Current market conditions encourage selected investors to look for properties with hidden potential to generate additional value. Older office buildings often do not meet the requirements of modern space users who need friendly infrastructure adapted to pedestrian traffic and functions complementary to the needs of both tenants and local communities. Frequently, the dominant function in the external areas around such real estate is the function related to road transport: roadways and parking spaces are marked out at the expense of pedestrian spaces, as well as at the expense of space for services and retail, which need an appropriate volume of pedestrian traffic, and this directly translates into the value of real estate. About the principles of increasing the value of office real estate say: Wojciech Zawierucha, COO of CERES Management Services, which managed the redevelopment and repositioning of office projects in Kraków, Bucharest and Prague, and Piotr Chojara, co-founder of the MODO Architektura studio, whose achievements include numerous renovation, redevelopment and changes in the function of both historic properties and buildings erected in the last dozen or so years.
Discovering the potential
Older properties often have a common denominator: a convenient location on the city map. They were erected at a time when car transport was crucial for tenants, and public transport, still poorly developed at that time, did not guarantee an easy way to the office. However, times have changed, and planners and urban planners have recognized the need to expand the urban transport network. Alternative forms of transport have also become popular, such as city bikes or electric scooters, which, on the one hand, free cities from crowds and traffic jams, and on the other: the choice of these alternatives reduces emissions and improves air quality. “In addition, changing legal conditions will force property owners to modernize their systems to reduce the emissivity of buildings, and this involves significant expenditures that many owners will not want to incur. This may result in listing certain properties for sale and, for example, using the lease back option, whereby the current owner of the property will sell it but will remain its user on the basis of a long-term lease agreement, and the need to modernize and manage it will rest with the new owner” – says Wojciech Zawierucha from CERES Management Services. “Such treatments require capital and often the need to generate additional cash flows by the property, and this can be achieved by converting part of the space and allocating it to functions that generate higher revenues” – emphasizes Wojciech Zawierucha.
Older real estate and climate
“Traditional functions present in office buildings are no longer sufficient. The factor that triggers new potential in older properties is the conversion of some of the interior and exterior surfaces of buildings in such a way that they are focused on the well-being of users and provide them with the greatest possible comfort of work and life” – says Piotr Chojara from the MODO Architektura studio. “The use of existing buildings and their reconstruction in a way that meets the current expectations of city dwellers is also a solution in line with the spirit of sustainable development: it allows neglected urban areas to be brought back to life and give them additional, long-awaited social functions: to create meeting places, comfortable work and spending free time in a friendly environment” – emphasizes Piotr Chojara.
“Redevelopments and extensions of existing real estate also reduce the number of new constructions, the creation of which has an incomparably greater impact on the natural environment and rationalizes the resources of real estate and the urban infrastructure necessary to service them, making the city more liveable with a smaller ecological footprint.
Older real estate is often a deeply hidden value in urban space resources. Finding and rediscovering them requires knowledge, experience and cooperation of many entities with various specializations, such as architecture and urban planning, social sciences, or business and finance. Bringing their potential outside allows us to achieve exceptional results both for the users of the space, the city and its inhabitants, as well as investors by generating measurable added value” – emphasizes Wojciech Zawierucha. “In the case of the renovation and repositioning of the Apeiron building, an office building located in the center of Prague in the Czech Republic with a leasable area of 12,000 sqm. we replaced building installations and elevators, raised the standard of common areas and comprehensively changed the facades. We also directly increased the value of the building by converting the space and introducing an additional 500 sq m to the market. of retail space on the ground floor of the property” – enumerates Wojciech Zawierucha from CERES. “Apeiron also serves important functions for the city. A pedestrian communication route connecting two streets runs through the interior of the building. The challenge we had to overcome was also the need to ensure comfortable work for office tenants during renovation and revitalization works because we were conducting surgery on a living organism. During the modernization, the building was not taken out of use, and the property manager organized regular meetings with tenants, informing them about the progress of works and the solutions used to reduce their nuisance” – emphasizes the representative of CERES Management Services.
“Older office buildings are always a challenge for architects. When dealing with such projects, we must remember the image of such places already functioning in the minds of many residents. To effectively reposition properties and give them a new value, also social, we must propose a plan that will not let people pass by them indifferently. We should also remember the history of such places and include it in our plans to build new quality and unique user experiences on it. This can manifest itself both through architectural changes and the introduction of new functions and new formats that directly affect the cash flows generated by projects” – says Piotr Chojara from MODO Architektura. “A very important element that often makes a huge difference in the final perception of such a property by users are the details that, on the one hand, improve the usability of the space, and on the other hand, often make the space unique and provide a unique experience of using it, and even just staying in it. This is very well illustrated by the project that we had the opportunity to implement in Kalisz, which included the adaptation of the historic buildings of the former A. Fibiger piano factory for the modern Calisia One business complex with a total usable area of over 10,000 sq m, where the Hampton by Hilton hotel operates, as well as office and service spaces” – sums up Piotr Chojara.