Magazine
7:48 20 October 2021
Post by: Warsaw Business Journal

THREE DECADES OF EXCELLENCE

As Ghelamco commemorates 30 years of ever-growing presence in Poland, Jeroen van der Toolen, managing director CEE, walks the WBJ through the journey of the real estate juggernaut. INTERVIEW BY MORTEN LINDHOLM

THREE DECADES OF EXCELLENCE

WBJ: It has been a journey from a family-owned Belgian developer entering the market with small construction projects to now a market-leading real estate investor and developer. Tell us your secret?

JvdT: Let’s start from the beginning. It was the owner of Ghelamco, Paul Gheysens, who decided to enter the real estate market in Poland, just after Poland became a free market. In contrast to many other companies, however, he had a long-term vision for what he wanted to achieve in Poland. And he stayed focused and he secured several strategic locations at good prices in those early years. Obviously, the push to go forward in the virgin market was very challenging and very few of the players that entered the market simultaneously are actually left today. Correct, the company took small steps from the beginning but with a determined focus, we grew stronger so that around 2005 when the Polish market and the demand for office space took off, we had both the experience and team resources and could benefit from the base that had been created.


WBJ: It was a team effort to achieve such a result, while always focusing on quality?

JvdT: Some foreign developers came to Poland and thought they could make easy money from this new market, using less expensive materials than at home to make a quick buck. Some developers consulted with architects who had no real experience with the functionality of office space. Today many of these buildings have to be taken down again because they are useless. Ghelamco, on the other hand, has always considered Poland a key market. The target tenants have been big international companies and the biggest Polish organizations. Our buildings need to be delivered to the expectation those companies have here or in their HQ. For us, the quality of buildings is the number one goal.


WBJ: To remain the market leader, you had to implement new concepts?

JvdT: When we were building in the early days in Mokotów (a southern Warsaw district), we were the first ones to implement landscaping, fountains, nice cafeterias. 

The next step on the innovation journey was us introducing BREEAM to Poland as the first real estate developer, even before it was required here. Building after building, the quality of the certification improved — from good, then very good, and, in the end, excellent and outstanding. All the time we were the first to reach the next level of the certification in Poland, raising the bar. Regarding raising the bar, we then started moving our new projects into the city center of Warsaw, first smaller ones and then finally our big flagship project The Warsaw Spire. People didn’t at first believe in our vision for The Warsaw Spire. But our analysis showed that key market conditions had changed, the “war for talent” was also becoming a challenge of delivering a proper “work experience” and the office was a crucial part of being an attractive employer.

The Warsaw Spire is not just a great building. The area around plac Europejski was voted the best public space created in Warsaw. We started creating a community, organizing events for the integration of employees of the tenants and in turn building into a destination where people wanted to work. It worked. The project became the new standard in the market and the culmination was when we won the first Polish MIPIM award for the best office building.

We had a second plan with our focus on and investment in making The Warsaw Spire an outstanding building and placemaking solution. It was also our aim to turn the total area around Rondo Daszyńskiego into a new business district in Warsaw. 


WBJ: What about the digitalization of your business?

JvdT: The next level of innovation came with the Warsaw HUB, where the focus was on total digitalization — it had been a little too early to go with this for The Warsaw Spire — but with the HUB the technologies were ready.

When you want to digitalize a building you need to integrate the systems totally. It means the building systems suppliers need to open their systems also for this matter. We, therefore, signed agreements only with companies that want to open up their systems. Access to all the data means we start to understand better how the building works. We can avoid errors. We can optimize how the building works and how the tenants use it. It means we can take better responsibility for the footprint of the building, plus the learning helps us make even better projects in the future.

We provide data to our tenants to improve the user experience (parking sharing, helpdesk, access codes) for employees and we deliver information to the tenants about energy saving, Covid safety, employment flow, usage (or misusage) of air-conditioning, light, computers. With these details, you can now start to evaluate how you as a company are spending your costs and we are also able to give you benchmarks from other tenants and offer solutions for optimization.

This is of course not the end product, this is a work in progress and we are continuing the development of these systems.


WBJ: What about safety and sustainability?

JvdT: When Covid hit, we established a team of people to work with Warsaw University, to find solutions for future safety in offices. The result is, in the Warsaw HUB and the Warsaw UNIT skyscrapers, we installed UV lamps — that effectively disinfect the space — and an anti-pandemic button that pressures fresh air in and takes used air out. Ghelamco was the first company in Poland to have been recognized by the IWBI (International WELL Building Institute) as an "early adopter" as a part of WELL Health-Safety Rating. The rating is designed to address the post-COVID-19 environment and the related safety concerns in the workplace. Now The Warsaw HUB complex (offices, retail part and hotels) have been awarded the WELL Health-Safety Rating, and the Crowne Plaza and Holiday Inn Express Warsaw were the first hotels in Europe to receive this certification.

