book. But who knows – perhaps in the pay compared to all other good things. the feeling I can do anything in the world. future... What brand do you respect the most? What’s your favorite wine? It is pretty difficult to choose one brand. Dry red – Amarone. However, I can say I admire IKEA a lot, because it’s not just a brand, but also a concept and life-style.

What’s your favorite wine? My favorite wines are Madeira and Porto. They are strong and sweet at the same time, and have that special flavor.

Marta Tęsiorowska, Vice President, Marketing & Communications CEE Iulia Enescu Prologis Public Affairs Coordinator Poland Business Development and Marketing Salans - Moore si Asociatii SCA What will your next travel destination Romania be? As a natural born traveler, next time I will What‘s the next trip you’re planning to Monika Szlaga go to… Portugal, of course. It’s my favorite take? Marketing & Administrating Assistant destination and I always feel relaxed there. I My next trip will be in Santander, the capi- Portico Investment love the climate, the Iberian cuisine and the tal of Cantabria province in northern Spain. Poland mentality – especially in Algarve – because I chose it due to its location, as I am in love of their enthusiasm, openness and friend- with the Atlantic Ocean. It’s also a less a less Where were you three hours ago? liness. Portuguese landscapes never fail mass-tourism destination. On my way to the office, in a crowded train, to impress me – the sights are what I miss thinking if the misery of the people commut- most. I also look for the tastes of this coun- What’s the best thing about being in ing is ever going to end. try in restaurants in Warsaw. I prefer those marketing? where I can have caldeirada or bacalhau. For me, the best thing about being in mar- Are you rich? Do you plan to be someday? keting is that the job keeps you in a per- I’m planning to be happy and fulfilled. If cir- What’s the last book you started, but manent state of alert (in the good sense of cumstances are favorable, I wouldn’t rule didn’t finish? the word). You can’t afford to fall behind out getting rich. I’m not on the “Forbes” list Basically, I finish any book I start. And I and you have to be able to identify market so far, but who knows, maybe some day. read quite a lot – one book a day – when trends as they happen. I’m not at work. But I tried to read The Sa- Are you someone’s best friend? tanic Verses by Salman Rushdie once and I What’s the hardest thing? Not just for anyone, but for unique people. I had to give up. To understand the novel, I The hardest thing is (sometimes) to man- appreciate friendship, it allows allows you to would have had to spend a lot of time and age the huge flow of information and busi- be free to express yourself and to be at ease with someone. This issue is printed on 100% recycled paper

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I’m sure it sounds like a cliché, but I honestly speak on the phone every other week, or wish I had more time for reading. My day is see each other once a month we can always often unpredictable and sometimes I strug- count on one another. Having a best friend gle just to get a few hours in the evening and in this day and age is something I consider go to the park with my daughter. The book a privilege. I currently have on my night table is called “Cartea Soaptelor” (The Book of Whispers) Do you always speak your mind? written by Varujan Vosganian. It’s very in- I kind of have the habit of speaking my teresting but I just didn’t give it enough time. mind, although this usually bothers people. When it comes to family and friends I always do, and they know it and love me for this. If Do you always speak your mind? it’s work related, I sometimes think before That’s a tricky one – I think true honesty is letting it out, I have to take into considera- Nicole Sommer not to say what you think but to think what tion the consequences as well. But if I know I Business Development Consultant. you say. Because you can speak your mind am right I never hold back. (Marketing) in so many different ways and if you choose WSP Group your words carefully, both in your personal Romania and professional life, the people around you will value your honesty and will not be hurt Does your career get in the way of your by bluntness. I think people consider you social life, or vice versa? honest when they know that your word is Honestly, I never thought of it this way. My your bond. Do what you say and say what job is all about meeting people, making and you do. Walk the talk! building relationships and most of the time I get the chance to get to know the person behind the professional. I’ve been lucky to meet some wonderful people in real estate and some of them have become my friends Advertise whom I see socially. So, my social life goes in the No.1 read hand in hand with my career. magazine in CEE If you could choose any city to live in for two years, where would it be? With no hesitation I would choose London. I think it’s the number one city for business in Europe. It’s true that London life is grey, wet and cold in more ways than one, but for the locals, there is a color and a warmth to life in Ira Potcoava the UK capital that’s hard to find elsewhere. Marketing Manager By 9:00 a.m. in London every street, bridge, Liebrecht & wooD Romania office, newspaper stand, clothes store, sta- Romania tion, coffee shop and link to the Internet is in full force. You can really feel the speed and Are you someone’s best friend? the energy. I am proud to say that I am someone’s best friend, and I consider her as well to be What’s the last book you started, but my best friend. We’ve been through a lot of didn’t finish? things together and even though we only 74 REGIONAL Events

