BUSINESS

Kharkiv is a Silicon Valley of Ukraine and the City of opportunities. Our city combines the best choice of IT universities and IT schools in Eastern Europe, world-famous IT companies and a favorable environment for the development of IT.

Author:

Executive Director, Kharkiv IT Cluster

Our convenience and comfort of a well-designed space increases considerably with properly chosen lighting, colors of walls and floors, access to daylight, comfortable furniture that can adapt to our individual needs and add-ons. At the time of renovating and designing of a new office space we often forget of one crucial element that helps us at work – a coziness that we can achieve by virtue of well-thought-through add-ons. These little helpers are often relegated to the background. We do not want to invest in them "because it is an additional cost", “because it is something small that nobody will notice anyway". I would like to debunk this myth and show how important a role of additional accessories really is in our daily lives.

In our homes, we surround ourselves with all sorts of extras – we add scarf to our stylish jacket, tie or jewelry, why not do the same in our offices? Accessories are not only a lamp on a desk or a frame with a photo of your beloved pet. Additions are also pillows, curtains, carpets, figurines, fruit bowls or plates on which to hang not only information about the meeting, but also an interesting newspaper clipping, a piece of cloth or lost pendant.

At a low cost, we can get rid of the mono tony in our daily work and increase the satisfaction and creativity of our co-workers.

Increasingly important for us is not only the job position we hold and kind of company we work for, but also an appearance of an office where we will spend most of the day. The more elements that create a pleasant atmosphere around us, the better we feel and the easier it will be for us to perform our everyday duties. By placing colorful carpets and pouffes in the space of the creative department, we will show employees that we expect non-standard solutions from them, such as working not necessarily at the desk, but on the carpet surrounded by pillows. Don’t you know at least one person who keeps photos, pins, flowers or other things on its desk in the office? This proves that we need to beautify and "soften" our spaces. We work better surrounded by objects that make us feel at home.

Some extras can tell a story about the industry in which a company operates. If the office dealing with jewelry simply add gold frame with beautiful graphics that will emphasize luxury tone of the interior and products sold. In the office of the company dealing with the production of bicycle equipment display parts of the products sold on the shelves or racks. Each type of decorative accessories positively influences the perception of our company. However, we should remember that the accessories should be compatible with the given space.

Thanks to some add-ons, we can make an easy metamorphosis of our interior design. Changes are something important and enhance our creativity. Every little change in our everyday environment stimulates us. The same refers to space and the modifications associated with it.

We can change the pillowcases on the pillows replacing summer pillowcases with autumn ones, collect a few chestnuts on the way to work and pour them into a golden bowl standing on the coffee table by the reception desk. Insert old newspapers cuts into the frame or suspended paper airplanes under the ceiling.

Additions give us the opportunity to play and quickly transform our office into a completely new place.

The trend of introducing plants into the interior has been around for a long time. Plants soothe us with their color and form. They produce oxygen, invigorate space and support our work. The list of the positive effects plants have on us is very long. Do not forget that they are perfect additions to our offices. Their diversity will allow us to create an unusual and cozy space in any place. Plants do not have to be put traditionally on the windowsill or cabinet. We can choose various types of standing or hanging pots for them. Place them on special stands or arrange plant compositions of different heights yourself.

There are many solutions on the market that will help us to display the plants in our office in the best possible way. The same applies to cut flowers. Each bouquet will attract the attention of even the greatest opponents of plants. A vase will be the perfect highlight for the flowers, and it can also have various forms and colors. Let's look for interesting solutions while decorating our office. Plants are always a good choice when it comes to decorating the space.

