A strategic alliance

The management of GE Capital Golub Real Estate and GP Bis have come to the conclusion that rather than compete with one another, it's wiser to join forces and conquer the market together. Having signed a deal last month, the companies are going to enter property management tenders as a united force

Companies providing real estate management (including property and facility management) are well aware of the fierce competition they're up against. They are all getting in on the act: the small and the large, those with domestic and those with foreign capital, and as more companies look to place their property in good hands, the stakes are mounting. Is forming an alliance the solution?

Partner wanted
Grzegorz Pytkowski, the founder and President of GP Bis, has been searching for a partner for several months. He knew that as the big players prefer to deal with counterparts their own size, a company of Polish origin wouldn't stand a great chance of getting contracts with the international giants, despite having well-documented experience and the ISO 9001 certificate.
GP Bis were recently in negotiations with a view to forming an alliance with EC Harris, a company already well-established on the Polish market, but the deal fell through. Grzegorz Pytkowski explains: "I called it off because EC Harris treated my company like its little brother, and what we're after is partnership."
Pytkowski's other idea which received wide press coverage, was the intended sale of a portion of GP Bis shares to the American fund, Innova Capital. But this project also came to nothing. "I don't need their capital. I found another solution," says Pytkowski.

Cutting the pie together
The "other solution" turned out to be an alliance with GE Capital Golub Real Estate. GE, which is known in Poland as a developer of office buildings, such as Warsaw Financial Centre and International Business Centre, want a bigger piece of the "property management" pie too.
"We currently manage around 300,000 sqm in Eastern Europe, half of which does not belong to us," says Krzysztof Litwinski of GE Capital Golub Real Estate.
Asked to explain what prompted the international giant to do business with a relatively small Polish company, Litwinski answered that the reasons lie in the thorough market analysis they have conducted.
"We came to the conclusion that an alliance with GP Bis would be highly beneficial to our further development in this field, because the range of our services complement one another," says Litwinski. "GP Bis specialise in facility management and we are good at property management. Together we can develop an integrated and reasonably priced service."
"Our mutual product will be endorsed by an international brand which will strengthen our position in the eyes of international organisations. By 2006 we want to be the market number one. We can and will achieve this," claims Pytkowski.

Craving for Europe
Though the partners don't intend founding a separate company, they will create joint offers, compete in tenders together, select teams for individual projects and finally, share profits. "We have ambitions to conquer Central Europe working this way, but that's not the end of our aspirations," adds Pytkowski.