Another important element is that all three towers run on green energy — a step we take very seriously. This is obviously also important for our tenants but we need to be always one step ahead. This is the reason why we still can lead the Polish office market.


WBJ: The Spire, the HUB, the UNIT and the Bridge — the pressure to continue improving and make the next building even better must be an amazing challenge?

JvdT: Yes it is. This is what we like. This is and has been the big focus for years: forecast what clients want and what investment funds want. Both are our partners, so we need to think about what both of them want and keep delivering.

In the Bridge, we are now introducing a new concept. A system to bring down the water consumption — the first ones to do so in a large building in Europe. This can decrease water consumption by 50%.

We are also trialing a new air cleaning system in our test center. The first results show we can reduce bacteria and viruses by 97% in the air inside an office building.

So as you can see we don’t stop our development.


WBJ: The pandemic has changed and disrupted the normal office for work, office standards situation. What are your actions to address the “new normal?”

JvdT: I don’t think there is a new normal today. Organizations are experimenting. They are trying to find out what is the right way forward for work. From my talks with our clients, I have the evaluation they will need the same amount of office space as before. Some people will be able to work from home or remotely, others not. But the space needed per workstation has grown, and trends and expectations for more social space also demand space. We are not seeing any effects of the pandemic influence on our lease of space.

Some companies obviously have had to reduce space as an effect of the health crises, but it is rather a sector- and company-specific problem of lack of growth, while other sectors grow faster now and still need more space. How people really want to work in the future is still a question mark.

Actually, a positive thing for Poland that we have noticed lately is questions from new corporate companies that are looking to limit the risk of having offices in India and the Philippines and are instead choosing Poland as a hub for development because the internet and technologies are simply more stable and better here.

But for sure who will suffer will be the older buildings that have bad ventilation systems, buildings that cannot be upgraded, that cannot deliver a good user experience. Investments in these buildings are probably not even profitable and many such buildings will end up being changed into residential properties.

Very good quality and healthy buildings are the winners in the new office space environment. The corporates are setting health standards for the organization. Plus the banks and investors are setting new health specifications about higher BREEAM and health certifications. They will only finance buildings that actually fulfill these measures. 


WBJ: Are you going to sell the HUB and the Unit?

JvdT: In the last 2-3 months we see activities picking up pace in Warsaw and other big cities in Poland that are attractive. So yes, we are preparing ourselves, if the right offer comes our way.


WBJ: Covid put the green plan on the back burner. However, now it’s back on everybody’s agenda. How are you adapting new buildings to the environmental issues we all are facing? Lately, you have also started some impressive residential projects in Warsaw. Is it part of a diversification strategy?

JvdT: We always did a few residential projects. But we decided now (during the pandemic) that we have to boost our residential portfolio. Because we cannot do much more in the office scene in Warsaw without only competing with ourselves, so to grow further, we decided to focus on residential. We have several projects in the pipeline in different cities — Warsaw, Wrocław, Gdynia, Kraków.

In the last few years, we also finished some very high-end projects in Warsaw like apartments at Foksal and Flisac. The experience from this market segment has led us to start investing in some exclusive housing projects in the Warsaw suburbs. The first phase in the Konstancin-Jeziorna project is sold out already. So we are starting the second and the third phases simultaneously now. This is surely an effect of Covid. Because when we analyzed the market 2-3 years ago, the sales effects were not like that. But now as people work more from home, they realize that they can (to some extent) change the value of their existing apartments to houses with more space, next to forest or green areas.

This is a segment we will invest more in. We have already more plots to build on. Next year we plan to start three new projects. But it is not a replacement for our office project portfolio. It is a complementary portfolio.


WBJ: What should we expect from Ghelamco Poland in the next 5-10 years?

JvdT: To build a new tower take almost four years from the time construction starts because in Warsaw you need to go deep in the ground for parking spaces. We plan to build five more large office projects/towers. We have all plots for our projects. (The Bridge is the first.) But of course, the speed of implementation depends on the market situation.

We will also continue office projects in other main markets in Poland. You will also see a lot of nice residential projects which we are going to do. We have land for this but we are still acquiring more land.

We will continue the process of new innovative solutions and learn from what we have already started. We do expect a lot of new things to come to the market and we want to be a market leader still. So we need to lead this.

Last but not least, regarding sustainability and the green plan, we plan to become carbon neutral. We now have a board member fully responsible for sustainability and innovation and we have set a target to be able to fulfill all the 2030 targets before 2030. We believe we will be able to meet them in 2027.


ghelamco
jeroen van der toolen

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