Ema Iftimie: Record-Breaking 100k+ Sqm Of Offices Leased By Globalworth In H1

People, Places, and Technology are the key elements of Globalworth’s office strategy, which supports the group’s ongoing actions to enhance the workplace experience. Tenants seek to imprint their identities on the spaces they share with their employees, and Globalworth is helping companies achieve these objectives, according to Ema Iftimie, Head of Leasing at Globalworth Romania. She tells BR that companies are looking to increase the productivity and efficiency of their operations by having more employees back in the office, as reflected by Globalworth’s strong leasing activity in Bucharest.

By Ovidiu Posirca

What was the total office leasing volume recorded by Globalworth in Romania in the first half of 2023 and what is your outlook until the end of the year?

In terms of leased premises in the office sector, Globalworth has had a remarkable year despite the real estate market still experiencing many difficulties. In the first half of 2023 alone, we negotiated over 100,000 sqm of office space across all three categories of leases: new leases, renewals, and expansions. It’s important to note that the recorded volume for each category was notably high.

What were some of the biggest office leasing transactions that you completed in H1 2023? What are the expectations of these big new tenants from your office projects?

All types of rental agreements have scored very well on size in 2023 so far. Just to put things into perspective, the total market demand in 2022 for office space in Bucharest was around 280,000 sqm. In this year’s H1 we entered into new agreements for large surfaces with both eMAG and Banca Transilvania, which rented almost 10,000 sqm each, followed by substantial numbers from Returo, Coca-Cola HBC, Maspex, and others. In terms of contract extensions, Honeywell was one notable case with an impressive 24,000+ sqm, followed by both Huawei and Deutsche Bank, each with over 12,500 sqm of rented office space. All these significant achievements were the result of our team’s efforts to support the specific needs and demands of both new and existing partners, offering productive, premium quality, and highly customised working environments.

What are the key factors shaping Bucharest’s office leasing market this year and what is your outlook on the rental environment?

The leasing market in Bucharest has been impacted by macroeconomic issues recently and it is common knowledge that it has experienced many downturns. However, these factors are not the sole determinants of the dynamics of the office market, because on the other hand, we are witnessing the “return to office” movement, whereby companies are looking to increase the productivity and efficiency of their operations. According to many recent studies, this is more achievable with higher levels of in-person collaboration. Another positive aspect is the fact that Romania remains an attractive business destination in terms of finance, labour costs, workforce availability, and digital skills. All these factors should provide a stable enough environment for the leasing market to follow its set course until the end of the year.

How is Globalworth approaching office fit-outs and how are you collaborating with tenant companies to create the workspaces of the future? What surface do you currently have in the fit-out phase and what is the total volume of projects delivered to date on this business line?

We are fortunate to have had an amazingly wide range of styles and spaces entrusted to us by our tenants. Since the inception of this business unit, Workplaces by Globalworth, we have managed to deliver more than 260,000 sqm. I firmly believe that our strong H1 2023 performance figures are due both to the quality of our property portfolio and to the personalised services of the Workplaces division. Our company’s fit-out team has delivered nearly 3,000 sqm of tailored spaces since the beginning of the year and has an additional 41,000+ sqm underway for both new and existing tenants. To mark the incredible numbers we’ve achieved so far, we recently issued the “Workplaces by Globalworth” catalogue, which showcases our diverse projects for our equally diverse customers.

Are there any specific demands that tenants have for fit-out projects and are you seeing any emerging trends in this respect?

In wide terms, sustainability, innovation, well-being, and technology are currently dominating the sector. Flexible, co-working, and hybrid workspaces are still in charge after the pandemic. These spaces provide the necessary amenities for a variety of working styles and a more welcoming atmosphere. Such innovations offer companies the tools to create a more productive and enjoyable work environment for their employees, thus getting them back into the office for a longer time. Working environments that prioritise improving employees’ physical and mental health are in focus as well. Multisensory design, natural lighting, and live green plants are other trends boosted by the latest demands in office interiors. Beyond the general trends, brands seek to imprint their identities on the spaces they share with their employees. One of the most outstanding projects we’ve delivered this year was for Sameday, abundant with colour and featuring vibrant, highly personalised areas that are truly unique.

How important is the fitout of an office project considering the adoption of hybrid work models? Can such an investment contribute to a higher rate of return to the office among employees?

The working environment has increasingly evolved over recent years, becoming more of an experience than merely a pleasant space. A suitable environment— among other incentives—is indeed one of the factors that can draw larger numbers of people back to the office. We always strive to provide our tenants with valuable insights when they’re deciding on the type of interiors they want, aiming to meet their current needs and add value to their businesses in terms of space efficiency and desirable surroundings.

How are you keeping costs under control for tenants that have started fit-out projects with Globalworth?

