Hot on the heels of its successful completion and leasing of Lakeside Park II, Immocap racing to complete another office project, The Mill. The developer pre-leased 60% of the 25,000 sqm project even before construction began last year. Today, says director Martin Šramko, he has commitments for more than 80% of the space. For all the talk about a weak leasing market, he says Immocap isn’t experiencing difficulties in the so-called age of home office. “Even in The Mill, we have one who is already interested in more space and in Lakeside Park, Innovatrics took another 2,500 sqm.”
Not that he thinks demand is as strong as it used to be just a few years ago. The pull-back is serious enough to cause some of the biggest office developers in Bratislava to cut back or even cancel their office divisions. But for a company like Immocap, whose aim is to build a modest 20,000 sqm per year, the exit of major competitors presents an opportunity. “I think somebody has to deliver new offices to the market,” he says.
“We see a positive trend, generally. Corona is more or less over, companies want new spaces, so it makes sense to create more technologically advanced projects now. There are many new trends we follow connected to sustainability, using wood in construction, greenery, or energy efficient solutions. This can bring a competitive advantage over older buildings. I don’t see a reason not to build.”
That being said, Immocap is also jumping into the residential market, with five projects in the works. I asked Šramko if these weren’t projects he originally envisioned as office buildings. He rejects the idea, insisting that Immocap never buys land for an office project if he isn’t sure it’s an office location.
Construction on Immocap’s first resi project, a 20-storey building with 180 flats, is scheduled to start next to The Mill later this year. Another, which could also get going in 2023, is a 90-unit project in Ružinov. In all, the company has a pipeline of 1,500 units, all of which are intended for sale.
Immocap has grown in recent years, but with just over 35 people on board, Šramko says it’s reached a size that matches its ambitions. “We’d like to stay at around 40 people, because we’d like to create a nice culture for people to work in. Now we’re more or less an established team.” The push into the residential market is a way for Immocap to diversify its product line, without changing its geographic focus. “We want to be active in the center and the wider center, not on the outskirts of Bratislava. In some parts of the economic cycle, residential is more favorable than offices and in other years, it is opposite. I think we’re seeing the fruits of this strategy already.”
Is he worried about the near future? As a developer, after all, Immocap prefers to sell rather than build up a portfolio. Šramko is realistic about what’s coming. “You can buy U.S. treasuries for 3.5 – 4% and interest rates are going up, so it’s hard to say what will happen,” he admits. “But everything has to stabilize at some point. We want to create buildings that we won’t be under pressure to sell because it produces a stable income. And if the opportunity comes, then we can sell…We’re well-prepared to survive if the coming years are tough, which they could be.”
“It’s important to look for the opportunities and challenges in this period and just try to be smart, lucky and wait for the change of the cycle.”
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