Prefabricated profits
Crown Point and Crown Tower, the two buildings sold last December to Imak CEE N.V., are located right on the fringe of the Central Business District at the intersection of ul. Prosta and ul. Przyokopowa. Crown Point was begun on a purely speculative basis and was completed in just 11 months. Despite the speculative factor, in 2003 the project managed to secure its main tenant, insurer Commercial Union, in what was the largest office deal on the market in that year.
Within six months after completion, the building was 100 percent leased and Ghelamco Poland's managing director, Jeroen van der Toolen, believes it was due to the building's distinctive concept and Ghelamco's flexibility that it managed to complete such a feat.
"When you look at the tenants and when you look at it from the architectural point of view and the commercial point of view, there was no other building that was built in 2004 that was 100 percent leased on completion," he said. "What the people like is that it's a very efficient building and it's a high standard but not overdone with a large atrium or large reception halls. Over the last four years companies have been increasingly looking for identity, for good quality office space that is both modest and unique. At the same time, buildings with huge atria and lots of marble are experiencing problems with letting."
According to van der Toolen, Crown Tower is Ghelamco's biggest success from the construction point of view. Because the developer together with future tenant Gerling decided on the delivery date of November 2004, the company was working under a lot of pressure.
"We had practically seven months for the construction and everybody on the market said it is impossible to construct an A-class office building in this time," said van der Toolen. "But we have a very detailed planning process and everything is in pre-fabricated elements so we can build one floor per week. With this building we actually built one floor in six days."
With two Crown buildings now completed, nearly leased and sold, Ghelamco can move on to its new projects. One of them foresees a further expansion in the Rondo Daszynskiego area with a retail and office complex near ul. Prosta and ul. Pańska. The three building complex will start construction in mid-2005 and will further develop what has so far been a 'gray area' on the map of Warsaw.
"I think this location on Prosta is the only street in Warsaw where one can create a completely new line of buildings leading into the city," said van der Toolen.
Again, the three new buildings are built on a speculative basis, but van der Toolen admitted he is currently talking to several potential tenants, such as banks and insurance companies.
In short, Ghelamco is doing extremely well on what many call an unfavorable market. Van der Toolen attributes the success of Ghelamco's buildings to a relatively short decision-making process, a flexible approach and an added value approach. What Ghelamco is able to save in terms of quick construction from pre-fabricated elements it can return to its tenants in flexibility, competitive rates and a unique surrounding.
"You have to create something extra for the tenants, something they like," said van der Toolen. "And this is what we hope to do with, for instance, Trinity Park. The three buildings will create a wider, open green area with fountains for the tenants and will include facilities such as an upmarket restaurant."
The developer is planning to reinvest the majority of the equity procured from the transaction with Imak CEE N.V. into current developments in Warsaw and around Poland as well as land acquisition.
"Although I think there is some more demand on the market right now, the market is of course very difficult, the rents have come down and the margins are lower," said van der Toolen. "On the other hand, there are more institutional investment funds looking at the market so it's easier to sell. We believe in the market, so the company is expanding in all four sectors of real-estate and we will invest in even more larger projects."
Read more about the Warsaw Auto Center retail concept in Lokale Immobilia's MIPIM issue, coming up on February 21.
Within six months after completion, the building was 100 percent leased and Ghelamco Poland's managing director, Jeroen van der Toolen, believes it was due to the building's distinctive concept and Ghelamco's flexibility that it managed to complete such a feat.
"When you look at the tenants and when you look at it from the architectural point of view and the commercial point of view, there was no other building that was built in 2004 that was 100 percent leased on completion," he said. "What the people like is that it's a very efficient building and it's a high standard but not overdone with a large atrium or large reception halls. Over the last four years companies have been increasingly looking for identity, for good quality office space that is both modest and unique. At the same time, buildings with huge atria and lots of marble are experiencing problems with letting."
According to van der Toolen, Crown Tower is Ghelamco's biggest success from the construction point of view. Because the developer together with future tenant Gerling decided on the delivery date of November 2004, the company was working under a lot of pressure.
"We had practically seven months for the construction and everybody on the market said it is impossible to construct an A-class office building in this time," said van der Toolen. "But we have a very detailed planning process and everything is in pre-fabricated elements so we can build one floor per week. With this building we actually built one floor in six days."
With two Crown buildings now completed, nearly leased and sold, Ghelamco can move on to its new projects. One of them foresees a further expansion in the Rondo Daszynskiego area with a retail and office complex near ul. Prosta and ul. Pańska. The three building complex will start construction in mid-2005 and will further develop what has so far been a 'gray area' on the map of Warsaw.
"I think this location on Prosta is the only street in Warsaw where one can create a completely new line of buildings leading into the city," said van der Toolen.
Again, the three new buildings are built on a speculative basis, but van der Toolen admitted he is currently talking to several potential tenants, such as banks and insurance companies.
In short, Ghelamco is doing extremely well on what many call an unfavorable market. Van der Toolen attributes the success of Ghelamco's buildings to a relatively short decision-making process, a flexible approach and an added value approach. What Ghelamco is able to save in terms of quick construction from pre-fabricated elements it can return to its tenants in flexibility, competitive rates and a unique surrounding.
"You have to create something extra for the tenants, something they like," said van der Toolen. "And this is what we hope to do with, for instance, Trinity Park. The three buildings will create a wider, open green area with fountains for the tenants and will include facilities such as an upmarket restaurant."
The developer is planning to reinvest the majority of the equity procured from the transaction with Imak CEE N.V. into current developments in Warsaw and around Poland as well as land acquisition.
"Although I think there is some more demand on the market right now, the market is of course very difficult, the rents have come down and the margins are lower," said van der Toolen. "On the other hand, there are more institutional investment funds looking at the market so it's easier to sell. We believe in the market, so the company is expanding in all four sectors of real-estate and we will invest in even more larger projects."
Read more about the Warsaw Auto Center retail concept in Lokale Immobilia's MIPIM issue, coming up on February 21.
