A parachute handy
Sven Von der Heyden, founder and head of the Von der Heyden Group, might like taking risky business decisions but he always tries to ensure he has a soft landing
You often say that you "love" your buildings. Are
you really so emotional about them?
- On the one hand it's cold numbers, but on the other I am genuinely emotional
about them. And those who treat their buildings a little bit more fondly are in
the long run more successful. Every building is unique. If people can fall in
love with their standardised cars, why can't they fall in love with their unique
buildings?
You currently have sixteen people working with you in your
Warsaw and Poznań offices. How did you choose them?
-In person. Sometimes I make very weird decisions when I just like somebody and
believe in their potential. It can happen that I take people on without knowing
where I will put them.
What makes you confident about your choices?
- Loyalty, openness, modern thinking, discipline - these are things I like. When
I find them in someone it helps me make a quick decision. For instance last
December I met somebody for the first time, took a look at his CV, had a short
interview and employed him straight away. I am very intuitive about these things
and the fact that we have close to no fluctuation speaks for itself.
So you like to take risks?
- Of course, otherwise I wouldn't be an entrepreneur, but my risks are
controlled. I always have a parachute with me...
One or two?
- Maybe only one, but I make sure it's there. I know plenty of people who don't
have even a line leading to the parachute. However entrepreneurial I am, I am
still quite conservative.
Do you have a particular way of doing business?
- Definitely. I always encourage my people to be honest and question everything,
even their own work. Of course when you are in business you sometimes have to
keep your cards close to your chest in order to achieve your goals, but on the
other hand when it comes to material issues we are always honest and never
deceive anybody.
You say your company is honest, but there are others which
aren't. How do you do business with them?
- When we meet somebody who is a very shrewd tactician we are of course not
stupid. We don't go running onto drawn daggers. But what I have learnt in
business is that if you are honest, even to somebody who is perceived as not so
honest, or maybe a shark, when you approach people in the right way, your
chances of cutting a deal even with somebody like this are far greater. At the
end of the day we are all human beings. The market is already difficult enough
and it is better to just cut through the nonsense and get to the point.
Have you ever regretted being honest?
- Yes of course. Once a contractor at Grand Hotel Lublinianka (our hotel in
Lublin) took advantage of our openness, fairness and straight talking. That cost
my people and me an enormous number of headaches and problems. But this is
business and after such experiences you become stronger and learn that maybe
next time it's best to talk to a lawyer first. Privately, I have also regretted
honesty. I have sometimes helped people by giving them for example private loans,
because I felt they really needed them and I trusted them. In most of these
cases the trust was luckily paid back. I have also been disappointed, because
some people simply never intended doing what they told you. I think this is part
of life and one should not be distracted from one's principles just because one
person takes advantage of you
You have been in Poland for almost 13 years. What major
changes in the market have you observed?
- From the beginning for me it was very easy to do business in Poland. I am
quite an emotional and open person and Polish people are rather similar. It is
also the reason why I live in Spain. I just get on better with such people than
with German "technocrats", though I appreciate the German way of doing
business - which is in fact very straight, very correct and precise. I
appreciate this "German way of being" now more, living in Spain and
doing business in Poland and sometimes, I even really miss it. My approach has
been reinforced however, because working like that with Polish people has turned
out to be a good way of doing things. If you treat Polish people honestly and
straight-forwardly, you mostly get the same back. What has changed during last
12 years...? Of course Poland is now a very professional market. I like the
ambition of Poles and this is what really makes me like being here. Somehow I
feel that people are getting younger, but maybe this is only a reflection of me
getting older (laughs). The new Poland is open, well educated, speaks languages
and has a vision for its country. People are patriots, but not nationalists,
which I also like very much.
What would be your advice to any company about to start
operating on the Polish real estate market?
- Don't believe everything you are offered and told, because there are many
professors around to tell you they know everything. Be critical, have a good
lawyer on your side and concentrate on professionals and pay well for the
service you receive. Don't go into complicated deals. I think this is the best
way to start. Once you are established you may start looking at "smarter"
or more complex transactions.
At the beginning of June, Liberty Corner opened. The
development of this building took more time than you had anticipated.
- It was not due to construction, but to the problems our joint-venture partner
had with contributing the site to the company. We also had trouble at the
beginning with the state conservator of monuments, who at the end of the day
liked our concept. >From the outset our target for completion was March (but
it was three years ago before we even got the land!) but it opened on June 1st.
Who made up the name of the building "Liberty Corner"?
[the communist censorship headquarters used to stand on the same plot]
- Me in a discussion with our team.
Why did you choose that name?
- Because we knocked down the censorship office, a building many Poles had
traumatic experiences with.
How is it going with leasing out the space in the building?
- Apart from our group, Knight Frank is moving there and we are talking to a
couple of law firms, but we have not yet marketed the building with full steam,
because we did not want to be caught out by a useless price war with other
landlords, with only some concrete slabs to show. Tenants have to see the final
result in order to see the quality of the bulding and our attention to detail.
Only then do you have a valid argument for asking for relatively high rents in a
difficult market. I am positive that we can find one or two top companies to
take it as their new corporate headquarters over the next 6-9 months.
You seem to be very close to Knight Frank - when people
think "Von der Heyden", they also think "Knight Frank". Why
is that?
- I always say you should not change a winning team. But it always good to have
fresh blood, so I happily co-operate with other agents - Knight Frank have no
exclusivity. And don't believe those funny stories that I have shares in KF! I
don't have a single dollar share in KF Nieruchomości because I would not get
the independent advise we need and we have had for the last 6 years!
But KF is moving to your building!
- We did not give them the cheapest rates and vice versa. But they chose it
because they liked it. It was a purely business decision. Of course I'd have
been very sad if they went to another building but it wouldn't have damaged our
relationship. But I'd have a strong word with Joe Borowski..(smiles) [the
Vice-president of KFN]
Apart from Liberty Corner, agents are looking for tenants
for your Nowogrodzka building in Warsaw. I understand that before you "let"
PwC move out of there you did some calculations, but did you expect the building
to be empty for three months?
- The transaction with PwC was very complex and there were many parties to the
deal. We had obviously counted on an even longer void period and anything else
would have been wishful thinking. However, looking at the deal from today's
perspective, we could have had a much easier life by not letting PwC go and
insisting on the term of the lease. But I believe that having blocked the deal,
which we could have done, would have been unethical. I hope that our way of
dealing with this matter has helped recent developments a lot, though I can't
tell you exactly what I am referring to...
Office and hotels - which projects are more profitable and
exciting? It seems to me that you like the hotel business more. Am I right?
- That's a difficult one. I love hotels, knowing that they are more complex and
maybe less profitable than offices at the end of the day. Am I a masochist or do
I have "developers' disease" because of that? Certainly not! The hotel
business is a business I love. I get the chance to see the best hotels in the
world when travelling and I simply bring back so many ideas that I cannot resist
implementing them "somewhere". So what is better than building hotels?
