Facelifts sometimes work
To what extent does packaging influence our purchases? A lot,
it would seem. Owners of old office buildings are well aware of this and aren't
reluctant
to splash out on new exteriors and installations. Are they spending their money
wisely?
Warsaw's secondary office market offers several different products: old office buildings of variable standards, post-industrial buildings adapted for office requirements and converted kamienicas (pre-second world war buildings). Once spruced up, a lot of these buildings might well turn out to be attractive options for tenants who are not too particular about the luxury they work in and who are keen on paying less than USD 15 sqm. That said however, renovated buildings occasionally become home to exclusive shops and prestigious firms.
Exploiting the potential
"This building has the potential of a well equipped Volkswagen passat and
the body of a corroded old lada," says Rafał Kwaczek of King Sturge, about
the building on Prosta 69 for which they are leasing agents. "Though the
property has plenty of assets, its exterior scares potential clients off.
Fortunately, it will be renovated this year."
"The owner decided to invest USD 1.5 mln in a completely new fauade and
modernized the air-conditioning," says Radosław Sieron of Warsaw West Gate,
which manages the building. "Prof. Andrzej Gawlikowski and Jolanta Cary
designed it and the conversion will be complete by the end of this year. We are
certain that the renovation is a good investment and it will enable us to
exploit the building's full potential."
The Copernicus investment company have been owners of the building in Prosta 69
for three years now. It is managed by Warsaw West Gate and has five tenants,
Falc, Conoco, Centertel, ESI Distribution and Unikat Nieruchomości Komercyjne,
who rent 4,200 sqm. The other 6,000 sqm is vacant. Space for common use amounts
to 8 per cent. According to its managers, another agreement with a French
company, for 1,200 sqm, will be signed soon. Rents have been set at USD 15 sqm
and service charges USD 3.5.
The non-trafficking Praga
Two neighbouring kamienicas in Warsaw's Praga district have recently undergone a
major facelift. The buildings, which stand on Okrzei 35 and Kłopotowskiego 36
belong to Przedsiębiorstwo Hotelarsko-Turystyczne (the Tourist and Hotel
Enterprise) which turned the former into a class B office building and the
latter into Hetman, a three-star hotel.
Offices have been available in the old but completely renovated kamienica on ul.
Okrzei 35 since July 2002, and 700 sqm on two floors which take up half the
building remain vacant. Rents at USD 8 sqm with a USD 2 sqm service charge,
cover a cable system, ISDN, convertible ceilings and optional air-conditioning.
Tomasz Jędrzejewski of Przedsiębiorstwo Hotelarsko-Turystyczne considers the
low rents and convenient location (Świętokrzyski bridge is nearby) to be the
building's biggest assets. "Our clients don't have problems with the
traffic, because both in the morning and in the evening they travel in opposite
directions [the morning traffic is the heaviest from the east to the west bank
of Warsaw] to the city's other commuters." The drawbacks are the rather
complicated floor layout and the lack of food outlets in the vicinity.
Top-notch
The Platan Group certainly did not have undemanding clients in mind when
renovating their Dom Dochodowy building on Warsaw's Pl. Trzech Krzyży. After
four years work and USD 18 mln cash, a luxury office building was developed with
rents set at USD 30 sqm. It's probably safe to bet that the owner was trying to
recover the investment costs with these. Money however didn't seem to be any
object for the United Bank of Switzerland or the exclusive shops, Ermenegildo
Zegna and Mariella Burani, who all leased space there. "We engaged high
class specialists in the work on the interior, and the conservator kept a close
eye on the renovation of the original ornaments," says the Platan Group's
Anna Stawny.
