Safety rules in office buildings matter a lot in the rental decision – an interview with Adriana Drăgoescu, CEO, RPHI Romania

How has the SkyTower business been affected by the Covid 19 pandemic, in the context in which most companies have gone into telecommuting?

The pandemic has really transformed the working model. Most of them have resorted to teleworking and we see a low degree of presence at the office, both in the Capital and throughout the country. It is a situation that will continue until the vaccination campaign reaches a high level of immunization of the population, which will allow us all to carry out our activities more relaxed.

We have all adapted to the health and social context, and within SkyTower we have implemented all the necessary measures to provide a safe workspace, in a controlled environment. Given the premises, we have quite a few colleagues who continue to come to the office by rotation or according to the schedule established by the companies in the tower.

In terms of occupancy, we have kept a constant of 94% since the beginning of the pandemic, and during the past year, three tenants have maintained their decision to expand through the additional spaces contracted before the pandemic.

What was the strategy taken at SkyTower level to overcome the current situation more easily?

The first measure taken last year was to make sure that SkyTower complies with the prevention and safety rules imposed by this pandemic. It was the premise from which we started for SkyTower to be fully functional and operational and, last but not least, a safe place for colleagues who want or need to be present at the office. Then, we maintained a continuous dialogue with our tenants, in order to respond promptly to any needs and reduce the psychological pressure induced by the pandemic, especially during the lockdown period.

Therefore, we have developed a series of projects and tools to support the SkyTower community, the need for communication and interaction, adapted to the new conditions. In this regard, last year we implemented Spaceflow, a mobile application dedicated exclusively to SkyTower tenants, which offers fast digital connection to a variety of services and facilities, keeping the life of the community vibrant.

Last year we also started the SkyCreatives program, an open-source program for young artists to whom we want to offer an iconic place where they can work and express their creativity. The launch of SkyCreatives is just one step in SkyTower's strategy to support and grow both the arts and business communities.

We also get involved at the social level, through donations and support from local NGOs. For example, to symbolically mark the events or social causes we support, we specifically highlight SkyTower. There are steps that open us to the general public, through which we want to break down the business barriers considered rigid. We want to inspire and be inspired by our community.

Were leases canceled last year?

We have a constant dialogue with our tenants, and during this period the relations have been strengthened even more, in a collaboration through which to cover the new needs imposed by the pandemic. The constant collaboration and communication between us have also been seen in the absence of requests to give up offices or reduce space, in the last year.

How has the demand in the office market evolved in the last year?

We must first consider the degree of use of office space, both in the Capital and in the country, a degree that had several turning points during the past year. The relaxation of the measures at the beginning of the summer, then in September there were moments when the presence of the employees at the office had a recovery, but the statistics show us that they did not stimulate the new rents. There are also good examples in the market, both for contract renewals and pre-leases for buildings completed in 2020 or in the process of completion, especially in the case of premium projects, with a high degree of flexibility, and from here a trend can be seen. which will partially define the office market.

The beginning of this year came with several rental transactions, in premium and/or new buildings, especially in the business area in the north of the Capital. Meanwhile, there are also sublease offers from large companies, with a high percentage of employees working from home. It will be a necessary trend to balance the market until the measures are relaxed.

What are the new features of the 2020 applications?

The pandemic has changed our perspective and needs, and since 2020 the safety norms implemented by office buildings matter a lot to tenants in the decision to rent new spaces. The measures, efforts and strategy of an office building on safety rules will most likely be in the top three criteria in making a decision. Telework has become a constant, and the ability to flexibly and reorganize spaces to provide distance is just as important. In the end, there is no one-size-fits-all solution given that most large companies are guided by global or regional policies, but I think the winning approach will still be a constructive dialogue.

How has the office market evolved in the context of the pandemic?

The local office market had, in 2020, a surprising evolution. While the level of use and the volume of new leases suddenly compressed, in the second quarter, the level of investment increased compared to the previous year. It is true that this context is due to large transactions, even historical for the local context, but this shows us that investors trust Romania and the quality of the local office market.

What are its prospects?

Companies looking for new offices do not now have the pressure of immediate renting and can choose spaces suitable for their needs, while most large companies, which contract tens of thousands of square meters, are already installed and will remain in those spaces in the medium term, the majority of class A. At the same time, there is an accentuation of the sublease trend, which will help to stabilize the office sector.

What is certain is that in the final decision to take over space, the importance of ensuring safety rules and a high degree of comfort will be observed, given that employers and building owners have as their goal the care of the employee.

Are you going to start new projects in this field?

At the moment, the local real estate market presents interesting opportunities, which means that there are investment possibilities.

Regarding the RPHI plans in Romania, our main objective is to continue the development of SkyTower's business and communities, through investments in innovations and projects that support the company's growth strategy on the local market.

More details about Spaceflow in Slovakia: Online Real Assets