TEXTILES

Introducing various types of textiles into the interior is a reliable way to “soften” and make the space more pleasant. We are more likely to sit on the couch with pillows and blankets. We will have a nice conversation in the room with curtains, even if their purpose is not to cover the window. The curtains are placed not only to darken the office space but they also isolate the room from external sounds. They are ideal additions introduced to calm the general compositions of the office site. Another advantage of textiles is that they can be easily changed, and thus we can change office decoration according to our current needs. Let's not forget about typical office accessories. Every employee needs a pen, pencil or adhesive tape. They do not have to be hidden in a drawer or in a cardboard box at the bottom of the wardrobe. We can put them in specially designed containers, compartments or, for example, colorful pots. Maybe it is sometimes worth to find a non-standard solution and toss pins into the water jug? Instead of tangled cables for charging phones, put an induction charger and a small succulent plant in a cup? Let's not be afraid to experiment and look for interesting solutions. Our office doesn't have to be boring. It can inspire us and show that we can solve

many problems in an unusual way. Let's play with add-ons. Not in an obvious way, let us create new compositions. Let's encourage our co-workers to change the space they work in. If we allow additions to stay in our offices for longer, they will pay back with all they have best in them. If you do not feel strong enough to introduce yourself to home accessories try to engage the decorator or inte-

rior designer.

Author:

Home Furnishing Consultant at IKEA Blue City

Monopolis was due to be presented with the real estate ‘Oscar’ won at the MIPIM Awards 2020 – a prestigious global competition gathering all participants of the real estate market.

According to experts of global real estate services firm Cushman & Wakefield, this year’s total volume of transactions is expected to reach EUR 9.4 billion in Central Europe, which will represent a one-third decrease on last year’s figure. Poland’s share in the total transaction volume – albeit down by one-fourth compared with last year – will hit approximately 60%.

– Generally, 2020 is ending on a positive note despite renewed lockdowns as the vaccine roll-out is a promise of a more normal market in 2021 – says Soren Rodian Olsen, Partner, Head of Capital Markets, Cushman & Wakefield.

The Polish commercial real estate market got off to a flying start to 2020, with EUR 1.72 billion worth of deals, which was the second best result in the first quarter of a year on record. Investment activity slowed afterwards due to the uncertainty caused by the pandemic, but buyers adapted their strategies to the new situation, which prevented a massive drop in the total annual volume. It is worth noting that 2019 was one of the three most successful years in the last decade, which makes this year’s decrease in investment activity slightly more pronounced, with Poland posting the smallest fall in the region.

Transactions in Poland were dominated by the sales of industrial properties, accounting for almost half of the total volume. More than 39% of all deals took place in the office sector.

– At EUR 5.6 billion, Poland’s investment volumes are 25% down on the all-time record in 2019. Retail has hit a 10-year low whereas office investment activity slowed due to investors taking a more cautious approach towards large deals. Logistics ended 2020 at a record high of close to 50% of the total volume – comments Jeff Alson, CE Partner, Capital Markets Group, Cushman & Wakefield.

CZECH REPUBLIC The overall volume of transactions in the Czech Republic will reach approx. EUR 1.2 bn this year, which means a 63% decrease compared with very successful and better-than-average 2019.

SLOVAKIA In 2020, the COVID-19 pandemic sus pended ongoing transactions and temporarily dampened new investment demand, which, together with growing retail and office saturation, caused a 37% year-on-year decline in transaction volume to EUR 429 million. HUNGARY Whilst Hungarian investment levels were down 25% year-on-year, this follows four of the five strongest years on record and is still 40% above the strongest year achieved in the 2008-2015 period.

ROMANIA The Romanian investment market weathered the impact of the pandemic well, with total investment volumes reaching almost EUR 1 billion, mainly driven by office transactions. This is in line with average annual volumes over the past 3 years and suggests that the market has matured in recent years. We expect the liquidity momentum to carry over into 2021, with the industrial sector becoming a major focus.

Cushman & Wakefield experts predict that while full economic impact may take 1–2 years, there is sentiment for the real estate market to bounce back more rapidly in Q2/Q3 2021. Investment focus in the office sector next year will mainly be core and value-add assets, while logistics and alternatives (PRS, data centers) will continue to be the primary focus of most investors.

