The experts of Bratislava Property Forum 2022 shared their thoughts on how investment strategies should adapt to the unexpected difficulties drawn by the war in Ukraine.
All speakers of the first panel agreed that the economic “winner” of the last decade is undoubtedly logistics and e-commerce and COVID-19 has further accelerated the sector’s growth. Nevertheless, the energy crisis and the war with all its humanitarian and economic aspects, have created an entirely different situation to which market players have to adapt – Property Forum reports.
Office life is here to stay (in an altered way)
The pandemic has also affected several specific trends in the office segment, such as the abundant use of the “home office” and the adaptation of hybrid workplace strategies – as Ján Miček, Senior Investment Analyst in Capital Markets from Cushman & Wakefield, the moderator of the discussion explained.
„It is true that offices are changing and so does the way how people work. The changes are towards some kind of hybrid work, the combination of WFH (work from home) and regular team and personal meetings in the office – Martin Šmigura, Director at Wood & Company agreed. However, even in these times, experts forecast that offices will not die.
Vladimír Bolek from IAD Investments noted that some companies allow 2-3 days of working from home, some want more people in the office but at the same time offer them various services and possibilities. Companies are now trying to discover the right approach, how to organize work, how to take care of the space and how to take care of employees. This trend creates the opportunity for landlords to act more as business partners for tenants too.
Economic aspects of rental growth
The experts on stage also discussed the different aspects affecting the real estate market – the current rise in energy, materials and other commodity prices, the construction of new buildings, and how the growing costs are reflected in rental growth.
“Historically, in the past, construction costs were always rising. If you look back many years, there’s rarely a year when construction costs are not rising faster than the headline inflation” – Dejan Mansfeld-Rupnik, Managing Director of ECE European City Estates Group, briefly summarised. He expects to see, in combination with the lack of labour and the lack of availability of materials, a strong impact on the developer side.
According to Mansfeld-Rupnik, office rental growth in the last 10 years often did not even cover inflation. But because construction companies can no longer cover the rising costs, this will change. “Given these negative developments over the past decade, more than two years of the pandemic and now the war in Ukraine, we will have to consider much more carefully how to finance low yield investments” – the Managing Director concluded.
Photo: Bratislava Property Forum 2022