Tricity real estate market seen by Torus

The beginning of 2015 was marked by the preparation of reports by different companies. We have read about the Warsaw and regional markets, we have compared Poland with other countries, we have listened to the prognoses of experts about the nearest future. How does it really look like in practice?
Maciej Brożek, director for commercialization in Torus
Maciej Brożek, director for commercialization in Torus

We asked Mr. Maciej Brożek, director for commercialization in the Torus company from Tricity which is realizing a multifunctional Alchemia complex in Gdańsk, about a developer’s point of view.


The last year was really intensive for Torus when it comes to activities related to the Alchemia complex. Which event from the previous year do you consider as the most important one and why?


It is quite a difficult question. Undoubtedly, the official opening of Alchemia in January last year had a significant importance for us. It was a culmination of over a 3-year work and huge effort put in the project by the whole company. The other crucial event for us – and actually a sequence of events – was a commercialization of Alchemia. We have managed to commercialize over 90 per cent of the first stage of the investment within less than one year since the opening, which is definitely unprecedented in the history of our company. 


We can see that the year 2014 turned out to be the time full of successes for your company – a fortunate commercialization, another investment and also interesting partner projects. What are your plans for 2015? Is it going to be equally intensive?


Generally, you can say that 2015 has been already equally intensive but it may also turn out to be really decisive. At present, there is a new group of tenants on the Tricity market – that is big investors whose projects give a prospect for a single lease concerning over 5000 sq. m of office area. There has been no investment on such a scale on our market before and thus we may see that the region started to be appreciated by big players. Moreover, several large negotiations processes, the most significant of which includes over 12 000 sq. m, are being conducted at the same time. Of course, these are really technically difficult processes which require a lot of our engagement. On the other hand, we may develop faster as a company and also as a region thanks to such projects. The big investors increase the market’s attractiveness from the perspective of investment funds which are becoming more and more interested in Tricity.



How does the Tricity office market look like these days from your perspective?


Over the course of the last year, more than 70 000 sq. m have been rented in Tricity in the form of signed contracts. Furthermore, over 40 000 sq. m were rented by new investors. The data is very positive and we may now look optimistically into the future. It is important that Tricity is a stable and sustainable market. Each tenant has a choice in various classes of area for a reasonable price. On the other hand, the rate of uninhabited apartments is at a safe level for lessors. Undoubtedly, the market will be successively developing and the main driving force will be companies from the BPO/SSC, modern technologies and IT sectors.


Is the company planning an expansion to other cities? 


Actually, it is a kind of a question that we often hear because there are many people who would happily see our company in other cities. Indeed, we envisage some plans concerning going outside Tricity, however, now we cannot say any details. We are looking for some options but rather not in Warsaw.


What problems will the office market encounter in 2015 in your opinion?  


Generally, the issue of financing has been a main problem of the commercial property market for many years. The banks often require something impossible – for instance, the fact of having a half of area rented in a structure before taking a loan. On the other hand, there is also a tenant who is not going to rent area in an investment which exists only on paper. They require – and reasonably – a certain stage of advancement concerning the works. The large companies are sensible of the risk and they secure themselves by even multimillion penalties fixed by the contract in case of not delivering the office area on time. Therefore, the realization of the investment market is a major challenge and it will allow particular regions like Tricity or Poznań to quicken their development. There are some high quality buildings available on the market as well as a group of stable and still increasing tenants. However, we still need a much greater interest on the part of funds.



Is the direction of development chosen by Poland, that is mainly outsourcing, a good way for the following years in your opinion?


The option of modern services for business is a very good prospect for Poland, especially in our times. Many people are very skeptical about this sector but when we compare it with a perspective of the young generations in Spain, Italy or Greece, it would be difficult not to appreciate all we have and what we can have thanks to the BPO/SSC industry in our country. It is a new and powerful branch of economy. The services have a good place to develop in Poland because we are still cheaper than Western Europe. Moreover, we have a good work culture and much higher effectiveness in comparison to far-distant regions like China or India. At present, these are our main assets, from which we successively benefit. Furthermore, we are a stable and relatively safe country in respect of geopolitical factors, what is extremely important for the sector of services because it guarantees the realization of signed services. This sector expects a strong and stable property market as well as labor market – and Poland actually have them both. The potential of our country is much greater than in case of Romania, Czech Republic, Estonia or Slovakia, which also results from the level of education. 


We cannot also forget about the evolution in processes serviced in Poland, which usually turn themselves into more advanced ones requiring much more qualified staff. Some outsourcing centers in Poland are becoming more advanced units which often increase their competences – from simple IT services to more advanced computer programing, from simple accounting to financial analyses. It is important that the transfer of such processes to other place in the world is not so easy. Therefore, we are talking about a long development perspective of the whole market. According to estimates, this industry may increase the employment even by 20 per cent annually within the nearest years at the present level of nearly 130 thousand employees in this sector – mainly young and educated people. Therefore, this sector actually liquidates a huge gap in employment of the young generation, which still remains a big problem in other countries in Europe.


A dream tenant is…?


A dream tenant is the one who rents a large area for many years and does it in a perfect option – that is right the whole building or one of the stages of the whole investment. However, it is also important whether it is a solid company which invests in infrastructure and its resources because it signalizes that this company is stable and thinks seriously about development.



Could you name some problems related to the office market which you would definitely like to avoid?


I believe that any lessor would like to experience the lack of demand because no clients indicates that the office market is actually coming to an end. The sudden reverse of investors would be certainly a dangerous phenomenon – Poland would then suddenly cease to be an attractive place to invest. The unfair competition or price war on the office market would be definitely a negative situation too. All serious investors need a competitive but also a stable market with a development perspective.


What would you like to wish for the other quarters of 2015?


We wish ourselves at least the maintenance of our development pace and of course an effective commercialization of the second stage of Alchemia. Moreover, we would also like to finalize several big contracts on the Tricity market which will enhance not only the status of our investment but also the whole region.  


In that case, I wish you luck in the realization of tasks and future successes! Thank you very much for the conversation! 


Tags: Torus Alchemia
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