– Some investors will not look beyond major gateway locations despite higher prices but an increasing number of funds are seeking opportunity in a broader range of markets, including CEE. Core yields are likely to compress in 2021 but only in leading markets and for 100% core product – comments Soren Rodian Olsen, Partner, Head of Capital Markets, Cushman &

Wakefield. Belief in the future of offices is stronger than in Q2/Q3 2020, which is positive, but general leasing trends for 2021 remain an area of uncertainty.

The Gerald Eve International Alliance of real estate advisory firms, which AXI IMMO is a member of, has prepared a guide of key industrial and logistics markets in Europe. The publication presents prime market rents in 77 locations across 20 countries, split into big box, medium box and SBU (small business unit) facilities, as well as market yields in those locations. Moreover, experts from 20 member countries of Gerald Eve prepared unique data on prices of investment land for industrial and logistics developments in 56 key clusters. Poland remains one of the most attractively priced markets in Europe. This is where all 5 of the cheapest European markets in terms of big box rents are located. Moreover, 4 out of the 10 most affordable logistics locations in terms of land prices are also in Poland.

INVESTORS BET ON WAREHOUSES The industrial and logistics sector across Europe is benefitting from the ongoing growth of e-commerce. The COVID-19 pandemic has additionally accelerated this trend, leading to heightened demand for warehouse space.

Resilience of the sector to the economic shock caused by the COVID-19 pandemic has resulted in increased investor demand. Investors have withdrawn capital from segments of the markets whose prospects have deteriorated, such as shopping centres, and reallocated it to logistics and industrial facilities. This has led to increases in capital values in the sector, and consequently – to yield compression in many markets. Logistics yields remain the lowest in the United Kingdom, which is considered to be the most mature and liquid commercial real estate market. Net yields in London stand at 3.5%-3.75%. Yields on offer in Germany are also low, between 4 and 4.5% in key markets, reflecting the perception of the country as a safe and stable investment destination. Warsaw, which is the most expensive logistics location in Poland, offers gross yields of 5.5% for SBU units and 6.25% for big box facilities. POLAND AS AN ATTRACTIVE DESTINATION FOR OCCUPIERS Prime headline rents for big box units in Poland are relatively unified across the key markets, with EUR 3.3 – 3.5 per sqm per month achievable in Poznań, EUR 3.2 – 3.6 in Central Poland and Upper Silesia, EUR 3.3 – 3.6 in Lower Silesia and EUR 3.0-3.6 outside of Warsaw. These rates are among the lowest in Europe. In fact, according to the data comparison prepared in cooperation with Gerald Eve, five largest Polish industrial and logistics markets are also the five cheapest markets in Europe.

To put it in perspective, prime logistics and industrial rents in Germany’s most affordable market included in the report – Cologne & Dusseldorf – stand at EUR 5.7-6.2. Meanwhile, A-class warehouses in the most expensive German market – Munich – fetch monthly rents of EUR 6.5-7 per sqm. There is an even wider gulf between Poland and the United Kingdom and Scandinavia. The most expensive location included in the report – Greater London – is recording prime monthly logistics rents as high as EUR 11.3 per sqm. Oslo takes the second spot with EUR 10.4 per sqm and Helsinki comes third with EUR 10 per sqm.

The situation is similar in the SBU segment of the market. Polish cities take the first four spots when looking at the most attractive urban logistics rents in Europe. Warsaw stands out somewhat from the rest of the country, however. SBU rents in the capital are significantly higher compared to other Polish markets, between EUR 4.0 and 5.25 per sqm. Warsaw is experiencing rapid growth of the e-commerce sector, which is translating into high demand for last mile facilities. A location close to the consumer, with access to strategic road infrastructure is necessary for such schemes, but availability of such sites is limited and competition is intense, also from other property sectors. This is exerting upward pressure on rents in this segment of the market.

