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edition 7 (222)
July 2017
Investment & Finance

Muscling in on the scene

Is Apleona GVA set to tip the balance of power on the consultancy market in Poland?

Ewa Andrzejewska

Muscling in on the scene
Michał Ćwikliński, managing partner, Apleona GVA

They have ambitious goals, they are itching to develop themselves, and the owner – the EQT fund – is hungry for success. Michał Ćwikliński has been chosen to be the head of Apleona GVA in Poland and to introduce the company to the market. He spoke to us about his plans for its entrance

Ewa Andrzejewska, Eurobuild Central & Eastern Europe: In July you are bidding farewell to Savills to face a new challenge Apleona GVA on August 1st.

Michał Ćwikliński, managing partner, Apleona GVA: That’s right. After seven years I have decided to leave Savills due to a number of factors, but mostly because I was excited by the challenge of introducing a new brand – Apleona GVA – to the Polish market. And to introduce my new organisation, I would like to start by pointing out that GVA is a well known company in the UK, where it employs a few thousand people (the sixth biggest in the real estate sector there). Around three years ago, GVA became part of German construction group Bilfinger. In 2016 Bilfinger decided to focus on its core business, construction, and to sell its GVA real estate business – as well as its facility management companies, including HSG Zander in Poland. In the middle of the year the business was purchased by a large Swedish fund, EQT, for app. EUR 1.5 bln and its new name, Apleona GVA, was announced during the Expo Real fair in Munich. The real estate consulting segment is now called Apleona GVA Real Estate Advisors, while HSG has become Apleona HSG. This is how we have come to Poland, because Apleona GVA has been operating here since 2016 and now employs more than 80 people mostly as support for its UK and German management departments. These are people with wide-ranging expertise in real estate management, as well as the calculation of service fees and lease contract administration. The corporation has actually been present in Poland for a dozen or so years in the form of its HR, IT and finance departments, so this will give us substantial support for the development of our new consultancy operations.

But you are establishing a new company, arent you?

EQT has decided to expand Apleona GVA not only in the countries it is already present in, but also onto new markets. Warsaw will be the first country where we are opening an office to operate in the consultancy segment of the real estate market. This is why I’ve been employed as well as Bartłomiej Krzyżak, who has already been working here since June and whom I have worked with for the last seven years. I will be the managing partner of the new company starting from August. The majority owner is Apleona GVA. We will operate on the real estate market, where our competition will include such players as JLL, CBRE, Cushman & Wakefield and other similar companies.

What is the new company going to be like?

At the beginning we will be starting with what we are most familiar with. Due to my experience we will have an investment department, office department (on the tenant’s side), technical consultancy and a warehouse department.

In the announcement by Apleona GVA about the new executive appointments, that is, you and Bartłomiej Krzyżak, they also mentioned hotels...

Yes, they did – because we already have two people in the technical department who are focusing on technical consultancy regarding hotels.

Who else is going to be on the employee list?

We are in negotiations, so new names will be revealed in the next few months. They will certainly be well known people with considerable competences. We will have a dozen or so people in the company by the end of the year and a few dozen by the end of the next. We have ambitious goals and we’re very eager to develop – the company has the capital behind it and EQT is hungry for success. We are planning to carve out a substantial portion of the real estate market for ourselves. I think that we have the perfect chance to do so. You only need to look at the market, which a lot of companies have disappeared from – such as King Sturge and DTZ. The number of international consultancies has shrunk and when you look at construction companies here in Poland, which started from scratch and have become successful, it has to be said that with a foreign brand, a strong financial background and my experience we are bound to succeed.

Which department do you think will be the biggest?

As Apleona GVA, we have ambitious plans for our geographical development, the growth of the company’s value and opening subsequent business lines. In Poland at the beginning, the investment department will most probably be the strongest. It will hire 6–7 people in two or three months. The agency is also important, if only because working well with developers, investors and leasing support will be the basis of the entire business and this builds value for property owners. Besides, the investment and technical departments as well as the agency give us opportunities for cross-selling.

What about the real estate management department, which provides at least a semblance of stability in times when the demand for investment services subsides?

Management services generate low margins and in Poland you have to operate on a large scale. Building up the scale requires a lot of capital. I know a few companies that have a problem creating a suitable scale and making profits from their operations.

What targets has EQT given you for this year?

So far they are to employ a group of people – and it is not easy to find competent, engaged personnel who are motivated to work hard. But the team has to be the basis. If you have excellent people, you are bound to generate successful results. I would like to form a team that will be full of energy rather than a colossus on clay legs. I’m going to be focusing on the quality of the team because it is not my ambition to be the largest. If you are 30, 35 and still only number two or three in your department in one of the bigger consultancies. Perhaps you will want to change this? I wanted to, so perhaps others will want to come to work for us, too.

