Exceptional in the new normal

Magda Rachwald, ‘Eurobuild CEE’: We are currently living in very unpredictable times. Is it even possible to devise any kind of long-term strategy for the real estate market in such a situation?

Jacek Kostrzewski, the managing director and member of the board of Gleeds Polska: We are living in a world known as ‘the new normal’ or ‘normal 2.0’. Planning ahead is a lot harder now and we need an understanding of the business environment we operate in to come up with a winning strategy – and we have to be prepared to adapt flexibly to the constant changes that the market is going through. At Gleeds, our biggest asset is our people. We depend on them and we are doing everything we can to ensure that there is the right atmosphere in the company for them to combine their career goals with carrying out their work and thus realising their ambitions. The last few years, which have been marked by the pandemic and the war in Ukraine, have shown that events can occur that we would not have dared to predict. We weren’t prepared for them, but nonetheless I think that we have personally coped extremely well due to our flexibility and the cohesion of our team. For example, it was on a Friday back in 2020 that a national state of pandemic was declared, and on the very next Monday we began to work remotely – except for, of course, those people who were involved in working directly on our clients’ construction sites. Another example of this adaptability has been our ability to maintain an office in Kyiv and retain our Ukrainian Gleeds team, who, despite the country’s predicament, have been assured that they can keep their jobs.

Which market sectors are now providing you with the most work?

Last year we took on around 300 projects of different scales involving different services, including project management, cost management, inspection and supervision, construction management, health and safety, bank supervision, TDD and EDD audits, conflict resolution, ESG services, and other consultancy work. Despite all the changes in the office market, we have never been so busy with such a large number of projects from this sector – including new constructions and refurbishments, arrangements and rearrangements as well as the revitalisation of entire swathes of the urban landscape. Last year, offices were the second highest sector on the list in terms of generating the company’s revenues, and this is probably set to continue for the rest of 2024. Logistics has consistently been the highest revenue-generator for a number of years, which is also because we have been working with the global leader in this sector since 2014. Returning to the office market, we are currently involved in a few office projects in Warsaw as well as in Wrocław, Katowice, Kraków and the Tricity. Another key sector that is rapidly growing is data centres, which we are also very engaged with. For many years, we have taken an active role in developing high-quality buildings for offices and apartments. We supported the development of Złota 44 and The Cosmopolitan residential projects in Warsaw city centre, and right now we are also involved in the Towarowa Towers project. It’s also worth mentioning that we are supporting Foster & Partners together with our colleagues from Gleeds UK in the cost management for the design work of the CPK airport megaproject in central Poland.

New ESG requirements are being imposed all the time on the sector. How are you able to fit ESG and its requirements into each budget?

Across the EU, real estate accounts for around 40 pct of all energy used and 36 pct of greenhouse gas emissions. Most of this results from building usage and only a few percent is attributable to property development. Even if green solutions inflate a project’s budget, when you take into account the fact that such costs will eventually reduce the energy consumption of the building the overall balance is certainly going to be positive. You also need to consider the social and the climate benefits. Investors who understand and care about how attractive their product is tend to exhibit a great deal of awareness and involvement. If a building fails to meet its specifications and its running costs rise, its value is going to fall over time. The 55 pct reduction in greenhouse gases by 2030 pct mandated by the EU is a real challenge and will possibly not be the last one we have to face. Last year, the COP climate summit in Dubai saw the launch of The Buildings Breakthrough initiative, which has set a goal of achieving an emissions standard of almost zero by 2030. A total of 28 countries signed the understanding, including China, although Poland has declined to do so. This could possibly change and would mean even more regulations.

Many of these regulations are aimed at eliminating greenwashing while imposing reporting requirements on companies. Has your company been seeing more demand for services related to this?

Yes, these changes are also being reflected in our commissions. For some years now, we have offered multi-criteria certification and environmental audits for buildings, but now we also offer ESG services. Counteracting greenwashing is crucial for each business so that it can demonstrate an approach that has real effects, such as on the building site. Most fields covered by ESG have been understood and acted upon by our industry for many years – for example, health and safety, which is covered by the letter ‘S’ in ESG. Even when inspectors are only responsible for the quality of the work, they cannot ignore any lapses in the health and safety or environmental protocols, because how they respond is dictated by their professional ethics. It’s worth mentioning that since last year we’ve been seeing a rise in the demand for health and safety services in comparison to previous years.

Construction tech continues to develop all the time, including AI. Do you use this at Gleeds or are you planning to start doing so?