Prologis Prologis organized a cocktail partyfor its business partners in Prague’s U Prince terraces in early June. Seventy guests arrived to enjoy the location’s beautiful view of the Old Town Square on a summer evening.

Martin Polák right (Prologis) with guests Marta Tesiorowska center (Prologis) with guests

Cushman & Wakefield The European C&W Volleyball tournament held at Wem- bley Stadium in London in mid-June, featuring teams from all Europe. Prague’s office, for example, was represented by seven staff. Šárka Ptácková, assistant to CMG Czech Team: František Gregor, Tomáš Beránek, Šárka Ptáčková, Lukáš Vostrovský, Robert Bocker, Petr and Hospitality teams, represented the C&W Prague of- Markvart and Jan Voslář Šárka Ptáčková kissing her trophy fice as captain of the winning women’s team.

swedecenter Česká spořitelna SwedeCenter laid the cornerstone for For Česká spořitelna’s “Day for Charity” Business Garden Warsaw on June 2. It’s program, employees are given two the first of a trio of green business parks working days to take part in projects envisioned in Poznan, Wroclaw and for charities that benefit the commu- Warsaw that will provide 300,000 sqm nity or the needy. In 2010, 1,655 of its of prime office space while focusing on The ČEZ Group team in action employees took advantage of this op- environmental sustainability. portunity.

The winning team, made up of ČEZ Group employees

Henryk Liszka (Hochtief Polska) and Roger Andersson (SwedeCenter) passerinvest PasserInvest held the 11th “BB Cen- trum Cup 2011” in early June for tenants of the BB Centrum office park in Prague 4. Other participants in the tournament included Hewlett-Pack- ard, ROSS, HUAWEJ, the CEZ Group and Balance Club Brumlovka. This issue is printed on 100% recycled paper

Appointments REGIONAL 75

Ian Elliot Colliers International has appointed Ian Elliot as its retail business development director for Eastern Europe. Ian will be focusing on the markets in Belarus, Poland, Russia and Ukraine and will be responsible for introducing and winning retail agency and property management business. Ian has 30 years of retail experience, having headed projects throughout Europe. Prior to joining Colliers he worked as associate director in Southern Europe for CBRE.

CB Richard Ellis has taken Jan Kratochvíl on board to join its tenant representation and global corporate services team as associate director. Prior to joining CBRE Jan has worked for its competitor – Knight Frank for ten years. Jan graduated from the pedagogical Faculty in Hradec Králové. He is fluent in English and Russian.

Jan Kratochvíl

Martin Kele Martin Kele has taken on the new post of director of operations on the PointPark Properties (P3) corporate team. He will be responsible for the coordination of internal activities at P3. Martin comes to P3 via Citibank, where he worked in the front office as a relationship manager for corporate clients and in the back office as the documentation unit head and business unit manager. In his position he was responsible for corporate operations in the Czech Republic, Hungary, Romania, Slovakia and Bulgaria.

Graham MacMillan has been promoted to director and to the position of coordinator of CEE valuations in CB Richard Ellis. Graham will continue in his role as head of valuation in Hungary, and at the same time he will coordinate CBRE’s valuation departments throughout the region. Graham will focus mainly on cross-border valuation, including large portfolios and regional banking clients. Originally from Scotland, he joined CB Richard Ellis Hungary as a senior valuer in June 2008 and was promoted to head of valuation in June 2009. Graham MacMillan

Andrew G. Sandor Squire Sanders has welcomed Andrew G. Sandor back to its Budapest office. Andrew focuses his practice on corporate matters including private equity, mergers and acquisitions, real estate and corporate finance. He’s rejoining Squire Sanders having been a senior associate in the company’s Bratislava office from 2003 to 2008. Since 2008, he’d been working as dedicated outside counsel to Royalton Partners.

