What projects is Crestyl currently working on? Has the pandemic significantly affected your development strategy?
From the point of view of offices, we have several current projects. We have the last building under construction in our large DOCK district. Its completion is scheduled for the middle of next year. DOCK IN FIVE will offer approximately 21,500 thousand m2 of office space and retail space. Thanks to the connection of offices with apartments in the immediate vicinity, the place is still alive and the overall unique atmosphere is further underlined by the large amount of greenery and the adjacent river. In this successful project, all completed buildings are practically 100% occupied by tenants, including a number of major companies such as Saint-Gobain, Dame Food, BNP Paribas Cardif Insurance, ASSA ABLOY, LEGO Trading, Publicis Groupe, Henkel and Hornbach.
We are also planning the commercial part of the Hagibor project, specifically the first two office buildings, which we plan to launch this year. Hagibor is a new district that will replace the now neglected area next to the Želivského metro station, where a total of five residential houses will be built gradually, together with six administrative buildings with 110,000 m2 of offices. Everything is connected by a central pedestrian boulevard with shops and restaurants, which leads from the metro, and a square with a multifunctional cultural center. The new Hagibor district will also include a huge two-hectare park. For the project, we acquired the world-famous landscape architect Michel Desvigne for cooperation - he created the concept of a large public space, forming a quarter of the territory.
And thirdly, I would mention the center of Prague, where we are preparing the reconstruction of a historic office building right on Republic Square, as well as the extensive Savarin project. It is located right next to Prague's Wenceslas Square, which, with reference to the tradition of Wenceslas passages, connects with Na Příkopě, Jindřiška and Panská streets. It includes the careful reconstruction of existing historic buildings and the creation of a completely new public space with greenery and open space in the courtyard. Its appearance was designed by the icon of contemporary world architecture and design Thomas Heatherwick and his studio.
Outside Prague, we are launching a completely new multifunctional project in the very center of Brno, which will be built on the site of the current Tesco Dornych building, where, in addition to retail space, a hotel and apartments, we will also build 4 office buildings.
And as for the impact of the coronavirus pandemic on our plans, I believe that the time is coming when the pandemic world will come under control and things will begin to return to normal. Gradually, but they will begin. Given that all the mentioned projects except Dock 05 are in the phase of permitting or preparation for construction, we assume that the effect of the current covid pandemic on our development plans will not be so strong.
How are office buildings doing at this specific time?
In general, the ongoing pandemic has certainly had an impact on a number of planned projects. I do not think that it would lead to their major postponement or even cancellation, rather only a delay at the beginning of construction. There are several reasons - in response to the pandemic, banks are tightening financing conditions, causing only buildings with sufficient pre-leases to enter construction. The limited functionality of the state administration also extends the deadlines for obtaining all the necessary permits. Some projects, which are currently at an early stage of development, may be stopped until it is seen how the office market will start to behave after a pandemic. The current pandemic may thus have an impact on the short-term shortage of new offices in the future. However, clients will increasingly search for workspaces according to the latest standards, corresponding to the changing priorities of employees. There will never be enough such buildings because their planning and construction or redesign will always be behind the changing needs of tenants over time. Interest in state-of-the-art offices will continue.
What surprised you in 2020?
The whole situation related to the coronavirus epidemic is something completely unprecedented for everyone around the world. Last year was a really big challenge and for many companies, it started big changes in the perception of what clients expect. I think that has moved us all further in our own development.
If I take it from a business point of view, the consequences were rather secondary - the extension of the administrative steps and the difficult situation on the construction market caused by the lack of labor from abroad postponed us by several months, for example, the construction of the last office building in the DOCK project. On the positive side of the lockdown, for example, we tried new methods of selling and presenting real estate, found out what works, and now we are digitizing much of our business process.
How is your office building different from other buildings of other developers on the Czech market?
We believe in the mutual synergy of housing, offices, and retail shops, here we see great potential, which we can use very well. Therefore, we primarily focus on creating projects combining multiple functions in one place together with leisure activities. Thanks to this connection, we are able to invest in the surrounding infrastructure, ideally in cooperation with local governments and associations so that it makes long-term sense. Therefore, for example, in the already mentioned DOCK project in Prague's Liben, we are currently completing a park of one hectare directly in the area on the river bank, which will offer relaxation in greenery with water features and benches, as well as the possibility of sports. In addition to the fitness center, athletes in the Dock will also appreciate the special tartan running track around the entire complex, which is also connected to the city's running and cycling trails leading to the city center and Troja. Of course, there are facilities in the form of showers, changing rooms, and places to place bicycles directly in the building. Thanks to the presence of water, tenants can also use the possibilities of our Dock Marina Club. We know that office workers will appreciate such things.
View of the DOCK district (Photo: Crestyl)
Why is the diversity of the workspace so important?
For employees, any "well-being" elements are very important. Especially now, after working most of the time from home, people need to be motivated. They have to want to go to the offices because, in addition to the appropriate work environment and functional design in the company itself, they will also find opportunities for an efficient and pleasant non-working time in the building and its surroundings.
Have you noticed any significant changes in office price movements in the last 12 months?
We haven't noticed. The main reason is that most institutional leases are concluded for a period of at least 5 years, so the market does not react very quickly.
What are the trends in current office construction? Do you notice other requests from customers regarding office space?
Personally, I assume that the vast majority of employees will again work mainly from offices, with the exception that, compared to the times before the pandemic, they will be able to freely use part of their work capacity for work from home. This will connect a common and remote work environment, not in terms of necessity, but of choice. Working from the office will prevail in most fields because it has undeniable advantages over teleworking - teamwork, innovation, transfer of experience, involvement of people, and undeniable productivity. This will change the design of the work environment, creating hybrid jobs. Part of the jobs will be shared, the collaborative part for agile teamwork will take up more space than before. There will also be decentralization of offices and diversification of locations - people will work in more places so that they do not waste so much time on relocation. The new trends will also support the further growth of co-working offices, which companies will also use to cover temporary needs. Changes in the work system will also be supported by new technologies - they will play an even more important role in connecting the digital and physical worlds so that employees can "switch" more effectively between the physical office and teleworking.
Do you think that the current situation will change the strategy of tenants in terms of m2 needed for the future?
In the future, we must expect some reduction in the needs of companies for expansion, but in the case of normal economic development, this will be offset by the growth of new demand. In the end, I do not anticipate dramatic changes.
About Crestyl
The Czech development group CRESTYL is the market leader in building multi-purpose projects - residential, commercial and office real estate, which are connected into one perfectly functioning and lively unit.