Warsaw is nevertheless an attractively priced urban logistics location in a European context. Occupiers seeking modern urban warehouses in the London region are facing monthly rents of EUR 9.2 – 22.1 per sqm. Prime SBU rents in Germany range from EUR 6.7-7.2 in Cologne & Dusseldorf, EUR 7-7.5 in Frankfurt and EUR 7.2-7.7 in Berlin, through to EUR 7.5-8 in Munich.

INVESTMENT LAND A unique element of the report prepared in cooperation with Gerald Eve is international data on transactional land prices for industrial and logistics developments. The publication includes information on prices of investment plots in key logistics clusters in 56 markets. Poland looks attractive on this measure as well. Only the South Moravian region in Czechia and Eastern Slovakia offer investment land prices below those available in the cheapest of the main Polish markets – Poznań. Prices in Warsaw-city far exceed the levels recorded in the rest of the country, with as much as EUR 1.5m per hectare achievable, and more for selected plots. Nevertheless, investment land in Warsaw is 5.5 times cheaper than in Greater London and 2.7 cheaper

than in Munich.

We are entering 2021 with a pandemic. How has the coronavirus impacted the office industry, why will offices still be needed, and what is the importance of the business services sector to developers? Katarzyna Zawodna-Bijoch, President and CEO at Skanska office development in CEE, and Arkadiusz Rudzki, Executive Vice President Leasing & Sales at Skanska office development in CEE, describe the changing role of the office in an interview with “Outsourcing&More”, and talk about what awaits us in the future.

Katarzyna Zawodna-Bijoch: Today we know for sure that a lot has changed. We cannot fully predict the full consequences of the pandemic. There are areas of the real estate market, such as hotels and shopping malls, that have been hit hard by the lockdown and the second wave of the pandemic. As for our part of the market, some speculations have emerged that question the legitimacy of offices. Last spring, the concept that the home office is fantastic and regular offices are completely unnecessary began to gain popularity. The following months of the pandemic, however, clearly showed that we will still need offices, and even those technological giants who loudly proclaimed the end of offices agree with this today. The lack of direct interaction with colleagues has a negative impact on both employees and employers in general. More and more often we are hearing about problems with people’s well-being and mental health, especially among younger employees. Repetitive and simple processes can be easily done from home, but creativity, diversity and team spirit need a space that cannot be created by Microsoft Teams or Zoom.

Arkadiusz Rudzki: The theories at the start of the pandemic that offices would no longer exist were greatly exaggerated. Yes, the frequency of remote work will increase. We will work in a mixed, hybrid formula, but it is not possible for offices to disappear completely. They play very important roles: social, culture-forming and also formal. For most companies, the office is part of building a brand as an employer, but also a brand in general, because offices are meeting places – including with clients. I want to emphasize that there has been a change in the approach to the office, which the pandemic has only significantly accelerated. Increasingly, companies will be switching from the ‘you have to come to the office‘ approach to ‘I want you to come to the office’. This change will have a significant impact on office spaces in the future.

KZB: At this time during the pandemic the most important thing for employees is to feel safe – this will encourage them to come into the office. Air quality in the office space is very important, as are as many non-contact solutions as possible, and arranging the office in such a way that it is possible to maintain social distance. Last spring at Skanska we developed and implemented, first in our offices, and later also advising clients, the most important rules for returning to offices and functioning in the new reality. In addition, we have created, in close cooperation with architects and epidemiologist, the Care for Life Office Concept, which addresses epidemiological safety in many ways, from quick actions in already existing offices, through design guidelines for newly planned spaces, to system solutions that can be addressed during the construction of the building.

AR: From the safety perspective, re-organizing work in offices is also very important. In our offices, we reduced the number of workplaces in order to increase the social distance between people working in the office, and we reduced the number of people simultaneously using common areas and conference rooms. We have also designated special rooms intended only for meetings with external clients. Thanks to the Connected by Skanska application, easily available on a smartphone, which has been used in our buildings for the past several years, people can move around the building and office without contact. We are pleased that these actions were recognized by the WELL Building Institute (IWBI) with new WELL Health-Safety Rating certificates for our 9 buildings throughout Central and Eastern Europe. This distinction is awarded to office spaces with the highest safety parameters that reduce the risk of disease transmission.

