Skanska Commercial Development Europe, the office developer with the largest presence in the CEE region, has summarized its 2016 performance and the year-end results couldn’t be better. The company leased almost 170,000 sqm GLA of office space in ten CEE markets. This is the best ever leasing result for the office sector of any region in the Skanska Group. This success illustrates CEE's strong position and the region's attractiveness.
After Skanska’s divestment record in 2015, last year was the time for exceptional leasing activity. With a volume of 170,000 sqm GLA leased, the company beat its own records, and has now set ambitious goals for 2017.
We had a fantastic year with many great successes and historically high leasing results in the region. It was the best year ever for our unit in Hungary – with an improving market and the impressive divestment of Nordic Light as well as record leasing activity. We also acquired impressive land plots for future investments, such as the one on ONZ roundabout in Warsaw. Almost 200,000 sqm are under construction and other projects are set to commence this year. Another important move was establishing our own investment fund management company in Poland. CEE is a great region to invest in, with fantastic potential to grow even more, and such performers as Romania, whose GDP growth of up to 5%, only confirms this positive momentum,” says Katarzyna Zawodna, President of Skanska CDE.
The strength of the Polish market
Among Skanska CDE’s four local units - Poland, Romania, the Czech Republic and Hungary – the Polish market accounted for a 50% share of leasing activity last year. So why do tenants continue to choose CEE and Skanska’s offices?
“Skanska practices a people-centric approach, providing high-class, comfortable and flexible workplaces in response to our client’s expectations. We establish close relationships with business partners and care about our company’s transparency. That’s why our company enjoys the trust of tenants and investors, who when expanding their businesses or diversifying their real estate portfolios within the region come back to us time and time again. I’m convinced that it is the quality of our sustainable offices, our high working standards, and the enormous potential of the CEE region that attracts business. With its strong economy, well-educated and talented people, and operational safety, this region is one of the best locations for FDIs and business services centers,” says Arkadiusz Rudzki, Managing Director at Skanska Property Poland.
Attracting newcomers, building relationships
Investment funds also appreciate the high standard of Skanska’s assets. In 2016, Skanska sold three buildings (two offices and a hotel) worth EUR 211m and attracted new players to the company’s markets.
“It was a great success for us to establish a new partnership with three investors. HANSAINVEST Real Assets acquired the Atrium 2 office project in Warsaw’s city center, its first investment in the Polish market. Erste Alapkezelő Zrt selected the Nordic Light office building in Budapest, and a Quatari player, Al Sraiya Holding Group, purchased the Westin Hotel in Warsaw. The quality of Skanska’s assets and favorable yields in CEE attract investors, while Skanska’s working standards and good reputation build trust. These factors definitely give us a competitive advantage over the competition in the CEE investment market,” says Adrian Karczewicz, Head of Divestments CEE at Skanska CDE.
A new investment approach and plans
Another big move for the company in 2016 was the establishment of Skanska TFI S.A., the first investment fund management company for the Skanska Group worldwide. Skanska TFI S.A. will manage a closed investment fund locating its assets directly in real estate. Skanska Group as an investor stands for the sole participant in the fund.
Additionally, the company has started five new projects in four countries with a total of 88,000 sqm GLA. The developer is working closely not only with its business partners but also with local communities in all CEE countries where it operates. By analyzing people’s needs and habits, the company is trying to fit in with the city landscape, according to its purpose “We build for a better society”. Every solution implemented in the company’s, such as LEED certifications, accessibility audits of buildings, placemaking, aims to improve the quality of life in the neighborhood, and provide an attractive, futureproof workplace.
“Our unmatched team, fantastic business partners, and a buoyant CEE region have been integral to Skanska's performance. These factors combined with focusing on delivering futureproof projects in the best locations with top-notch working conditions for people, and underpinned by Skanska’s core values have all contributed to Skanska's success. We now have 12 new projects in the pipeline. Watch for further developments, we will keep you informed,” adds Katarzyna Zawodna.