On the Andrássy Avenue- which is part of the World Heritage – the renovation of the Krausz Palace, built in the 19th will start soon. Under the leadership of Limehouse Partners, one of the most modern and exclusive office concepts in the city center will be realized, which will preserve the patinated building for posterity along high aesthetic and comfort expectations. We asked Mr. Jake Lodge, Managing Partner of Limehouse Partners, how they are preparing for the post-virus period, what offices are in demand and why a return to offices is inevitable.
- Your company was founded in 2016 as Lodge & Partners, and was renamed for Limehouse Partners in December 2020. What are the arguments for changing the name?
- We have recently entered a very exciting phase in our enterprise growth having recently brought Benjamin Perez- Ellischewitz into the partnership to accompany both Celestin Huot-Marchand and myself. So fundamentally we have new names for our new business arrangement. Whereas previously we were pure play asset managers; now we have organically expanded our service lines to include property management, project management and capital markets. These key service lines are being provided under the Avison Young brand focusing on Hungary; whereas our Asset Management services remain under Limehouse Partners and cover the CEE region.
- Let’s focus on Krausz Palace: it is always a much more complex job to restore an old, heritage-protected building than to create a new one. What motivates you?
- Could not agree more on the increased complexity levels involved with a heritage building refurbishment, but it is a highly rewarding process. Rejuvenating a landmark building, such as Krausz Palace with its rich history, is a challenge that we relish. Our goal of creating a premium office & retail accommodation, meeting modern occupier requirements within the framework of the tangible history of Krausz Palace and its prime location, will make the project highly sought after. I am a big believer in downtown locations and, typically for Budapest, that invariably means working with protected buildings of some sort. Consequently, a successful regeneration of buildings ensures not only quality accommodations for end users but also a setting within an unbeatable location where an abundance services and amenities can be found. Aside from location I am firm believer that historical buildings have so much to offer in terms of architecture, aesthetics and as an inspirational place for work. Krausz Palace has been a landmark building since 1883 and you can be sure it will be in use for generations to come. I am not sure the same can be said for a lot of buildings constructed in more recent times.
- What are your plans in the Hungarian and international markets?
- As a principal led business my partners and I are focused on the provision of high caliber professional advice to selected clientele. Our client base values our broad and experienced background in different sectors including real estate, banking, investment & asset management through a variety of geographical regions. For the short term this means careful organic growth as we navigate the uncertainties around COVID-19. The tie in with Avison Young has opened many interesting venues for us and allows our clients to benefit from the pan-European coverage, including the CEE region i.e. Poland & Romania. As a principal led business, they share our business values, so there is a great alignment of interest. Keep a look out for further Avison Young expansions soon.
- What trends are likely to occur in the office market? Obviously we cannot avoid Covid-19...
- In our portfolio, we have not witnessed any significant impact on tenant’s demand for office space yet – if anything last year we saw an unprecedented lease-up of one of our key assets with 150% more leasing than in any recent year. Despite low office utilization, our tenants have generally been renewing their leases, but clearly, this has not been the case for all other landlords. For now, businesses are still trying to get a grip on getting the virus under control and thereafter how their organization will need to adjust. Whilst there is gradual weaning off from the current work from home setup, the most successful buildings will be those that find a niche in the post-COVID-19 world. To my mind, the most resistant buildings will be premium downtown office buildings and value proposition offices in locations with high connectivity. In all cases, it will be essential that buildings adopt virus ‘safe’ technologies and protocols. We are rolling out such solutions in our buildings, where we can.
- Vaccination and mass immunization are within reach. Are the good old days coming back? Is the market reorganizing?
- It is great that the vaccines are on their way and we all have hopes that they will be able to deal with all the virus variants. On the assumption that they expedite social and economic recovery, we firmly believe that dedicated office working environments will return in most cases, albeit with virus suppression modifications. It is an inescapable fact that we humans are social animals (to varying personal levels!) in both private and business. Successful teams thrive on social interactions and Teams or Zoom will never replace face to face meetings. We have already seen some of the leading global banking institutions confirm their preference to have people back to their offices. It has been very interesting to see how different companies have dealt with the pandemic. Undeniably office utilization has plummeted during the crises but there have been a handful of companies that have soldiered on. Generally, the large corporates have adopted a strict work from home policy, and it will be interesting to see the speed they start to trickle back to the office, as they inevitably will in the most part.
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