What success can you point to from last year, and what are your plans for this year?
One of our most important objectives is maintaining the high quality and condition of the existing portfolio, both in the office and retail markets. Here the big drivers are sustainable solutions that optimize costs and energy consumption, and flexible spaces. We work on these factors constantly and five of our Budapest buildings have gained BREEAM-In-Use certification. This plays an important part in retaining our competitiveness.
Clearly tenants want to have their office in an efficient and environmentally sustainable building, and these are important features when choosing a property. Naturally we will continue to meet this need as we roll out further refurbishments, and gain BREEAM certification for more properties.
Has the market confirmed this idea?
We can measure the success of these actions by the fact that we’re attracting a high number of new leases, and also retaining and prolonging existing tenant leases. I think that’s an assured mark of us doing things right.
This success is not only driven by the ‘boom’ in real estate – it is rather our commitment, effort and relationship maintenance that is paying off. We are committed to the highest service levels, doing our best to satisfy client demands, and keeping the relationship with our tenants. Looking at these facts, we managed to finalize new leases at the office segment covering more than 21,000 sqm of GLA, and of course, we are also proud of prolongations exceeding this level.
Another part of the story is the rollout of our new international office concept, called myhive which is a major initiative for IMMOFINANZ this year. In the first step of the brand’s roll-out we’re bringing the myhive brand to 20 IMMOFINANZ office buildings in six countries: Austria, Germany, Czech Republic, Poland, Romania and Hungary. We are delighted that five of the office buildings in our local portfolio have been selected for the implementation of the myhive brand.
You are a major player not only in the office market, but also in the retail industry.
On the retail parks front we acquired two retail parks in Hatvan and Szolnok at the end of last year, and these are being rebranded as our STOP SHOP retail parks. We’re growing the STOP SHOP brand iin Hungary to 14 locations with 128,000 sqm of rentable space, and in addition we have extended STOP SHOP in Gödöllő, where we’ve developed an additional 300 sqm for KFC. Overall we already have nearly 70 STOP SHOPs in eight countries.
How long do you think lease fees can continue to rise while there is a declining vacancy rate?
In a year - or a maximum of 18 months - we will see significant new demand, so this will undoubtedly increase competition. It is true that we see signs of increasing rents, nevertheless any increase is modest. So, from our perspective, the increase of offers in the local office market is a very good sign, and it’s a response to the growing demand and the development of the local economy. We have positioned ourselves optimal in order to benefit from the development: Our tenants and their employees get a complete package – great buildings, excellent social areas, and environmentally sound and efficient infrastructure.
How has the structure of demand changed in the last couple of years?
The strengthening of ties with current tenants and the attraction of new tenants, as well as the optimisation of our offering, are the focal point for our operating business. Our offering covers location and infrastructure, through to flexible uses and a wide range of services. What this means is that we are always focused on our tenants and their employees by providing environmentally and socially attractive buildings.
Does the myhive concept fit in this approach?
Look at any of our refurbishments and you’ll see significantly improved environmental features and social areas. The myhive concept takes this even further with a definite ‘feelgood factor’ which comes from a hybrid sense of work-meets-play. People make less and less distinction between work and leisure activities, so as the two become more and more blended, we believe that tenants and employees need their workplace to reflect this. myhive does exactly this by creating a new hybrid form of environment, actually somewhere between a hotel and an office.
So, it’s true to say that there are different demands which have come up in the last few years, and we are anticipating and meeting this. At the same time, we are actually creating new offerings which we believe will help drive further demand.
What do you expect from the new international office concept, the so-called myhive?
myhive is our new international office brand, which has been implemented in five of the IMMOFINANZ office buildings in Budapest. Greenpoint 7, Haller Gardens and Atrium Park are already re-branded as myhive Greenpoint 7, myhive Haller Gardens and myhive Atrium Park. The transformation process means that the common areas of the properties now offer an extended service and improved infrastructure, all of which helps to encourage socialisation.
The myhive concept has four main characteristics, which underpin its core benefits. These are: hotel-inspired design, attentive service, versatile infrastructure and an international community.
The heart of the concept is the lobby, which brings to mind the comfort and design elements of a hotel lobby. As I’ve already mentioned, we know that the boundaries between work and leisure have never been so blurred, so a major goal has been to create a comfortable setting for both worlds to meet.
This friendly atmosphere in common areas encourages myhive members to mix with other members and their guests, so that every myhive participant is part of an ‘International community’ and can use the network for both private and business purposes.
What does that mean in terms of tenant retention?
Well, happy employee equal happy tenant. Who wouldn’t want to work – and relax – in a state-of-the-art, comfortable, high-concept designed place? I believe our positioning of myhive in the market is the right thing at the right time. It’s new and it’s different, and above all, it works. Come into any myhive site and you’ll see productive people, enjoying the work they do in an environmentally sound building. It’s exactly what the market is asking for, and it’s exactly what IMMOFINANZ is supplying.