KZB: I believe it is very important for our well-being that we simply meet with other people in the office. This is what we have hugely been missing in recent months. We need people, but we also need a change of environment, at least partially separating our work from our private life. In general we want employees to feel at home in offices, but also to address their social needs and interpersonal interactions. A few years ago, we decided that all our new projects will be implemented in accordance with the WELL certificate, which focuses on building users and their well-being. This means that we design spaces to maximize access to natural light, and as a supplement we have intelligent lighting that harmonizes with the daily human cycle, adjusting to the time of day. Modern ventilation and filtration systems providing fresh air are also installed. It is air with the right level of humidification. We also place a lot of plants in our offices and ensure the availability of drinking water, because – as research shows – it We cannot fully predict the full consequences of the pandemic. There are areas of the real estate market, such as hotels and shopping malls, that have been hit hard by the lockdown and the second wave of the pandemic.

Spark building by Skanska. has a huge impact on our well--being, as well as high acoustic comfort. Aesthetics and art are also surprisingly important for the well-being of people inside the building, which is why, for example, in our Warsaw Spark office we have murals and designer details. If we add to it ergonomic workplaces with a comfortable armchair, a large desk and, for example, two large monitors, they simply provide much more comfortable and better conditions for our health. The employee feels better, establishes direct relationships, feels more connected with the company, and wants to come to the office because it responds to his natural needs.

AR: It is worth adding that in the coming years we will observe another big change – the management of office buildings will be completely different. In a few years, office buildings will be like hotels. Most likely, tenants' buildings and spaces will be managed like hotels. We will encourage people to want to come and work in offices. After working remotely for a long time, people will get used to saving time on commuting to offices, so employers will have to help office workers save time in other ways. Hence the growing popularity of, for example, concierge services in office buildings, gyms on the premises, flexible space or conference centers in the buildings. In my opinion, this will be a positive thing caused by the pandemic.

In the coming years we will observe another big change - the management of office buildings will be completely different. In a few years, office buildings will be like hotels. Most likely, tenants' buildings and spaces will be managed like hotels. We will encourage people to want to come and work in offices.

AR: Tenants are already asking us about all types of flexibility. As soon as the pandemic situation normalizes, flexible office space will become popular again, even more so than before the crisis. I believe that it will become more and more popular to provide flexible spaces in common parts of office buildings, i.e. not as part of leasing to a co-working or flexible space operator, but as an additional building benefit for tenants who

lease long-term.

KZB: I think we should also remember that, with regards to the younger generation, the values shared by and represented by their employers play a key role. This will become even more important, especially during the climate crisis. In my opinion, sustainable and responsible corporate activities will become the norm. This is what the world will require of us, but this is also what employees will expect – consistency with their personal values. Skanska once again made the top 20 of the ‘Change the world’ list of the prestigious Fortune magazine. We have social and environmental responsibility in our blood. I am very happy that the entire commercial real estate industry is becoming more and more aware. There is still a long way to go in reducing our negative impact on the environment, so we continue to take decisive steps in this area.

KZB: Most of our tenants come from the business services sector, which is why we are closely monitoring what is happening in this industry. We are glad that large international companies continue to expand in Poland, although, of course, these expansions are not as spectacular as a year or two ago.

AR: We watch you grow, support you, and want to continue responding to your needs. Just as we have done in the past. The scale of changes has simply accelerated, but for now – we are keeping up with the pace.

The ethical merits of Corporate Social Responsibility have long been established. But the benefits of CSR go far beyond what the famous economist Milton Friedman once referred to as mere “window-dressing”.

Author:

Investment Advisor | GBS & ICT at Invest Lithuania