Big and now even bigger

CPI this year acquired a majority stake in Immofinanz. How has this changed the company’s operations and strategy?

Barbara Topolska, country manager, CPI Property Group Poland: With the acquisition of almost 77 pct of Immofinanz’s shares, CPIPG has become the asset manager of two property portfolios – CPIPG and Immofinanz. As a result of this change, we now manage 49 assets in Poland, with a total area of 760,000 sqm and a value of EUR 2.2 bln. We have strengthened our leading position on the Warsaw office real estate market, where we own 24 buildings in the most attractive central locations. Our retail portfolio now consists of 23 facilities with a combined area of over 260,000 sqm, including 17 Stop Shop and City Market retail parks. We have also gained strong and recognisable brands: Myhive in the office sector as well as the Stop Shop and Vivo! shopping centre chains. All of this fits perfectly into our group’s development strategy for Poland, the overriding objective of which is to constantly increase the value of the assets we manage. A single team has been established to handle both portfolios and is responsible for the local implementation of all our business objectives.

You are now one of the biggest players in Europe. What are your plans now?

CPI Property Group is currently the sixth largest owner of commercial real estate in Europe. The group has entered new markets, significantly expanding the scope of its activities. In Poland, we are focusing on introducing our own property management model for all of the properties in Immofinanz’s portfolio. This will allow us to uniformly implement standards, both in management and when building relationships with current and future tenants. In the office segment, we plan to develop the Myhive brand, as well as to introduce new solutions in the buildings owned by CPIPG. Having seen the growing interest in serviced offices, we will benefit from having the premium Myoffice model that Immofinanz has been developing since 2021. Thanks to our broad and diversified portfolio of retail properties, we have gained access to a much larger group of tenants, to whom we can now offer a variety of formats, including operational opportunities in our two popular retail park chains – City Market and Stop Shop, which are located in 21 Polish cities. Strengthening relationships to expand the reach of these brands is one of our main objectives in this segment.

You are about to celebrate your fourth year at CPI. What has been the most important event for you during this time?

When I started at CPIPG, I was managing a small portfolio and team. Each year has seen significant growth for the company. At one point we even realised that we were growing so fast that the market couldn’t keep up with these changes and so we were constantly explaining to our partners who we were and what our goals were. Among the transactions that have taken place, I can point to two key developments that have made a difference to CPIPG’s position in Poland. The first was the implementation of a EUR 800 mln investment strategy announced in autumn 2019. Thanks to this, in just a few months CPIPG became the owner of 14 high-end office buildings in Warsaw and the leader on the capital’s office real estate market. Since finishing that project, we have focused on introducing our owner-management model, which we strongly believe in – the results of which were already visible after the first month of its implementation. At the same time, we expanded the team to almost 100 people. The second, extremely important, event was the purchase of the Immofinanz stake, which gave us a new development perspective, two property portfolios and an even bigger team. However, another notable event, which completely changed the way we look at the future of this business, was undoubtedly the pandemic. Overnight, all long-term strategies suddenly became redundant. Since then, we have learned to react even faster and more effectively, and if we plan, we do so for the short-term and we use short-term scenarios, which in the current economic situation is equally useful and effective.

The current inflation and the war have put a few spanners in the works. What do you think the future holds for real estate?

The current market uncertainty reinforces my belief in preparing for various short-term scenarios. The way to survive difficult times is always to achieve the right portfolio diversification, and CPIPG has developed such a model. That’s why, despite everything, I’m an optimist. We already know that 2023 – and maybe even 2024 – will mark a slowdown in the activity of developers. But thanks to the diversification of our portfolio, we have many assets to play with. We can offer strong brands, excellent locations, diverse products and formats that have already proven themselves in tough times. This is not the first real estate crisis we have been through, although it’s one of the most serious. I believe that this is the best time to test the skills we’ve developed, our knowledge and our relationships on the market. I believe that this crisis is also an opportunity to organise and strengthen our portfolio. In general terms, I’m optimistic about the decisive shift towards ESG across the market. The capital that will be generated from this will represent immense added value for corporations. And this is not only because there are short-term benefits that can be achieved in the fields of eco-management and (above all) energy efficiency. It’s also because it will lead to a permanent transition to a certain philosophy when it comes to thinking and acting, which – even if this only happens as climate change and evolving social needs become increasingly pressing issues – is nevertheless going to have a positive impact on all our futures.

Interview: Anna Korólczyk-Lewandowska