Construction and development group Skanskaʼs commercial development business in the CEE region had a record year, selling nine buildings for more than EUR 431 million and leasing 153,000 square meters in ten CEE cities, according to a press release sent to the Budapest Business Journal.
The company says that the key factors that influenced demand for prime office space in the region were the 4.2% GDP growth rate, and the constant development of the business services sector. Additionally, high demand is not only prevalent in capitals, but in regional cities as well, especially in Poland and Romania.
Skanska says it responded to market needs by delivering eight projects with a total volume of 122,000 sqm. The developer also invested EUR 495 mln in new developments, which is set to increase its total office stock by about 215,000 sqm in the coming years. The company also developed multiple sustainable and innovative solutions, such as the Connected by Skanska system, perovskite solar panels, and pollution-reducing concrete pavement.
"Another exciting year for the whole real estate market and for Skanska in CEE," says Marcin Łapiński, acting CEO at Skanska’s commercial development unit in CEE. "As we all continue to benefit from the extended real estate cycle, we managed to reach all-time high results in terms of leasing and transactions. It is worth underlining that, as a market leader which wants to deliver futureproof workplaces, we constantly focus on maintaining the high quality of our projects. Looking at our numbers and geographical coverage, I am proud to say that we continue to be the biggest and most active office developer in CEE," he asserts.
A decade ago, Skanska decided to incorporate the LEED Certificate for all buildings in CEE, starting with its Polish office in Warsaw. Last year, Skanska started working on the implementation of WELL certificates as well, in two office projects: Spark in Warsaw and Visionary in Prague. The press release says that the two buildings will become the first to achieve this certification in the region.
The CEE regionʼs real estate market is still regarded highly, attracting the attention of many market players. According to real estate service firm JLL, the transaction volume reached over EUR 13.2 billion in 2018, an 11% increase over the previous year, with Poland alone accounting for 54% of the share.
"For a few years now we have been observing growing interest in the CEE region from both domestic and foreign investors, even some from the Far East wanting to diversify their portfolios," says Adrian Karczewicz, head of divestments at Skanska’s commercial development unit in CEE. "In 2018, we concluded our first office transaction with an Asian investor, the ISOC Group from the Philippines, which bought our Silesia Business Park buildings C & D in Katowice. This is yet another example of the great potential of the CEE region, one which offers both A-class products and returns on investment that are higher than in Western Europe."
Karczewicz added that Skanska predicts demand for prime office space will remain considerable.
At the start of 2019, Skanska became the only owner of Business Link, the network of coworking and private offices for rent. Skanska acquired the remaining Business Link shares from Academic Business Incubators (AIP). The subject of the transaction was a company which manages five Business Link offices located in the Astoria office building in Warsaw and in buildings developed by Skanska in Poznań (Maraton), Kraków (High5ive), Wrocław (Green2Day), and Prague (Visionary).
Currently, 19 Skanska buildings in the CEE are under construction with a total volume of 350,000 sqm, while the company will also be focusing on continuing to implement its innovative and sustainable best practices.