Architects of a real estate revolution

How has the architect’s role changed over the last thirty years or so?

Ewa Kawulok-Matkowska, managing director, Ozone Architekci: In the past, the architect was above all responsible for the aesthetics and the technical solutions of a building – that image most people have of an architect as someone who just draws designs. Nowadays, architects spend most of their time completing the legal documentation for projects and ensuring their technical feasibility to meet the expectations of developers and the requirements of tenants. These days their role in an investment is more about advising on the technical and economic aspects of the project. This is particularly true of commercial projects, including retail projects. In retail, changes to the leasing in the future, spatial adjustments to meet tenants’ needs and the future running cost reductions for a building all depend on how well a project has been worked out. The clients have to be fully informed before they can make considered decisions and, to a large extent, it is the architectural team that provides them with that knowledge. For this reason, our role is to advise the client not only on purely technical issues but also in creating such a final product that will be competitive both for the manager and for the developer. Sometimes it seems to me that designing a shopping centre means formulating a strategy together with the client’s team to achieve the business goals that have been set.

Is the work of an architect the same for every type of project?

Certainly not. When it comes to the design of retail buildings, this role is very broad and requires a lot of experience. Retail buildings, depending on their type, also abide by their own rules. This can be seen with shopping centres, which need certain visual elements to be displayed correctly as well as having the right passageways within the building, even though the trends in this respect are changing. Once the internal passageways dominated the design, but now we are clearly moving away from this, as comfort and ease of access become more important. Shoppers have to feel that they themselves are choosing where they walk around the building, even though this is something that they have been deliberately if intuitively directed to do. Along with the visual information displayed, interactive devices have today become standard and they work using all available means to ensure that the journey through a retail building is experienced through all the senses. New types of retail buildings are appearing, such as malls with internal shopping galleries combined with retail parks, while themed services are playing a bigger role and common areas are becoming more attractive. Architects have to know the standards required by certain tenants when it comes to designing a mall and fitting the eventual tenants into that particular centre. They have to ensure that the tenant’s plans are coordinated within the design. A designer will often fulfil the terms of a leasing contract through working with the investor’s leasing team, which doesn’t happen so often with other project types.

Well, don’t legal requirements form a large part of an architect’s job?

I would say that at least in Poland they are more important than drawing up the design and certainly more difficult. Over the last two years, lawmakers have been making constant changes to the construction and technical regulations and implementing EU law, so designers have to keep up and hope that the bodies that grant the permits are doing the same. We like to joke in our team that our job is more like working in a law firm than an architectural studio. At Ozone, we use advanced legal database tools as standard in our design work. Our clients often expect us to do the analyses and to provide our opinions on the construction law or other aspects of the investment. Moreover, we have to keep up with and often propose legal solutions, such as changes in companies, since these can play a crucial role in how we obtain decisions and approvals.

What do you, as architects, feel are the most important recent changes influencing the design of retail buildings?

Firstly, Covid. No one can pretend that it hasn’t resulted in major changes to the retail market. The reports for this segment clearly show this and they certainly say more about developers. Now we are quite clearly in a tenant’s market. We were granted several permits to construct retail buildings during the lockdown, which was thankfully a success, but I have to admit that it wasn’t easy, mainly because of social distancing, which affected contact with local authorities and administrators for utilities. The second change has been the number of renovations. The changes in the market have meant that centres, and especially those that are 15 to 20 years old, have ceased to be competitive and often don’t comply with the current regulations. Despite this, they often have something that is very hard to get for a new centre – a great location. Both of these factors have had an influence on the desire of new tenants to move in or relocate, especially when it comes to the big chains. And this is why our portfolio has seen more and more refurbishments of existing shopping centres. These older centres require either a face-lift or to be completely reconstructed for the leasable space to be competitive. We once had to redesign a centre with an internal shopping gallery to convert it into a retail park, as its original format no longer functioned in that location. Thirdly, there is the climate crisis. The EU Green Deal and the roadmap to sustainable development are now not such an ambitious challenge when compared to what the market is asking of us. The unstable nature of energy supplies and the desperate search for other sources have also shed new light on previous investment decisions.

What are the practical consequences of the EU Green Deal for the design and construction sectors?

The sustainable development ethos has for several years been imposing new requirements and goals and has been having a huge impact on our field. Investors have for many years been motivated to make the shift to energy-efficient buildings using increasingly advanced technology and, above all, to be aware of how their decisions are going to shape the actual form of their future investments. This motivation can be rather pragmatic as the economic effects certainly justify the costs of the investment. But sometimes it is also prompted by the need to comply with the current legislation, but the guidelines for this are somewhat random. Under such circumstances, we undertake comprehensive energy studies and together with the investor consider how to guarantee the expected return for the necessary investment outlay.

Is the current pace of legal change helping the investment climate?

It is no secret that the legislative changes are not keeping up with the changes in the market. One example is the legislation that regulates the generation of electricity from solar panels, which is particularly important as they are becoming more common in commercial buildings. Investors need a clear legal environment when they take investment decisions for many years into the future, both when they undertake new ventures and modernise existing businesses. Legal uncertainty is today a constant in the design process and our job is to minimise the resulting risks, which is why having a legal strategy has become a permanent part of each one of our projects. Returning to the topic of the climate, one interesting development is the use of such areas of a project as the roof or the car park as a solar farm. They can only become a real part of the project as long as the generation of electricity has a stable legal framework, but at the moment this remains beyond the scope of the regulations.

What do you think the prospects will be over the coming few years?

I think that it’s difficult to predict anything right now, but it’s safe to say that being sensitive to the changing dynamics will be the main factor in the success of any investment. Over the last two years, huge unbalanced needs have arisen, such as in logistics and the permanent change in sales to direct channels. All of this for sure means that the times ahead of us will be interesting. But on a more serious point, we are standing on the brink of a major energy leap for our civilisation and its scale will not just shape the investment landscape but also our actions. The current destabilisation of the energy market will only accelerate the inevitable changes ahead. The design sector has always reacted proactively to change and today we are also ready to set out a responsible direction while standing beside our investors.