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edition 9 (223)
September 2017
Office & mixed-use development

Ready, steady…

Interviewer: TSG

Ready, steady…
Mariusz Frąckiewicz, Poland director, Avestus Real Estate & Marta Wybrańska, leasing director, Avestus Real Estate

Avestus has announced several new projects, including Imagine in Łódź. When will the construction work on this project be launched?

Mariusz Frąckiewicz, Poland director, Avestus Real Estate: We have received all the necessary decisions so far regarding the building permit, having first applied for it in July. We should receive the final go-ahead in the autumn and be able launch the construction work straight away.

Is the interest from tenants sogreat?

Marta Wybrańska, leasing director, Avestus Real Estate: Łódź is a very dynamic market. This can be seen in the market reports over the last few years and it seems that the trend we are seeing of new companies entering the city is set to continue. Our project also has one key asset – it will be developed in a special economic zone. The economic benefits of operating in such a zone are an additional incentive for tenants. We have been in negotiations with tenants and have noted a great deal of interest in the project.

Mariusz Frąckiewicz: We won’t be signing any contracts until we have the final building permit. However, we hope that we will be able to reveal the first few leases soon after the document is issued.

Will Avestus be developing Imagine alone? So far youve worked with others on your Warsaw and Kraków projects.

Mariusz Frąckiewicz: This decision has yet to be made. We will probably develop the project independently, but we have not ruled out entering into a partnership with another company, because investors are interested in the project. We are prepared for either option and this should all be settled within a few weeks.

When will the work on the Cube project on ul.Postępu inWarsaw start?

Marta Wybrańska: Currently there’s still a building by Eiffage on the plot. However, together with Cushman & Wakefield we’ve been holding talks about commercialising this project. We’ve already had a few letters of inquiry. Służewiec is quite a specific district in terms of leasing. Buildings are leased out about a year before their completion. However, we’ve decided to start now. We’re negotiating over the offices as well as the retail space on the ground floor and the space earmarked for the medical centre and the fitness tenants. We want to secure preleases for the retail space, which is now possible, and complete the leasing out of the office space over the course of the construction work.

Mariusz Frąckiewicz: There is one more nuance here. Due to its specifics, the project is also attractive to hotel operators. Our task is to coordinate the leasing of the offices with the construction of the hotel. Negotiations with hotel operators are the responsibility of our partner, Eiffage, and these have now entered the final stages. We want to start and finish the construction of both types of space at the same time. This is very important because the ongoing construction work on the hotel could be seen as a major inconvenience by potential tenants. In the same way, hotel guests would certainly not want to look out of their windows onto nothing except cranes and bulldozers. We should be starting the construction of both parts of the project this year. The work will probably last until Q2 2019.

Is the Enterprise Park project inKraków already over?

Mariusz Frąckiewicz: Building E is already completed and has been handed over to the anchor tenant Aon, which is currently doing the finishing work. Meanwhile, building F should be completed, including the finishing work, in November – and this is when it will be handed over to Delphi.

Will there be any more buildings inKraków?

Mariusz Frąckiewicz: There will be, including some in two-stage projects. We are looking for attractive plots and negotiations to secure them are at an advanced stage. As the office development market in the city continues to grow, finding a suitable location is becoming increasingly difficult and, crucially, the entire process takes more time. However, we are patient and we are exclusively targeting plots that possess convenient access to a wide range of infrastructure with good connections to key districts of the city, such as Zabłocie.

What are your other plans for the near future?

Mariusz Frąckiewicz: Our Irish owner, Avestus Capital Partners, is one of the leading owners of apartments for rent in Dublin. Together with private equity funds, we have over 900 apartments and houses in our portfolio. We might try to recreate this model in Poland. We are currently looking for suitable locations. In our opinion a good location is of crucial importance. Considering the current prices of land, finding a location that is attractive in every respect is not an easy task, but it’s certainly feasible. I hope that we’ll soon be able to announce a new business line for Avestus Real Estate in Poland.

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