Fulga Dinu, CPI Romania: We’ve Had a Very Fruitful Year in Terms of Office Leasing

Since the beginning of the year, CPI Romania has signed over 35,000 sqm GLA, which represents 20 percent of the leasing activity for the entire Bucharest office market, while attendance in the group’s office buildings in Bucharest has reached 70 percent. Fulga Dinu, country manager at CPI Romania, talked to Business Review about the company’s plans for its local office and retail portfolio, which totals 590,000 sqm, and the trends shaping its operations in Romania.

By Ovidiu Posirca

How is CPI Romania positioned on the local commercial real estate market?

In 2022, CPI Property Group became the majority stakeholder of IMMOFINANZ and S IMMO. The value of the local portfolio comprising office and retail, a hotel, as well as land bank, exceeds EUR 1.5 billion. With this consolidated portfolio, CPI Romania is now one of the top 3 real estate investors on the local market. CPI Romania is part of CPI Property Group, one of the largest owners of income-generating real estate in Europe. With a total portfolio exceeding EUR 23 billion, CPIPG owns leading office platforms in key Central and Eastern European capital cities such as Prague, Berlin, Vienna, Bucharest, Warsaw, and Budapest. The Group also owns retail properties throughout Central and Eastern Europe, along with hotels, residential units, and land.

What is the current structure of CPI Romania’s portfolio?

The company’s portfolio includes several outstanding office and retail properties, as well as a hotel in Bucharest. Our office buildings total over 350,000 sqm of premium space located in attractive hubs throughout Bucharest. Our retail properties, cumulating over 240,000 sqm GLA, are situated both in Bucharest as well as in major cities in Romania.

What is the current condition of the office market, some two years after the pandemic?

The office market quickly adapted to the new social and business environment, but especially to tenants’ new requirements. Though the pandemic was very challenging, it also provided us with the opportunity to be creative and to meet the changing needs. We were very preoccupied by health and safety measures for our tenants, which we continue to address. Additionally, we are a premium partner for tenants, always coming up with flexible solutions to their needs. Furthermore, we saw the opportunity for expansion in other fields and set a trend on the local market: we signed long-term lease agreements with two healthcare providers for the launch of private hospitals inside our office buildings. The first one was Provita, which leased an entire office building in IRIDE and will soon open a multidisciplinary hospital there, and the second was Leventer, which will launch the first dermatology and oncology surgery hospital in the myhive Victoria Park building.

What is your outlook for the office sector this year in terms of demand for quality workspaces?

The market has started to witness changes in terms of where demand comes from, and we believe that opportunities will arise from a large range of sectors.

Just to give you an example, so far we’ve had a very fruitful year in terms of office leasing—both for new leases as well as contract extensions. All in all, we have signed over 35,000 sqm GLA since the start of the year, which represents 20 percent of the leasing activity for the entire Bucharest office market. I would say that we have been successfully active.

In addition, we strive to create the environment and the infrastructure that would allow our tenants to increase the physical presence of their employees across all our office buildings. We also actively contribute and counsel our tenants, based on our extensive expertise, on how to reshape and organise their premises to make them cozy and welcoming. We’re already seeing results, as we have an average presence of approximately 70 percent in our buildings, which is 25 percent above last year’s. Therefore, given the above, my outlook is very positive.

What kinds of investments are required to upgrade the old stock of buildings under ESG principles?

Our office portfolio is quite balanced in terms of the age of the buildings. As a diligent long-term landlord, we constantly upgrade and refurbish our assets. We have made major investments in recent years in four of our office buildings to not only aesthetically modernise them, but also to replace and upgrade the technical and equipment components. Additionally, we constantly intervene throughout our portfolio with technical solutions that improve consumption and reduce any negative effects.

We are fully committed and aligned with CPI Property Group’s key sustainability principles, meaning promoting a sustainable approach towards real estate development and management; contributing to environmental protection and the development of local communities in which we operate; pursuing a sustainable business model that allows us to achieve our business objectives without placing an excessive burden on the environment; actively managing our assets to continually improve environmental performance, quality, and resilience; and encouraging proactive contributions from all our employees, tenants, and customers to meet all the objectives in compliance with our principles.

As a result, CPI Romania has implemented a number of measures, including the usage of e-car charging stations, green mobility bike stations, extensive LED usage, enlarging green areas, selective recycling, rainwater usage for irrigation—and the list could go on. We are also currently assessing the installation of photovoltaic equipment on our rooftops. And on top of the above measures, all our buildings are BREEAM certified and we are also very active in terms of the social component of ESG, as we are close to finalizing the access4You certification.

What are some of the trends emerging on the local and regional retail markets?

As an experienced regional retail owner, the company has the expertise to address shoppers’ needs and customise their experiences. Our centres are located in Bucharest and in cities with a catchment area of over 200,000 people and offer a varied mix of international and national retail shops, modern dining options, and extensive services and entertainment. We place strong emphasis on an attractive tenant mix, making it ideal for families who value both the shopping experience as well as the entertainment all in one place, a pleasant atmosphere with classy design, plenty of areas to relax, modern food courts, a wide range of services including WIFI, rest areas, baby changing rooms, info desks, taxi stands, and high hygiene standards for a safe stay.

Even though online shopping rates have increased steadily in recent years, especially during the pandemic period, our statistics and results reveal that the on-site shopping experience remains a preferred option. It is therefore our duty to further innovate and improve while also observing social and environmental principles.

What are your development plans on the Romanian retail market?

Consumer habits and expectations are continuously changing and addressing them requires us to constantly rethink our approach. There is always room for new formats or operators with approaches that respond to the ever-evolving consumer needs.

In this context, CPI Romania is constantly investing in the modernisation of its centres to offer customers the best shopping and entertainment experiences. After extensive renovation projects in VIVO! Cluj and VIVO! Baia Mare, we have plans to carry out similar works in some of our malls in order to upgrade them to the latest market standards.

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