We begin by assessing all of their unique needs and requirements, followed by providing the design and budget planning for the future project. Once a clear scope of work has been agreed upon, we develop a comprehensive budget that considers all expenses, including labour, materials, equipment, permits, and contingencies, after we seek quotes from different suppliers and contractors to compare prices and services. This helps us get a better idea of market rates and identify cost-saving opportunities. The next step is to explore value engineering options to identify alternative materials, optimisations or construction methods that offer cost-effective solutions. All these are done without compromising the project’s quality or functionality. While it’s essential to choose quality materials that meet safety and regulatory standards, we can still find cost-effective options that fit the project requirements. We rely on our strong partnerships with experienced contractors on the Romanian market, ensuring highquality deliverables, cost efficiency, reduced risks, and enhanced innovation. Our tenants can practically enjoy a worry-free experience. We believe that, in addition to our proven fit-out expertise, the greatest benefit we offer to our clients is an all-in-one fit-out solution that is significantly more cost and time-efficient.

Property groups have started to publish strategies aiming to reach net-zero across the real estate portfolio. Are you analysing the potential of your present and future developments to reach this status?

We are fully committed to delivering on the ESG objectives we’ve set for the coming years. We are pledged to reduce our carbon footprint by 40 percent by 2030, using 2019 as a baseline. Our efforts reinforce our already 100 percent green certified Romanian portfolio, but we are also engaged in an extensive process of incorporating new sustainable features into our assets, in both the office and the industrial sectors. To provide some examples, we have the highly technologized Globalworth Square with an advanced intrinsic cooling system based on ice storage technology. It has a rooftop equipped with an entire solar plant and utilises the new AI-powered solution, Honeywell Forge for Buildings, for energy consumption reduction and operational efficiency. So far this year, we’ve added extended solar panels to another three of our assets: Globalworth Plaza, the office building, and Timisoara Industrial Park and Industrial Park West, two of our industrial facilities.

How is Globalworth’s ESG strategy supporting office leasing operations? Are companies looking for office space paying bigger attention to the ESG component?

They are. Because ESG is no longer just a trending topic. It’s a necessity on many levels. Whether we’re talking about social responsibility, protecting our cities from pollution, tackling global warming or aiming to cut electricity costs, a solid green building in which to conduct our businesses is the first and best option. Therefore, rentals now come hand in hand with all the ESG criteria that can be met, while tenants are more and more knowledgeable in this area.

Tracking the impact of an ESG strategy is a challenge for property companies. What is your approach and how can technology help you obtain relevant results?

All our technical additions aimed at tackling climate change and fostering a greener environment yield highly quantifiable outcomes. For instance, the combined power of our existing solar plants is around 834 kW, enough to provide 100 regular houses with electricity for a full year. In terms of environmental impact, the same capacity would equate to planting 50,000 trees or removing 250 cars from the roads. With two new projects underway that will be geared up with photovoltaic panels, we anticipate doubling that capacity. Furthermore, the Forge solution I mentioned earlier provides precise data. It collects information from devices, machinery, and human operations, analyses this data, and offers actionable insights and recommendations.

How is Globalworth adapting its portfolio of projects to meet sustainability goals? What kind of investments have you completed or plan to roll out, especially in the energy component?

First, we design our buildings to be highly sustainable, and to achieve this we have always used the latest technologies available for their development. This is why our entire Romanian portfolio is currently green accredited and certified. For example, one of our flagship buildings, Globalworth Square, was awarded the first BREEAM Outstanding recognition in Romania and only the third globally, thanks to its overall efficiency and sustainable footprint. But we won’t stop there. Our strategy involves consistently upgrading our assets. Many of them have undergone refurbishments and significant technical improvements using the newest available solutions on the market. And our solar plants programme is part of the process to meet our evolving sustainability goals.

Are tenants in your office buildings more interested in the ESG readiness of your projects compared to those in your light-industrial portfolio?

In our experience, there’s been a noticeable emphasis on ESG readiness among our office tenants. Our strategy for sustainable development revolves around the fundamental tenets of “People, Places, and Technology.” We are committed to delivering environmentally sound and safe buildings that cater to our occupiers’ requirements while ensuring that we continue to make positive contributions to the communities we serve. To that end, in 2022, we have accepted the challenge of proactively managing the consumption and associated carbon emissions produced during the construction and operation of our properties. This effort is aimed at further reducing our carbon footprint throughout the value chain, from areas within our control to those under the purview of our tenants. Our environmental target is to reduce GHG emissions intensity by +40 percent by 2030 compared to our 2019 baseline levels (for Scope 1 and 2) and to commit to measuring and reducing Scope 3 emissions. We also certified or recertified 45 of our properties in 2022, with our green portfolio comprising 53 environmentally friendly properties valued at EUR 2.6 billion. I am delighted that 89.8 percent of our standing commercial portfolio was awarded high-level green certifications. Moreover, all the offices within our portfolio have received the WELL Health-Safety Rating, and several other properties have received additional certifications. However, sustainable development is not merely restricted to green buildings. Our comprehensive approach to ESG was further acknowledged by Sustainalytics, where our “Low Risk” rating improved to 13.9 (compared to 14.8 last year and 16.0 two years ago) and MSCI, where we’ve maintained our “A” rating. Additionally, we have continued to support our communities, having conducted over 15 initiatives in Romania and Poland. But while there’s pronounced interest among office tenants, we’re also seeing a growing awareness in our light-industrial portfolio, even though specific ESG requirements might differ.

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