Portfolio has interviewed Tom Lisiecki, CEO of TriGranit
Portfolio.hu, one of largest Hungarian economic portals has interviewed Tom Lisiecki on the occasion of the annual Property Investment Forum, where he shared his thoughts on the Budapest office market.
You are seemingly very busy, since you are the CEO of TriGranit. What are the reasons: you are rethinking the whole Hungarian Strategy of TG or you are working on fully new projects?
- Partly the second. But the most important reason is our Hungarian development, Millennium Gardens in Budapest.
- As for our Hungarian strategy – we still see huge potential in Hungary for long term and are planning new developments. We are looking for new opportunities and plots in Hungary, while we are working on several developments in the region.
Have you already found a plot to buy in Budapest?
- Not yet, but we are looking regularly for new opportunities, and we are monitoring several options.
You mentioned ongoing developments abroad. What are these?
- TriGranit is a regional company, with its first project abroad in 2000, the Polus Center in Bratislava. And, since then, we had been handing over one development either in Hungary or abroad almost yearly, even during the crisis.
- We had launched one of our actual developments, the Bonarka for Business office complex in Krakow also just right after the crisis in 2011. And we have handed over already the 8th building, Building H lately, offering already 75,000 sqm GLA office space overall. We will develop 2 further buildings, I and J 10,000 sqm GLA each. The construction of Building I will start highly possibly already this year.
- Our other actual development project is the firsts phase of the Silesia for Business office building with approx. 26,000 sqm GLA. We will start construction soon, with a prospective delivery of 2021.
- Both projects reflect well TriGranit’s philosophy – buying a huge plot and developing it in different phases following the market needs and creating multifunctional city centers. We are constructing this way not only cities-in- the city, but can really react to the actual market needs, and start an office construction, when there is a real need.
If you can mention only one USP at Millennium Gardens, what would you say? Why should tenants choose you instead to the offices on the other side of Soroksári Street
- The location – right on the Danube, great transport connections, huge parking area, several amenities in-house and nearby. And the flexible office areas within the 37,000 sqm GLA office building offering 21st century technical solutions and sustainable PM.
- Uniqueness of the project offers the MCC itself, developed by TriGranit, a real city-in-the-city offering over 100,000 sqm office space, services for the employees, cultural programs via MÜPA and the National Theatre and a 1,5 km green promenade for recreational purposes.
- MG and the other new office developments nearby, offering a good option for the tenants to stay here and increase their office space if necessary.
Can be the Soroksári Street a real office sub-market similarly to the Váci Corridor?
- The South Pest Office Corridor makes up already now around 15-20% of the overall Budapest office stock, and the pipeline is also remarkable. The submarket is a popular and developing area with several residential and office developments in the pipeline.
Do you plan to carry out developments also in South Buda?
- As the developments are partly our competitors, we are of course monitoring them, but for the time being, we stay on the Pest side of the river. Lots of residential developments are in the pipeline here, which supports the office market. We see a good potential here.
What about the employers need as for the fit-out. Any extreme requirements?
- At Millennium Gardens, I cannot mention any extreme tenant requirement, but we clearly see the change in the fit-out requirements, and we try to fulfil the tenant needs as good as possible. In MG, we will have much more common areas, which are suitable both for common work and relaxation compared to any other developments of TG before. These changes in requirements are also reflected in the fact, that while earlier mainly Financial Directors took part at the leasing discussions, nowadays, HR people are more and more involved, sometimes also in the final decisions.
- While earlier overcrowded office space was more common, nowadays it’s not rare, that several hundred sqms are dedicated only to chill-out zones.
- Important – as Millennium Gardens is a speculative building, at this stage we are focusing on these kinds of solutions at the common areas but will support the tenants creating their own office space along their own requirements.
Are serviced offices and coworking offices more and more common as potential tenants in “classic” offices? From investment point of view, they are more risky tenants, as classic ones. Do you calculate with coworking offices in Millennium Gardens? eg Places?
Clear, that coworking is a rapidly growing phenomenon on the office market, but whether they will cover 5/7/20 percent of the overall office stock, is hard to say. The location is definitely very important. And, the flexibility – while a huge bank is not forced to extend or decrease their rented area short-term, in cases of eg IT/Telco companies operating call centers, it’s important, that they can handle their office space flexible.
You are however right, from investment point of view, having too big coworking spaces is riskier than operating normal office spaces.
How do you rate the Hungarian shopping center market? Is there any place for new malls? Is the market not over mature for new mall projects?
- The operating shopping centers are performing well in Hungary (good occupancy rates, increasing visitor numbers and turnovers, new Hungarian owners stepped into the retail sector, as they see good potential in it). However, the potential for development of new schemes is very limited – there are 2 projects (Mundo, Aquincum Center), which are blocked already for years. The market is not fully saturated, but mature.