More than two years ago, the Gleeds Digital team was established in the UK and tasked with developing digital and smart solutions for the construction market. Its work is being carried out in seven areas, including the creation of intelligent benchmarks based on our databases, calculating the value of our projects, and developing decarbonisation solutions. Gleeds is also involved in work involving Digital Twins, that is, data models of buildings, their systems and their processes in virtual reality. At Gleeds we have a global policy on how we use AI – we take the utmost care to secure data even without applicable copyright laws. But we are aware that if we don’t employ AI, we will lose our competitive edge. And it’s important not to implement modern solutions in an uncritical manner, but rather with care and imagination. I believe that artificial intelligence has the potential to streamline time-consuming work to make us more efficient and effective, but at the same time it could lead to mistakes being made. AI will make our work easier, but it won’t be able to do our thinking for us.

Graham Harle, the CEO of Gleeds, is of the view that this year it is the elections that will be held in many countries that are going to point the way forward, including for national parliaments, the European Parliament, local authorities and presidencies. In what ways will politics, both global and local, potentially shape the years ahead for real estate?

The real estate market does not exist in a vacuum and, as I mentioned at the beginning, we live in the world of the new normal – and this means geopolitical uncertainty. The results of all of these elections will determine later political events and will have the effect of changing both the macro- and micro-economic environment. I haven’t got a crystal ball so I don’t know for certain what the impact will be on our own market, but I’m convinced that no matter what the future brings we must stay flexible. Over the last few years, we’ve seen extreme events unfold before our eyes, so I believe that we shouldn’t rule out anything about the future.

Gleeds won the Technical Consultancy of the Year at the Eurobuild Awards last year and has won many other accolades. What has made you such a winner and able to keep your clients’ trust?

The construction industry is a demanding sector, so we are all the more delighted to have received this reward – and not for the first time. But this also provides us with an added challenge, because we would, after all, like to win every year [laughs]. One of the key pillars of our strategy is to always put the customer first, to build up their trust and build relationships – not only at the director- to-director level, but at all levels of the company. At Gleeds we approach other companies’ projects as if we were developing our own, and I think this is exactly what our clients appreciate. It is sometimes difficult to be an independent consultant, because when personalities clash and when both deadlines and budgets are tight, it can often be extremely stressful. Many factors are outside of our control and we have to adjust to them – such as the construction worker churn due to emigration, the financial problems related to inflation, and project design changes.

You’ve been working for Gleeds for over 25 years. In what ways is the company different now from how it was then?

When I started working at Gleeds in 1997 as an assistant project manager, the company had less than 20 personnel, but now our team now has over 150 full-time employees plus a further 50 subcontractors. We now offer our services in 7 Polish locations: Warsaw, Kraków, Łódź, Katowice, Poznań, Wrocław and the Tricity. Gleeds Polska is the largest branch of the company in the EU and around half of its team is made up of women. Furthermore, we all differ in age, experience, position and specialisation. This combination of so many points of view and competencies pays off, enabling knowledge to be exchanged and for us to better adapt to the market conditions. We nurture our talent and are also able to build long-term relationships with our employees. My colleagues are the living proof of this, some of whom have worked here for over 15 to 20 years [laughs]. But we are also open to the needs of the younger generation and are aware that Generation Z, which is now entering the job market, has completely different needs to (for example) mine. I feel that it’s important that all our employees feel secure with us and don’t have to worry about their futures and that of their families – and that’s why we don’t employ people on a project basis, but instead take them into our team and give them the opportunity to further their careers and gain experience in different sectors. We are also able to provide for new needs, and have offered hybrid work for many years whenever the specifics of the post allow for it. Along with professional development, I also think it’s important to support social initiatives; so we hold company charity events and have supported Szlachetna Paczka for many years. In this way we can do something good for those in need while also strengthening the feeling that our own team is a community. I want to create a work environment and culture that people want to work in and can feel professionally fulfilled, so that we can develop both as individuals and as a firm. In other words, a company that other people want to be a part of.

Strategic mastermind

Jacek Kostrzewski is the managing director of Gleeds Polska and the board member responsible for shaping the company’s strategy, managing its operations, and its further development on the Polish market in terms of current and new services and sectors. Jacek has been employed by Gleeds Polska for over 25 years. He graduated from the faculty of civil engineering at the Warsaw University of Technology and received an MBA from the Warsaw School of Economics and the Carlson School of Management at the University of Minnesota. He has completed several postgraduate courses, including at the Ican Institute as well as the London School of Economics.