One of the most active developers of Prague’s office market is ready to embrace the digital transformation and is actively looking at new projects and new locations. Alexandra Tomášková, Managing Director of Skanska Property Czech Republic talked to Property Forum about changing tenant needs, digitisation and market expectations.
The requirements of office users are changing rapidly. How are you preparing to meet the needs of a younger generation of tenants?
We are fully aware of a dramatic change of the current workforce´s structure. As millennials and even younger generations are entering the labour market, they are bringing their lifestyle into the current workplace and their high expectations are truly game-changing. Therefore, we aim to develop places that accommodate the new ways of working: flexible, mobile, individualised, yet supporting the team effort. We create smart buildings that need to do both: be technologically advanced and provide pleasant and healthy interiors to stay in. The office reflects the company´s culture and we want to provide our tenants with a place they can be simply proud of.
Could you highlight some of the innovations that tenants can benefit from in your buildings?
Tech-savvy tenants appreciate our personalised app that we develop for each building. From your smartphone you can easily navigate through the building and its services – book the shared e-car or bike, see what events are happening in the neighbourhood, look at the lunch menu, order cleaning services for your clothes, report a defect to facility management and much more.
We also strive for WELL certification of all our administrative buildings starting with Visionary (completed in April 2018). That means our entire Prague pipeline that consists of approx. 100,000 sqm of prime office space both under construction and in preparation. The certificate tunes in with our internal focus on high-quality interiors supporting the employees´ well-being.
What kind of new technologies does Skanska use when developing new buildings?
We use BIM (Building Information Modelling) as the only single point of all digitalised data about the project. BIM is a great help in effective coordination of all professions working on the project, automatically updates all the renderings and calculations whenever new data are entered and provides the complete documentation about the building to the investor, asset and facility manager.
Apart from the application already mentioned, we have just started using virtual reality that makes the decision-making process of potential tenants easier as they can walk through our project virtually. We have our first VR for Praga Studios in Prague 8 Karlín and have received very positive feedback so far.
We can´t stop digital transformation, we can only embrace it. Our motto in this case is the sooner, the better.
What are Skanska’s plans for new developments in the Czech Republic?
At the moment we have 4 projects in our pipeline that consist of approx. 100,000 sqm of prime office space both under construction and in preparation. Currently, we are building Praga Studios, offering 11,800 sqm in Prague 8 Karlín. Apart from that, we returned to Prague 4 Pankrác where we have two projects called Parkview (16,000 sqm) and Key (33,000 sqm). A few days ago, we have successfully sold Visionary in Prague 7 Holešovice to CA Immo, a strong corporate Austrian investor. However, we sort of opened and set up a new business location where we plan another scheme named Port7, q 35,000 sqm mix-used project combining office, residential and retail functions. I am looking forward to it!
Are you worried about oversupply or a lack of rental growth in Prague?
No, I am not really worried about oversupply. The demand is really high and is absorbing vacant space quickly. Moreover, it takes years to prepare a project from land purchase till realisation. This is of course not good for us, developers. The good side of this problem is, however, that the level of new supply coming to market is healthy and gets absorbed quickly. Land prices grow immensely and so do construction costs. Rents consequently need to go up and, luckily, this is supported by the lack of supply and strong demand.
Skanska usually sells its developments. How do you view the current situation on the investment market in the Czech Republic?
The Czech market is recognized as a safe harbour for investors’ investments. Whereas the yields might be reaching the bottom levels, we don’t foresee any major shift in investors’ high interest, stable investment activity (in particular in the office sector) or current pricing. Interestingly, domestic players are having a more significant role than anywhere else in the region. Unfortunately, the lack of top quality investment products remains the biggest concern.