Coffee with Craig Show – daily CRE news covering the CEE region, Thursday, May 12 with Winston Norman, Editor and Chief of EuropaProperty.com.
WAR TO CAUSE UKRAINE ECONOMY TO SHRINK NEARLY A THIRD THIS YEAR
Russia’s war on Ukraine will cause the latter’s economy to shrink by nearly a third this year, the latest forecast from the European Bank for Reconstruction and Development shows. Ukraine’s GDP will suffer negative growth of 30 percent in 2022, a downward revision of ten percentage points compared to the Bank’s projections released as recently as March.
GDP growth in Ukraine is forecast to bounce back to 25 percent next year but this assumes that substantial reconstruction work is then already underway. How long the hostilities last, the shape of any post-war settlement, the extent of reconstruction and how many refugees return home will also influence the recovery’s speed.
With the 3.4 percent GDP growth recorded in 2021 no more than a distant memory, the war is putting Ukraine’s economy under enormous stress, with the heavy devastation of infrastructure and production capacities.
EUROPEAN CRE PROVING RESILIENT IN THE FACE OF MACRO HEADWINDS
The first quarter of 2022 was dealt a devastating shock by Russia’s invasion of Ukraine – despite this, market resilience and historically high levels of dry powder continued to support investor interest in commercial real estate (CRE) in Europe, the Middle East and Africa (EMEA) according to the latest Capital Markets snapshot for the region released by Colliers.
The snapshot nonetheless indicates that in Q1 investor interest in CRE continued to recover from the pandemic, with many investors seeing property as a hedge against rising inflation.
“Inflation is being felt in the construction industry, among others,” said Luke Dawson, Managing Director, EMEA Cross Border Capital Markets, “More costly materials have added some unpredictability into the development of new housing and commercial property.”
Both occupier and investor performance has been strong across most European markets in Q1, with renewed confidence in the office sector. “One of the businesses leading the charge was internet giant Google, which closed a £762.5 million deal for London’s Central St Giles development and a €583 million transaction for The Warsaw HUB office complex in Poland’s capital. This points to long-term post-pandemic confidence in the region’s office markets,” explained Richard Divall, Director, Cross Border Capital Markets.
Hotels and leisure, which were hit hard by the pandemic, have been on a clear revival path since mid-2021, with Southern Europe, in particular, seeing renewed interest.
LAKESIDE CONSTRUCTION IS NOW FULLY POWERED BY WIND ENERGY
The construction of the Lakeside office building in Warsaw’s Mokotów district is being completely powered by clean energy from renewable sources. 100 percent of the electricity used during the construction of the Warsaw office project owned by Atenor comes from wind turbines. The sustainable Lakeside project has also previously received pre-certifications from BREEAM at the Outstanding level, and WELL at the Gold level.
Completion of the investment is scheduled for Q4 2023. The general contractor of the project is PORR. The international advisory firm JLL is responsible for the commercialisation of the Lakeside office building.
“ATENOR’s sustainable approach to architecture and construction, and the resulting reliance on the highest quality standards, allow us to shape the urban landscape with the present and future needs of the city’s residents in mind”, commented Sven Lemmes, Executive Officer, Atenor.
The Lakeside office building is being constructed in the southern part of Mokotów. The class A office building offers 24,000 sqm of space.
“The developer’s meticulous attention to achieving the goals set out in the ESG strategy is in line with our thinking as an advisory firm, which is the creation of a responsible business fit for the future”, said Ilona Danelczyk, Director, Office Agency, JLL.
BANK PEKAO TO CREATE AN 18-FLOOR WORKSPACE IN HB REAVIS’ FOREST TOWER
In one of Warsaw’s largest office transactions, HB Reavis has leased 18 floors (around 30,000 sqm) in its Forest Tower to Bank Pekao. Poland’s second-largest bank will become the building’s anchor tenant. The new HQ reflects the ESG-driven strategy of the bank – which aims to support sustainable development and social responsibility, all while having an inspiring workplace.
The bank has committed to supporting the carbon neutrality of its business activities, e.g., through pro-ecological improvements in its branches and activities improving the satisfaction of its employees via wellbeing solutions. It is this focus that led Bank Pekao to choose Forest.
According to HB Reavis, Forest provides above-standard air quality and supply, while its energy-efficient windows deliver plenty of daylight and heat comfort. WELL and BREEAM-certified, the design by HRA Architekci uses a number of environmentally-focused solutions to reduce its carbon footprint and maximise resources, including the re-use of rainwater.
The Forest office campus offers 78,000 sqm of space and is now almost 80 percent occupied.
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