You have been at Vastint’s helm since its inception in Romania, as a young entrepreneur – what drove you back then and what vision did you start off with for the company?
It all started with the Dutch Company “Vastgoed International” (international real estate) 30 years ago, which successfully expanded throughout Europe over the years and in 2008 decided to set its sights on Romania – and on yours truly. It was a remarkable experience all around – first I received the company file and stamp (which was still mandatory at the time). When I asked to be directed towards our office, after some side glances and giggles I was told “Why, that is your first task!” Thus began Vastint Romania, with my backpack as the office for the first six months, and my 31 year old self feeling like I had much to prove to the world. I was born and bred in Bucharest and knew the city like the palm of my hand – so vision wise, I first looked to match the layout with the company’s priority, which was building top quality offices.
It must be very rewarding for you and your team, more than a decade later, to be walking around the city and see the fruit of your labor? How did you end up picking the locations?
Indeed, we are a small team of 16 as we mostly outsource, so we all know the projects inside out, from design to the last nail placed in the wall. It is a remarkable feeling. The primary condition for our buildings’ success was location, location location. One of my high school classmate’s father worked in a factory producing hunting knives, which we used for our trips to the mountains. That was none other than Timpuri Noi factory, which our company bought 20 years later and converted into Timpuri Noi Square. We dreamt up the project, made it into the kind of place we wanted to work ourselves, conveniently located, beautiful and bright. Similarly, I used to live not far from where Business Garden Bucharest is standing today, which we realized would be a mere five minute drive from Victoriei Square as soon as the bridge was completed. Both were two heavily underestimated central areas before we placed them on the map.
Not many people saw the potential of these two locations, the focus was mostly on the North of the city – did it work as planned in terms of reducing congestion?
Yes, few realize just how much Bucharest has grown, 2.5 million including the outskirts, meaning that fighting congestion has become a priority for the authorities and people alike. When we presented to potential tenants we wanted to keep it short and sweet – Timpuri Noi is connected to Bucharest’s two main metro lines, which gets you within 30 minutes just about anywhere. It is also one of the city’s main residential areas, and if you want to be successful you build your office not close to the GM’s house, but to where most of your employees live. People have started valuing family time over commutes, and even over company allegiance or salary grade.
What is the current level of occupancy and how are your office buildings faring the COVID-19 storm?
Timpuri Noi square is now nearly 100% leased, and Orhideea is at 75% after NTT’s recent addition. Out of our overall 100,000 sqm portfolio we delivered over 60,000 sqm in 2019, almost 20.000 sqm at Timpuri Noi and 43.000 sqm at Orhideea, an impressive number all told. The quality speaks for itself, as even this year we were able to sign nearly 10,000 sqm. That being said of course the pandemic has hit everyone, ourselves included.
But make no mistake, the pandemic will not mark the end of the office era, as some people are claiming. We are deeply rooted social beings, we need to work together, get up in the morning and put on actual clothes and feel that sense of “normalcy” and purpose.
The age of the office may not be finished, but things are unlikely to go back exactly to where they were before – how are your tenants adapting, are they embracing the hybrid model?
Their reactions vary. Some all full on work from home mode and downsizing, while others are asking for more office space as even with fewer employees they need to space them out more to abide by social distancing norms. Offices are evolving, but they are here to stay.
You mentioned quality a few times, what does this actually mean for an office building?
Quality is everything from where we stand – people need to feel good when they go to work. So we learned, and learned, and learned. Technically speaking, we prioritized natural light, ceilings of a minimum 3 m height, fresh air. We are proud to say that our office buildings are LEED certified, and one stands out as the 3rd most eco-friendly building in the world. Most of Romania’s 3.5 million sqm of office space – which is not a lot – is made up of old office buildings, in need of upgrades, from pipes to layout.
Some are claiming that older buildings are better at fighting the virus, as they have windows that open?
Oh, we too have windows that open. And in addition to them, we have cutting edge air filtration systems that keep toxic air at bay, and treat our technical rooms like pharmacies, clean and safe. It makes our office buildings safer than people’s homes.
Bold statement – what about human error, and ensuring that people abide by social distancing norms?
Well look, we provide the canvas – it is then up to each individual employer to ensure people behave like responsible adults and all precautions are taken on a day to day basis. The buildings come with a base build, like a hard drive as it were – this then comes with dozens of possible add-ons. As for the common areas, we regularly disinfect them, and nebulize the spaces.
What plans do you have on your horizons for the coming couple years?
Bucharest Business Garden’s 2 ha land is 100% developed with its three office buildings, so there we are just looking for new tenants. Timpuri Noi, on the other hand, has almost 54,000 sqm completed, which represents just 1/3 of the entire project.
We envisage around 150,000 sqm total build there, which should be the right amount of space to liven up the area without suffocating it – got to keep the vision long term. It is already a mixed project – office, shops and residential and now we are thinking what more it could use to make life convenient. We have planned for a medical clinic, kindergarten and afterschool, as well as a fitness and spa building.
What is your final message for investors and developers about Romania’s RE market at the moment?
Personally I believe we should not extend beyond our means. I err on the side of prudence, taking things step by step, so that they do not derail. Romania does not as yet have enough offices spaces, this much is for sure, so there is room for growth. But we need to keep our eyes and ears peeled, and build smart, where and when the demand is. We remain cautiously optimistic and believe that returning to a sense of normalcy – slowly and carefully – is the only true way forward.
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