Fulga Dinu, a manager with two decades of experience on the real estate market, leads the local operations of the Austrian company IMMOFINANZ, one of the most important real estate developers in Romania. In an interview with TheBizz Magazine, she talks about the evolution of the company’s activity and the measures implemented last year, in a difficult and atypical context marked by the pandemic, the current investment projects and development directions established for the next period.
The acquisition of the Bucharest Financial Plaza office building was the top transaction that broke down the real estate market in the first quarter of this year. What is the status of the building renovation project in the centre of the Capital?
We are now in the planning and approval phases of the renovation process of this building recently added to IMMOFINANZ’s portfolio. According to our estimations, the renovation work will start as soon as we have all approvals, respectively in the second half of 2022, with completion scheduled for 2024.
As part of the planned refurbishment into a high-quality, modern, and sustainable office property under our unique office concept - myhive, we will also provide more space for the public area and the green city terrace will bring a highly appealing central attraction to the capital and the residents of the city.
What investments have you budgeted and what are the priority projects for IMMOFINANZ in 2021?
Securing all permits for the renovation and reconfiguration of the Bucharest Financial Plaza building is one of the company’s priorities this year. We are also in the process of reconfiguring IRIDE | eighteen building (part of IRIDE Park, one of the biggest office building hubs in Bucharest), which will host Provita, one of the most important private hospitals in the area. The opening is expected for the first quarter of 2022 after the necessary adaptations have been completed.
Towards the end of the year, we will also start the refurbishment works for the Victoria Park building which will be converted into a myhive building. Also, we started the refurbishment works for VIVO! Baia Mare that covers a total area of more than 10,000 square meters, the equivalent of one third of gross leasable area. The works will be completed in the 4th quarter of 2021. We are also considering certain other investment projects, but they are quite incipient and when the time is appropriate, we will announce them.
The measures imposed by the health crisis have generated constant pressure on most segments of the real estate market. What are the prospects for a return to ‘normality’ in the context of the phasing out of restrictions?
The pandemic had a significant impact on the way we work and shop. Regarding our office buildings, we are well positioned with our office portfolio as we offer much more than simple workspaces, providing living spaces, with employees’ wellbeing as a priority. This will be more and more at the centre of the office experience, a trend that will continue.
Flexible working and home office will continue to be in great demand. Nevertheless, home office will never completely replace the office workstation as the social aspect and personal interaction are particularly crucial for innovation and productivity in companies. There is still a significant percentage of employees who declare that they find it more difficult to stay focused or motivated at home, to perform their tasks or feel less connected with their colleagues. Therefore, the demand for high quality office space with added value will continue and it will be very important to focus on the specific needs of our tenants. Flexibility and community play a central role here. Of course, on medium and long terms we can see changes regarding the areas requested by each of the customers.
On the retail segment, there is no doubt that the activity of the majority of our tenants has been affected by the sanitary crisis, but at the moment, the traffic is recovering in our VIVO! shopping centers. On the other hand, retail parks had an advantage because visitors could enter the shops directly from the outside, being able to operate sooner after the lock down period. The visitor frequency in our STOP SHOP park in Botoșani has quickly returned to the pre-crisis level. Our STOP SHOPs are a cost-efficient, high-yielding and crisis resilient retail format. An important factor in these centres is the concentration on low-cost convenience products, which are very popular with consumers in difficult economic times. This concept has proven successful during the Covid-19 pandemic. Discounters benefit from the increase of customers ‘price consciousness.
At our last discussion, last summer, you forecast a continued demand for high-quality office space, despite the sharp popularisation of flexible working arrangements. What is the feedback from IMMOFINANZ tenants and how would you assess the dynamics of negotiations with new customers in the current period?
In order to meet the requests of our customers, we are about to introduce a complementary business module, namely flexibility, more precisely the possibility to rent or use personalized spaces for personalized periods, depending on each need. This module, specific to myhive brand, offers a combination of high-quality co-working space with the advantages of a modern headquarters, which is characterized, for example, by a generous space, offering diverse services and excellent infrastructure.
With our myhive office brand we focus on offering the most flexible and tailor-made office solution for our tenants, which face increasingly dynamic times. This calls for an office that adapts to their changing needs. Therefore, flexibility has become one of the main pillars of our myhive office concept. This new component brings an upgrade and allows us to offer an extremely varied range of options to our tenants, in order to be able to accommodate almost any type of requirement from tenants. Tenants have the possibility to conclude long term or short term contracts, to benefit from “all-inclusive” rental services, the possibility of relocation within the myhive portfolio or the extension/reduction of leased space on a month to month basis. This product has already been implemented with great success in Vienna and Warsaw, and we are currently working on its implementation in myhive buildings in Bucharest.
How do you estimate the evolution of rental fees in 2021 compared to the level recorded in 2019/ 2020, and what is the forecast based on?
Rental fees for our properties have remained stable and major tenants usually continue their long-term commitments.
Companies will certainly continue to search for modern office space to provide employees with the best working conditions. However, employers will place greater emphasis on quality and complementary services, which is why we will continue to invest in implementing the myhive concept in the office buildings in our portfolio.
Interview by Ioan Dornescu