The myhive office brand has been anticipating the hybrid work trend, with high-quality spaces and complementary services expected to drive the market, says Fulga Dinu, Country Manager Operations at IMMOFINANZ Romania. With a local portfolio of EUR 780.8 million in the office and retail segments, the developer is seeking new market opportunities and constantly investing in adapting its properties to emerging trends.
By Ovidiu Posirca
What is the current structure of IMMOFINANZ’s portfolio in Romania?
We are proud to have top active properties in Romania in our portfolio, including 8 office buildings and 5 retail properties, with a high occupancy rate of 91.2 percent. Our portfolio comprises 41 properties and has a carrying value of EUR 780.8 million, representing 15.4 percent of the company’s international portfolio.
How developed is the myhive concept in Romania? How many office buildings have implemented it, and do you have other investment plans with myhive?
The myhive concept has proven very successful in Romania, and at the moment our portfolio includes 5 myhive office buildings. Last year we finished rolling out the myhive brand in two new buildings, namely IRIDE | eighteen and IRIDE | nineteen. Earlier this year, the myhive IRIDE | eighteen building was fully leased for a 25-year term to Provita, a healthcare provider that will develop a multidisciplinary hospital with a capacity of 110 beds and seven operating rooms.
Towards the end of this year, we will begin refurbishment works for the Victoria Park building, which will also be converted into a myhive building.
And most importantly, next year we will start the modernisation of Bucharest Financial Plaza, which will become the flagship myhive building in Romania.
How long did negotiations take for the full lease of the IRIDE | eighteen building? Has the pandemic had an effect on leasing terms?
Several companies have expressed interest in renting out space in the IRIDE | eighteen building. The Provita project was of interest because it allows the integration of many of the works in the reconfiguration process. It also involves adapting some spaces to the future functions which are specific to a hospital unit. Provita was convinced by our offering of flexible building layouts, which allow rapid adjustments to meet new requirements, as well as by the efficient transport connections.
Iride Park, one of the largest office hubs in Bucharest, has already gained an excellent reputation thanks to its wide variety of services for tenants and neighbourhood residents. The partnership with Provita will increase the location’s attractiveness over the long term.
What are some of the most important transactions closed by IMMOFINANZ in the first half of 2021 and what is the outlook for the rest of the year?
IMMOFINANZ continued the strategic expansion of its flexible international myhive office brand, as announced, and acquired the Bucharest Financial Plaza office building from Erste Group subsidiary Banca Comerciala Romana (BCR) in the first quarter of 2021. Development plans for the building include its modernisation and conversion into a high-quality, green myhive building with a “Gold” sustainability certification at a minimum. The gross rental space is expected to total 27,700 sqm after the refurbishment. The transaction was closed on March 23, 2021, with an approximate value of EUR 36 million.
Furthermore, leasing the myhive IRIDE | eighteen building to Provita for a 25-year period was among the most important transactions for us this year.
We will continue to pursue opportunities on the markets in which we operate, which will allow us to expand the myhive concept for office buildings, as well as our retail building portfolio.
What are your expectations regarding the Bucharest office market in terms of demand and occupancy rates? Does the relationship between tenants and office building owners need to be more flexible?
Flexible working and home offices will continue to be in great demand. Nevertheless, the home office will never completely replace the office workstation, as the social and personal interaction aspects are particularly crucial for innovation and productivity in companies. There is still a significant share of employees who say that they find it more difficult to stay focused or motivated at home and to perform their tasks adequately or that they feel less connected with their colleagues. Therefore, there will be continued demand for high quality office space and it will be very important to focus on tenants’ specific needs.
Flexibility and community play a central role here. Of course, in the medium and long terms we may see changes regarding the types of spaces requested by each customer.
As companies continue to search for modern office space to provide employees with the best working conditions, employers will place greater emphasis on quality and on complementary services, which is why we will continue to invest in implementing the myhive concept in our office buildings. Our myhive office brand has been anticipating the hybrid work trend, offering flexible and tailor-made office solutions and an overall upgraded office experience. We are currently exploring another level of customisation, providing tenants with more flexibility in contract terms in order to accommodate fluctuations in their office space needs, “all-inclusive” rental services or relocations within the myhive portfolio. This product has already been implemented successfully in Vienna and Warsaw, and we are currently working on its implementation in myhive buildings in Bucharest.
Have Romanians returned to shopping centres in large numbers? How has IMMOFINANZ adapted the shopping experience in its centres in the past year and what is next for this segment?
We are seeing more customers returning to our VIVO! shopping centres, and the footfall is recovering. The health and safety of all our shopping centre visitors and employees remain our top priorities.
Notably, the visitor frequency in our STOP SHOP retail park in Botosani has very quickly returned to pre-crisis levels. The low-cost convenience concept has once again proven successful during the covid-19 pandemic, as customers have been more price-aware.
What are IMMOFINANZ’s planned investments in the retail field?
We announced the start of refurbishment works for the VIVO! Baia Mare shopping centre on June 1. The process will bring new tenants to the centre’s portfolio and will cover a total area of more than 10,000 sqm, equivalent to one third of the gross leasable area of VIVO! Baia Mare. The project is due to be completed in the fourth quarter of this year.
What are some of the economic sectors generating demand for office and retail buildings in your portfolio?
Demand for high-quality office space is coming from various industries. In the office segment, IMMOFINANZ managed to attract a significant number of tenants from the service providers’ area in 2020, especially from the medical, food, and delivery segments.