Ilbau drops rates for office space in Gdynia
"The feasibility studies that were undertaken in preparation for the debt financing showed better prospects than there are right now," said Ralph Kinhirt of Creditanstalt in Austria, one of the banks financing the project. "It's simply not the right point in time."
The decrease in rents is a substantial one. Formerly the owner - Ilbau is the majority shareholder - was asking DM 47 ($31) per gross square meter. That has now been dropped to DM 26 ($17) per net square meter. This in effect means tenants will stop paying for the 40% common space.
Peter Choynowski of leasing agents Prime Property says the project was unrentable at the previous prices.
"The developer was misled through bad advice to think the market would accept these rents," Choynowski said. "After a few months of trying to lease it, they have seen it's not true."
The project comprises 5,631 square meters of rentable office space and 267 square meters of retail space (priced now at DM 30 ($20) per net square meter) located on ul. Alaska, somewhat outside the central business district.
Although the building was completed in October last year, the group is planning to open it officially next month now that rents have been readjusted.
While the Gdynia project may have been slow out of the starting gate, other Ilbau projects have done quite well, and the construction company has one of the best track records on the Polish market for the number of office projects completed. These include the LIM center, IPC business center, Atrium, and Ilmet (under construction).
Property professionals say that Ilbau has been successful despite the inefficiency of the buildings in terms of gross/net ratios.
"Space in these buildings is very expensive when you consider how much tenants have to pay for common areas," said one agent at an international property consultancy. "I just wonder if these projects will continue to be successful once the market opens up more."
Creditanstalt's Kinhirt says that while the high percentage of common space does make the building more expensive, there are tenants that are willing to pay for the added comfort.
"The design of the building depends very much on the tastes of the developer," Kinhert said. "He has to decide for the well-being of the people who are going to be working there if they will feel comfortable in a tighter atmosphere."
"I know that buildings are much more efficient in the states, but here in Austria people are used to much more space - wider corridors, larger bathrooms, etc.," he said.
As far as financing is concerned, Kinhirt says that the issue of common space doesn't enter the equation. "At the end of the day it's a question of feasibility - a building with 40% common space can be just as feasible as a building with 10%," he said. "We look only at income per net square meter and construction costs."
And the success Ilbau has had at securing financing for their other projects shows that other banks aren't concerned about the contractor's design preferences. As Kinhirt explained: "If you are number one in projects, then it's clear that people prefer your buildings."
Fibiger files charges
Elwira Fibiger, heir of the pre-war owner of the Calisia piano factory in Kalisz, has filed charges against the Ministry of Culture and Art for acting to the disadvantage of the state.
The Ministry of Culture and Art issued a decision last summer saying that the nationalization of the Calisia factory was illegal (WBJ April 7-13), thereby making Fibiger the first person eligible to receive restitution of a factory. But the ministry has done nothing to execute the decision.
Now Fibiger is fighting back.
She says the factory showed a loss of over zl. 100,000 ($41,600) in the first three months of this year. To cover this the director of the factory took out a loan using some of the factory's machinery as collateral. According to the ministry's decision, this machinery should belong to her, meaning the director had no right to take out the loan using her property as security.
The decrease in rents is a substantial one. Formerly the owner - Ilbau is the majority shareholder - was asking DM 47 ($31) per gross square meter. That has now been dropped to DM 26 ($17) per net square meter. This in effect means tenants will stop paying for the 40% common space.
Peter Choynowski of leasing agents Prime Property says the project was unrentable at the previous prices.
"The developer was misled through bad advice to think the market would accept these rents," Choynowski said. "After a few months of trying to lease it, they have seen it's not true."
The project comprises 5,631 square meters of rentable office space and 267 square meters of retail space (priced now at DM 30 ($20) per net square meter) located on ul. Alaska, somewhat outside the central business district.
Although the building was completed in October last year, the group is planning to open it officially next month now that rents have been readjusted.
While the Gdynia project may have been slow out of the starting gate, other Ilbau projects have done quite well, and the construction company has one of the best track records on the Polish market for the number of office projects completed. These include the LIM center, IPC business center, Atrium, and Ilmet (under construction).
Property professionals say that Ilbau has been successful despite the inefficiency of the buildings in terms of gross/net ratios.
"Space in these buildings is very expensive when you consider how much tenants have to pay for common areas," said one agent at an international property consultancy. "I just wonder if these projects will continue to be successful once the market opens up more."
Creditanstalt's Kinhirt says that while the high percentage of common space does make the building more expensive, there are tenants that are willing to pay for the added comfort.
"The design of the building depends very much on the tastes of the developer," Kinhert said. "He has to decide for the well-being of the people who are going to be working there if they will feel comfortable in a tighter atmosphere."
"I know that buildings are much more efficient in the states, but here in Austria people are used to much more space - wider corridors, larger bathrooms, etc.," he said.
As far as financing is concerned, Kinhirt says that the issue of common space doesn't enter the equation. "At the end of the day it's a question of feasibility - a building with 40% common space can be just as feasible as a building with 10%," he said. "We look only at income per net square meter and construction costs."
And the success Ilbau has had at securing financing for their other projects shows that other banks aren't concerned about the contractor's design preferences. As Kinhirt explained: "If you are number one in projects, then it's clear that people prefer your buildings."
Fibiger files charges
Elwira Fibiger, heir of the pre-war owner of the Calisia piano factory in Kalisz, has filed charges against the Ministry of Culture and Art for acting to the disadvantage of the state.
The Ministry of Culture and Art issued a decision last summer saying that the nationalization of the Calisia factory was illegal (WBJ April 7-13), thereby making Fibiger the first person eligible to receive restitution of a factory. But the ministry has done nothing to execute the decision.
Now Fibiger is fighting back.
She says the factory showed a loss of over zl. 100,000 ($41,600) in the first three months of this year. To cover this the director of the factory took out a loan using some of the factory's machinery as collateral. According to the ministry's decision, this machinery should belong to her, meaning the director had no right to take out the loan using her property as security.
