Ilias Papageorgiadis' blog | Local real estate market looks to green ...

Works on the Willbrook Platinum Business and Convention Center ? an award-winning project developed by Willbrook International in northern Bucharest ? have been completed and the venue will be officially opened this week. Daiana Voicu, the company?s managing partner, talked to BR about the project and the future of environmentally friendly buildings on the local market.
Simona Bazavan

What can you tell us about the Willbrook Platinum Business and Convention Center ? why is it a green office building and what exactly makes it green?
Green technology implementation is based on two important aspects in the life of the building: water and energy efficiency.This improves the quality of life for people working in the building while saving operational costs by as much as 35 percent.
The water efficiency program endorses smarter use of water, inside and out. For the energy efficiency program we have implemented different technologies such as free cooling chillers that utilize the low outside air temperature for chilling the water in the process of air conditioning as well as solar panels for naturally producing hot water and smart lighting fixtures with natural light sensors and dimmers. The terraces of the building are covered with high SRI gravel which acts as a direct sunlight barrier reducing the heat waves penetrating the building. The optimized curtain wall fa?ade? improves the working environment by allowing maximum natural light penetration with minimum heating factor. The building is at present undergoing the certification of a Gold rated Green Building by LEED (Leadership in Energy and Environmental Design), an internationally recognized green building certification system, providing third-party verification.
Willbrook Platinum Business and Convention is located in the north of Bucharest and combines a triple A quality office building with a state of the art convention center. It required an investment of around EUR 100 million and will provide a high-end facility for office space, the organization of events as well as business meetings.
There are 2,400 seats available in 12 conference rooms, with two large halls that have a capacity of approximately 300 seats and the Mahogany Court which will be able to host up to 1,000 guests. We can host almost every type of event, from business to personal.
The project has won two awards at the International Property Awards in the UK. These are the Best Architecture (Office) for Willbrook Platinum Business and Convention Center and Best Property Website in Romania for www.willbrookplatinum.ro.
We have also developed an AAA office building that offers the largest rentable area per floor in two buildings connected by a large pedestrian bridge ? 8,000 sqm of open space planning. We have a total of 44,000 sqm of rentable office space, which can be customized to meet our clients? demands in terms of space and rental period. At the moment, the leased area is 10,000 sqm. The target is to have the building occupied by the end of this year. The average rent is between EUR 14 and 16/sqm.

How do you see the future of green buildings in Bucharest over the coming years? Is there demand in the market for such projects?
We expect sustainability issues to become "unavoidable" for the real estate sector. Green buildings currently comprise just two per cent of the market, but we anticipate that such projects will become increasingly sought after as tenants look to cut operating costs and back up corporate environmental and social responsibility goals.
Green buildings have environmental, economic and social elements that benefit all building stakeholders, including owners, occupants and the general public.
This is why potential investors are interested in green buildings ? this will be the future. From our point of view it is mandatory for new office buildings to have some of the green criteria implemented and for this we need the government to be much more concerned about the sustainability issue. Green buildings can reduce energy use by 24 to 50 percent, cut CO2 emissions by 30 percent and water use by 40 percent. Besides that, the business benefits for green are measured in 8-9 percent operating cost decreases, 7.5 percent building value increases, and a 3 percent rent ratio increase.

How has the local office building market evolved since the beginning of the year compared to the same period last year?
Even though no significant economic recovery is being felt and the construction market is still flat, the office market is not saturated and we estimate that next year will bring the need for new office space. In the office sector, rents have bottomed out, after decreasing in some areas late in 2010. This follows a period of very high vacancy rates and reduced take-up.
However, these are beginning to improve and rents are expected to enter a period of relative stability. In Q2 of 2011, prime rent was unchanged for the past several quarters, at EUR 19.5/sqm/month, as the number of incentives continues to be high. The tenants are looking for good locations, large surfaces and facilities. Central locations continue to be preferred by most companies as a consequence of the proximity to other business elements, improved accessibility as well as for the company's image, while northern areas are generally preferred by large surface occupiers and back-office facilities. Regarding the vacancy and occupancy, the city average of vacant space in Bucharest is 16 percent, down from last quarter, while the take-up in Q2 2011 registered a substantial increase of almost 50 percent y-o-y.

You also have projects that target high-end customers. Has this market segment evolved differently?
The residential market was quite badly affected by the crisis, and rental rates declined substantially in 2010 compared to 2008. Our client segment was not significantly affected and we believe that with a proper marketing strategy we will be able to cover the spaces that we have in the portfolio. Romania remains an attractive market and many international companies will open their branches or expand their business in our country. But it is important to have an ongoing dialogue between investors and the government environment, so that together they can find appropriate solutions. Furthermore, the entire region suffers as a result of the economic crisis.
Our main high-end residential project is Oxford Gardens. Its luxury dimension resides in combining a special location with high-class architecture and design, as well as private exclusive services with a total investment amounting to EUR 165 million.
It is a gated diplomatic community complex, comprising 204 villas with a total 95,220 sqm in built up area. Each property is developed on a private plot of land of 400 to 1300 sqm, with large gardens and terraces and with a swimming pool. Residents have access to a 6,000-sqm five-star club equipped with indoor and outdoor swimming pools, fitness and spa facilities, tennis court, restaurant and lobby bar.
The success of a luxury property development is to know the needs of your future clients.?

Is Romania still an attractive market for Willbrook? Has the economic downturn in the past years changed your approach?
At the beginning of July, the Fitch agency improved the credit rating granted to Romania, bringing it back into the category of countries recommended for investments. Although the investment activity in the first half of 2011 was reduced, it is expected that investors? interest will grow. From our point of view, it is unclear when the interest will be crystallized in effective finalized trading. Willbrook is still in the ?waiting? stage, even if the situation of the economy has removed the short-term investors whose sole aim was immediate profit and the speculators. If we look from this perspective, we can say that this is the best thing that the crisis has done for the real estate market.
From now on, we are expecting the market to stabilize, and we want to see development with a higher focus on quality.

What are your development directions for the local market now and for the future?
This year will not be the turnaround year the Romanian real estate industry had hoped for, but it could be a year that could change the shape of the industry for a while to come. In 2011 hope has been replaced with acceptance and the new slogan for all the investors and developers is to adapt or die. We have analyzed the investments made in Romania by all investors and developers and the outcome is staggering: a huge proportion of losses came from buildings in inferior locations or of inferior quality. This is why developers should understand that quality and facilities are the key.
Willbrook has expanded its scope of activity, being truthful to its vision: to become a leading European developer creating high-end lifestyles for demanding clients through integrated services. ?

source: Business Review

Source: http://www.iliaspapageorgiadis.ro/english/2011/10/04/local-real-estate-market-looks-to-green-future/

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