Squire Sanders has also appointed Lajos Wallacher as a senior associate in its Budapest office. A former vice president of the Hungarian Competition Authority, Lajos specializes in competition law, merger control, restrictive agreements regulations and dominant position practices. He’s taught classes at several universities on legal subjects including European Union law, competition law and legal proceedings.

Lajos Wallacher Drinks before home

Lóránt Kibédi Varga (CBS Property) and Jake Lodge (Axa Reim) and Ben Adrienne Konthur (CB Richard Ellis) Perez Ellichewitz (JLL)

Zsuzsanna Sarkozy (RPMG), Balázs Lohn (Lohn Law Firm), Liam Crow (Capital Growth Adrienne Konthur and Tim Robert Fletcher (RPMG) and Solutions) and Dalma Mózes (RPMG) O’Sullivan (CB Richard Ellis) Andrew Jackson (First Title)

Damian Niedzielski and Renata Paweł Zawadzki, Brian Burgess (Savills) Osiecka (Axi Immo Group) and Marek Krajewski (Ghelamco)

Robert Fletcher, Robert McLean (RPMG) Radosław Ignasiak, Beata Hryniewska (Jones Lang Tomasz Ożdziński (PricewaterhouseCoopers) and Ian Elliott (Colliers International) LaSalle) and Tomasz Oborski (Axi Immo Group) and Ida Stankiewicz (Jones Lang LaSalle)

Paul Lannoye (Atenor Group) and Rodica Tarcavu (DTZ Echinox) and Leslie Warren (Helios Phoenix) Stephen Burke (Cefin Real Estate)

Mihaela Nichitelea, Carmen Grigore, Valeriu Petrescu and Adrian Balasu Cristina Barbuceanu and Cristi Radu Petre Nastase (Adest Architecture) (Building Support Services) Gavrila (Vitalis Consulting) and Sven Lemmes (AIG Lincoln) This issue is printed on 100% recycled paper

DBH REGIONAL 77

We’d like to thank all the sponsors of DBH for their support during these turbulent times, as DBH Calendar 2011 it’s created a monthly meeting point that is sorely needed in today’s marketplace.

Hungary

June 2

September 1 Katalin Honi (DTZ), Dávid Honi (DTZ) Dávid Honi(DTZ) and Balázs and Zoltán Lehoczky (STRABAG) Lohn (Lohn Law Firm) Lóránt Kibédi Varga (CBS Property) October

November

December Winter break

Szilvia Kabacs (Kinstellar), Liam Graham MacMillan(CB Richard Ellis) Tamás Sellyey (Indotek) and Crow (Capital Growth Solutions Supporting and Viktória Magyar (King Sturge) Gábor Onczay(DTZ) Ltd.) and Tom Kimber (KPMG) partner 2011

Poland

May 19

June 15 Marcin Purgal, Małgorzata Ola Biesiadecka, Tomasz Beata Nowakowska and Gadomska (Savills) and Colin Kasperowicz and Krzysztof Dariusz Wypyski (XPLAN) Waddell (CB Richard Ellis) Kienorow (Colliers International) September 15

October 20

November 17 Emilia Szyszka, Marta Tęsiorowska (Prologis), Marek Skrzydlak Bartosz Mierzwiak (Prologis ), (Cushman & Wakefield) and Philip Evison (Evison & Co) Tomasz Puch (Jones Lang LaSalle) December 15 Luiza Wasiuk (CB Richard Ellis) and David Yearn (First Title) and Ben Bannatyne (Prologis)

Romania

June 16

July 14 Charalampos Giacandis, Anca Irina Gheorghe and Victor Petcu (Bank of Cyprus) and David Andrei Vacru (JLL) and Oana Croitoru (Gardiner & Theobald) Vijiala (AFI Europe) Hayward, Nicolae Kovacs (DPGS) September 23