You will not be the only one looking for such people. Surely other consultancies that are expanding are also on the lookout?

This is true, but we can offer something unique: the work of those who join us will be part of a road to success, they will be co-creating the company almost from scratch. You can derive a great deal of satisfaction from building something completely new. Secondly, we are a company that will be able to reward its staff for good results in a variety of ways. We will be the first such company with German roots and a fantastic background in relation to Germany on the Polish market, but also in other countries too. Our headquarters in Germany will provide substantial support, but I will also have a great deal of freedom as I was chosen because I have ideas for creating development. I was the co-architect of the transformation at Savills and for seven years built up a company that grew from a dozen or so people in a few years to over 100 and won many industry awards within a few years.

How long is EQT going to be prepared to pay before it leases something or when is it that the investment period is going to end and the owner will start expecting measurable results?

So far it is in its investment phase and eager to invest in Poland and in other countries. And it is not only going to be companies in the real estate sector but also those from outside the sector that will be our natural clients.

Will Apleona GVA also be looking to open new branches in other Polish cities?

First you need to learn to walk before you can start running. So coming back to your question: one step at a time. We are open to organic development, but also to the possible acquisitions of smaller but fully-developed local players.

Lets assume that I am a new tenant on the market and I am looking for an office of around 1,000 sqm. Why is it that should I come to you rather than to someone else like Ania Młyniec, Tomek Buras, Łukasz Kałędkiewicz or Robert Karniewski?

The market is big enough for everyone to have something to do. However, let’s start from the fact that you do not know who will be joining us to be responsible for offices, or what contacts and experience they will have. You listed large companies and heads of departments, but if don’t have 10,000 sqm and have 1,000 sqm instead, company heads will not deal with you and you will be transferred to someone in a lower position. But if you come to us, you will receive top quality service. It is clear that as a client you should expect the support of an experienced person and you want to feel like a unique client. The fact is that we will be the only German firm on the consultancy market, so we will be the natural number one choice for some clients, and this is to our advantage. Our owner is Swedish, so we will have access to Scandinavian tenants and investors as well as UK ones through our relations with GVA.

Looking at the local turf from the point of view of someone who is going to be in charge of a consultancy, could you tell us what changes we can now expect to take place on this market?

A few agencies will probably emerge, because the market has been growing. We have over 5 mln sqm of modern offices and will have 10 mln sqm in a few years. The scale in Warsaw resembles that of Vienna, with 10 mln sqm, so we will also be moving in this direction. And the largest agencies, such as JLL, CBRE, Colliers International, Cushman & Wakefield and Knight Frank, will not be able to absorb aathat scale by themselves.

In what way are the various structures of consultancies or the range of the services offered by them changing?

Well, office departments these days require not only tenant representation and owner representation, but also workplace solutions and they need to be divided into territorial specialisations. One example of such a market would be the UK, where there are many business lines, a lot of specialisations and there is a geographical division within the leasing departments themselves, which is why in Warsaw there is probably going to also be divisions specialising in for example the city centre, Mokotów, Wola, the Al. Jerozolimskie corridor and provincial cities, where separate regional offices are already being opened. Consultancies are currently ‘neglecting’ smaller plots; we do not have residential or spatial planning departments, and only a select few are involved in hotels, etc. When I worked for King Sturge in London, I even came across a service and plot sourcing department for telecommunication masts. Just a few years ago many affluent individuals were looking to build something from scratch to leave to their descendants. Nowadays they want to invest in properties that generate income and they need trusted consultants for that. There will also be more companies specialising in raising property values, that is, in asset management – and their remuneration will depend on how these values grow. Fewer and fewer investors are now opting to open branches in Poland, so instead they will be looking for an experienced team on the ground.

Who will take the helm in Warsaw?

Michał Ćwikliński will be the head of Apleona GVA in Poland as its managing partner, starting from August 1st. He will also join the European management of Apleona GVA. Michał has many years of experience in the sale and purchase of commercial properties in Poland. He was recently the head of Savills’ investment department, where from 2010 he finalised transactions worth app. EUR 3 bln while helping to build up the Warsaw branch of the company as a member of the board. Prior to this he was employed by King Sturge for seven years, in its departments in London and Warsaw. He is a member of the Royal Institution of Chartered Surveyors and a graduate of the Warsaw School of Economics, London Metropolitan University and the University of Reading’s college of real estate management.

Apleona GVA

Since the sale of Bilfinger SE to Swedish investment fund EQT in 2016, Apleona GVA has been expanding the range of its consulting services on the Polish property market. Its Polish branch has already been providing investment consultancy and office and warehouse consultancy (to tenants) – and the new company’s range of services is also to include technical and hotel consultancy. On the Polish market Apleona GVA is looking to concentrate on its organic growth as well as the possible acquisition of local rivals.

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