The bumpy road to recovery

As the economy improves, developers and investors have become more willing to explore new territory - such  was the conclusion of many who attended the Central  & Eastern Europe Office Market conference, organised by Eurobuild Conferences

The penny seems to have finally dropped that the CEE region is a broad patchwork of very different markets. For those who still have their doubts it is worth taking a glance at the numbers: while the 7 pct vacancy rate in Warsaw remains close to healthy levels, other markets, such as Sofia with a record high vacancy rate of around 30 pct, have another tough year ahead of them. Despite the generally optimistic mood at the Central & Eastern Europe Office Conference, which was held on March 29th in the  Marriott hotel in Warsaw, market players seem to have learnt their lessons and are remaining cautious. "This year the CEE region will see more investment activity. Investors are looking mostly for core products," explained Jos Tromp, the head of CEE research and consulting at CB Richard Ellis, who moderated a discussion entitled 'Reasons to be cheerful - or not'. The panel included Marcus Kuttner, CA Immo's head of asset management for the CEE, SEE and CIS regions, Tomas Picha, Invesco Real Estate's CEE director of transactions, and Jacek Wachowicz, director of leasing and sales at Globe Trade Centre. The panel were also optimistic about the long term prospects of the troubled Budapest and Bucharest markets.
Despite growing interest in other markets in the region, Poland remains the most attractive location - at least when it comes to relocating operations from Western Europe and the US. "We can't compete with countries like China and India, but we have other advantages, such as a safe political and business environment to  work in, to start with," argued Przemysław Stangierski, a partner of A.T. Kearney Polska. The 'BPO Roadmap' panel, which was dedicated to the development of outsourcing services in the  region, also featured Paweł Panczyj of Ernst & Young, Piotr Michalski, the owner of Grupa Buma, and Rafał Szajewski, the head of the BPO team at the Polish Information and Foreign Investment Agency (PAIiIZ). Poland, despite increasing labour costs, should not be worried. "Large companies are changing their attitudes - they can enter smaller cities and train their recruits," claimed Rafał Szajewski.
Companies are also changing their attitudes when it comes to office space, a trend confirmed by the increasing number of office buildings awarded with green certificates. Rondo 1 in Warsaw provides one such example, which was discussed in detail during the 'Adapting to a Green Tomorrow' case study discussion. This featured sustainability analyst Michelle Vanderdoes of Epstein, Karol Bartos of MGPA (the owner of the building), and Anna Skubis-Sobańska, the property management director of Hochtief Development Poland. Looking back on the process, which was completed in 2006, and sharing their experiences, they agreed that at the end of the day it was well worth all the effort - even though it took much longer than originally expected. "After all the changes were introduced in the building, we can now see that the tenants' awareness of these issues has also been raised," observed Anna Skubis-Sobańska.
The 'Battlefield Management' discussion involving Knight Frank's head of property management Bartłomiej Łepkowski, NAI Estate Fellows' president Rafał Mateusiak, Andrzej Mikołajczyk, the managing director of CA Immo Real Estate Management Poland and Thorsten Brüdigam, the president of HSG Zander Polska, examined the current state of the property management scene in Poland. The market players agreed that they are facing another difficult year, but Andrzej Mikołajczyk introduced a positive note into the discussion: "Yes, there is room for more players on the market and - who knows - that might even include our firm."  (MP)