October

November

Sorin Huidu (Appraisal & Valuation) David Howard (DPGS) speaking Dinu Patriciu and Ioana Momiceanu (DPGS) December 78 CIJ Archive

2006 These aren’t natural progressions though … The first of these are the Motokov building, an older EVEN MORE Absolutely not - it’s the money driving them. multi-story office building where countless multina- CASH HEADED Normally the opportunist developers will arrive tionals began their Czech activities. FOR REAL somewhere and then the capital follows. These days But it’s the second building which has always been ESTATE it’s the other way around. Look at Sofia or Ukraine - seen as the heart of the project, and according to MARKETS the product has been built for international investors, many the key to the development of commercial not for the local economy. The question is whether property in Prague 4. this is sustainable. With the purchase of Metropolitan in March, German fund Degi became the first to pay under 6 percent in 2001 1996 Central Europe. CiJ spoke with the investor’s head of ECM PUTS HEART BREWERY TO strategy and research: Tomas Beyerle, about where OF PRAGUE 4 ON BECOME OFFICE the Polish market is heading and the next moves for DRAWING BOARD SPACE the company.

You’ve just dropped out of the race to buy Trinity I from Ghelamco? Jones Lang Wootton is selling a former brewery We decided not to pursue it. It wasn’t a decision One of the key areas to Prague 4’s development has complex owned by Prazsky Pivovary in Prague 3 against more investment in Warsaw, but much more long been the country’s tallest building, the old Czech which they are promoting as potential office space. a decision based on our intention to complete a Radio building. In order to create as much value as The owner has decided to sell the property without transaction in Bucharest within the next two or three possible, the developer ECM has bought property permits in place and David Neil claims to have sev- months. There are very few core products in that city around the building and made an agreement with eral parties with an asking price of around KC 120 that are not in the hands of the Austrians. ECE to co-develop the retail component of this enor- million. Built around the turn of the century, the pri- mous project. mary draw is a five floor malting building with two Where are the opportunist markets for Degi? Perhaps the most ambitious development project on underground levels that could be used for Moscow and Ukraine, Bucharest, Sophia, and down the Czech market today is City, the new name for shopping.”There have been a rash of investors com- through the Balkans to Athens and Turkey. The pace what used to be referred to as the Czech radio building into the marketplace,” said Neil. “I personally appears to be picking up in the next EU entrants. ing. Located on top of the C line Pankrac metro stop, think it is the low yields in Germany, but now Austria While CE has evolved to the point it’s at now in the project involves a huge piece of land bordered by is starting to see their yields go down so I think around ten years, people speak of them taking just five streets and two existing buildings that sit upon it. they’re beginning to turn towards here in order to five. boost their portfolios average yield.”

MITZI LINKA October 20 Things may be hot in Warsaw these ting that the buyer, Inverness & Co., rything including sheds” got to be a days (and we don’t mean the weather), is looking to help give the investment bit too much? There’s been less fallout CEDEM but as predicted, the glow of the fire market a bit of non-CPI CPR from out- so far from the Big Merger than might CIJ Marketing Awards PL September 21 & 22 is finally reaching Prague as well. The side CR. Future drama could even be have been expected, though one September 13 3B’s will have to wait for confidence on the way from the same source. We office head did beat a hasty path over to seep further south by the looks of are quite curious to hear what’s happe- to Creepy Eye. And you never know it, though with the PIGS deterioration ned to a CEE sales director we suspect what the lure of London lately, it’s hard to predict what’s co- of reading this column, so we hope might do ming next. But if Angel has gone at a the coffee invite is consumated soon. to some. sporting price, it’s even more interes- Maybe the switch from all-resi to “eve- October 20

CEDEM CIJ Marketing Awards PL September 21 & 22 September 13 Bratislava office: we have moved!

REAL ESTATE

We are pleased to have moved office in Bratislava to the following address

Eurovea Central 2 Pribinova 6

CORPORATE / M&A 811 09 Bratislava ANTITRUST / REGULATORY Telephone: +421 2 2051 0233

Here at Wilson & Partners, we build on our strengths, making sure that every addition is as good as the rest. We believe this is the way to create a law firm that that is built to last.

BANKING & FINANCE www.wilsonscee.com