Reaching their destination

Rafał Ostrowski, ‘Eurobuild CEE’: Echo investment has gone quite a long way in the past 25 years from developing mainly residential buildings, through to office and retail projects, to building such complex and large urban developments as The Warsaw Brewery, Fuzja in Łódź and the planned Towarowa 22 complex in Warsaw. Which real estate sector do you now want to concentrate on?

Nicklas Lindberg, CEO, Echo Investment: It’s true that Echo is a developer that has competences in various real estate sectors. So, we are not only a developer of residential buildings for sale and for rent, but also of office and retail space. We can do all of these and we are always able to adjust to the market by increasing our presence in those sectors that in certain times are doing better. For example, when the company started out we were doing a lot of retail. But since then, retail has gone through a big shift and will never return to how it used to be. Now we are doing more destination retail with food and beverages, because we can clearly see the demand for this. With residential, on the other hand, it’s clear that people always will need to live somewhere and if you look at how many people there are in Poland per household compared to other markets, it still seems to be one of the most overcrowded countries in Europe. So, this is one of the reasons why we are developing our Resi4Rent platform, to follow the trends on this market.

In April 2021, Echo Investment closed the purchase of a controlling stake in Archicom – a well-established residential developer in Wrocław that sells around 1,000 apartments per year on its local market. How important is this acquisition for your development strategy?

We want Echo’s business to be roughly 60 pct residential and 40 pct commercial, so we have come closer to achieving that goal, but we are still only at the beginning of our journey to becoming the biggest residential developer in Poland. It’s also important to note that we are not going to reduce our operations in other real estate sectors as we are still focusing on the commercial development part of our business. In 2016, when we introduced our Strategy for Profitable Growth, we declared that we were going to be in the top three in all the segments in which we are active in Poland.

There is 420,000 sqm of office space currently under construction in Poland – and that’s the lowest figure in eleven years. It also tells us something about the office market after Covid-19. What’s your approach towards offices today?

We are very positive about office development. We think there are clear signs that people are coming back to offices. Of course, we have to factor in that there will be changes to how people use offices, with more demand for flexible space but also more space being used by each office worker. So, even if only 75 pct of people come back to their offices I think the amount of space needed will be roughly the same. From the developer’s view, on the other hand, the key strategy here, I think, is to distinguish your product from other offices. I think that this uniqueness is going to make a difference. A tenant looking at Warsaw Brewery is not one that would be interested in any office project. The Warsaw Brewery is so much more than just an office or residential or retail development. We have transformed a large area of Warsaw. With all its green areas, the historic buildings and the new development, it’s now a place where the future meets the past. We have put special care into preserving these historic sites that are important to their cities and at the same time give added charm to our projects.

Will we be seeing more projects similar to The Warsaw Brewery from Echo Investment?

Certainly, there will be more such projects. In fact, The Warsaw Brewery has been completed, but we are still working on another large urban destination project. That’s Fuzja in Łódź, which also includes some wonderful restorations of historic buildings, such as an old factory and a power plant. That mix of old and new and at the same time of different functions, was, I think, one of the main reasons why Fujitsu chose this complex for its new headquarters. The company is moving in next year and by then we should already have finished about half of the complex. The next big project we have planned is Towarowa in Warsaw, which will be a true mixed-use product developed on almost 7 ha site in Warsaw’s Wola district – and this we will be a natural step for us to take after the completion of The Warsaw Brewery.

When is the construction of Towarowa scheduled to start and when is it expected to be completed?

We are working at full speed on the permitting for this project. We’ll see if that happens this year or next, but as soon as we acquire the permit we will start the development. The project comprises so many different parts that at the moment it’s just too soon to plan the exact date of its completion, but if you look at how we built Warsaw Brewery in just four years that should give you some idea of how quickly we can transform parts of the urban landscape into new city centres.

And are there any other urban destination projects on the horizon?

I think our acquisition last year of the Tesco portfolio was very important for our urban projects. First we acquired a plot in Warsaw, then we bought Tesco centres in Poznań, Kraków and Łódź – and we are really turning these locations into new mixed-use destinations that are in beautiful locations in different cities. I think we seized a very good opportunity which resulted from retail market changes.

And what about your single-use projects? How are they evolving?

Of course, the majority of what we will do all over Poland will still be single-use projects, but even with these there’s always this community thinking that’s important in our projects. We make the ground floors an active part of the destination, providing those services that are very important for our customers and clients – and that’s why we have established an integrated division of Echo just to focus on these tenants.

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Nordic nous

Nicklas Lindberg was appointed CEO of Echo Investment in 2016, being responsible for the strategy and development of the company. Until 2015 Nicklas was employed by Skanska Group, where he held several top positions, such as president of Skanska Commercial Development Europe (CDE), head of Skanska Property Poland, CFO and CEO of Skanska Russia and a manager of residential development units in the Nordics. He graduated from the University of Lund in 2001.