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The Warsaw Voice » Real Estate » October 28, 2009
The Real Estate Voice
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Spectacular Debut on Polish Market
October 28, 2009   
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The Zebra Tower office building in Warsaw has been designed for tenants who need relatively small office space. That approach is S+B Gruppe's philosophy in all European cities where it builds offices, Managing Director Reinhard Schertler tells Magdalena Fabijańczuk.

The Zebra Tower, under construction near the Jazdy Polskiej traffic circle in Warsaw, is your first project in Poland. Why did you decide to invest in an office building in Warsaw?
Compared to the rest of Central and Eastern Europe, the Polish market is a very stable one and I am convinced that at the end of next year, the Polish economy will overcome problems caused by the global economic crisis. A lucky coincidence, the end of next year is also when we will deliver the tower for occupancy. Once we had chosen Poland, Warsaw, as the capital city, was a natural choice for us. Besides, it is simply a big, beautiful and interesting city. We had wanted to do something here for some time. We have buildings under construction in four cities and in three of them we have found a really investment-friendly atmosphere. The three cities are Warsaw, Prague and, naturally, our home city of Vienna. The fourth market is the capital of Romania, Bucharest, where admittedly the crisis makes things a little worse.

Speaking of the crisis, it is said that in a quest for savings, tenants are renting less space and abandoning city centers. How are you doing in terms of renting out space at Zebra Tower in such circumstances?
I agree there is a group of tenants for whom price is what they pay most attention to. But there are also companies which, because of what they do, have to stay here and search for centrally located buildings for their head offices. These companies are ready to pay for quality and location. Besides, analyzing previous crises on the real estate market, it turns out that the highest-quality buildings located in city centers are the ones to resist the impact of a crisis best. Such property always finds tenants and so is a good investment, especially when times are tough. You also need to remember that the buyer we will eventually sell the building to will take into consideration the location, the commercialization rate and the quality of the office building as such, including the unique architecture and finishing. End investors do not take inferior-quality buildings into consideration.

Zebra Tower will provide tenants with 18,000 square meters of space, but present negotiations indicate twice as much is needed. As to the proportion of advance leases, we have not started signing contracts yet. Since the company was established 25 years ago, we have had a rule that we finalize the first transactions only after the shell of the building is in place.

You mentioned a group of companies which cannot afford to move out of prestigious buildings in city centers. For whom are you building the Zebra Tower?
We designed this office tower with small companies in mind and so you can rent an office as small as 250 sq m. Right from the beginning, Zebra was conceived as a building for customers who do not need a large amount of space. If you are asking about the type of businesses, they are usually lawyers, doctors and tax and financial advisers.

A lot of small tenants means a lot of problems. Why this approach to renting out space?
Such is the philosophy of our company, not only in Warsaw, but also in Vienna, Prague and Bucharest. I think customers who need a small amount of space are treated worse than others, whereas we treat them well and pay a great deal of attention to their needs. You could say they are a niche which we have worked out for ourselves and which we have been successful in. And it is not true that tenants renting less space are worse customers. They are usually firms that put a premium on prestige and that do not count every penny they pay for rent, as what they care about the most is an attractive, comfortable and functional office in the best location.

What are your expansion plans in Poland?
We have a thriving office in Warsaw and the construction of Zebra Tower is going smoothly. That is why we are not going to stop after one project and our goal is to stay in Poland for longer. We are planning to build another office building in the city center. We have been searching for land and I think that next year we will be able to buy the right plot for construction.
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