A significant number of office buildings were constructed in the 1990s, many of them in very good locations. Today, it is increasingly difficult for these buildings to compete with new ones, and thus the owners have started to consider refurbishing them. Interview with Christian Fojtl, Managing Director, WX Management Services about upgrading office schemes.
Your recent activities in the business sector in Warsaw include two projects which have come to our attention: SPEKTRUM Tower in Warsaw and K1 Office in Kraków. The common elements between these two projects is the fact that you have executed work that constitutes an upgrading or overall modernisation of an existing building. Is this a coincidence, your investment strategy or possibly an element of a general trend in the real estate market?
Christian Fojtl: Upgrading is an ongoing feature of the real estate market and as the market becomes more mature (and more competitive) more and more building owners will have to decide whether to modernise, sell a building (if they can find a buyer) or invest in a slight or comprehensive refurbishment. This has become an increasing feature of the Polish market where a number of office buildings were constructed in the 1990s, many of them in very good locations.
These buildings attracted high profile tenants during their first years of operation but now find it increasingly difficult to compete with new buildings, and thus the owners have started to consider refurbishing them. From our experience it is necessary to prepare this process very thoroughly and carefully. Decisions have to be made as to which components of the building can be retained and which ones must be changed as they no longer comply with current fire or health and safety requirements. The owner must also select new elements which might be desirable. It is also necessary to have a clear marketing strategy in mind when planning an upgrade. The owner must decide what kind of tenant they wish to attract to the building in future and the appropriate investment and changes to the building. The last thing an owner wants to do is spend a lot of money but omit to carry out the very alterations that could have made a difference.
Another important element of a refurbishment programme is a detailed knowledge of the existing building and its structure. It is worth spending extra money on carrying out a detailed survey before starting construction, than coming across a fault in the course of the work. Given the complexity of the process it is crucial to work with experienced consultants and architects who are able to arrive at innovative solutions. It is always easier to replace an entire structure than to try and improve the existing building. This is the fundamental challenge of the refurbishment process: use as much of the existing structure and its installations as possible and find ways to make them more efficient and environmentally friendly as well as looking new and attractive.
Our flagship project - SPEKTRUM Tower - is a shining example of such an investment. The modernisation of SPEKTRUM Tower consisted in a major reconstruction of the lobby front elevation, thereby creating a completely new entrance area and adding a high class atrium space with natural light. We also included a number of new elements, incorporating new fire safety installations, access control systems, as well as adding new elevators and changing some of the existing ones. All these changes permitted us to apply for and obtain a Bream Major Refurbishment Certification (which is much more comprehensive than the simple “In Use” certification)
Entrance to SPEKTRUM Tower before and after upgrade
What has changed as a result of the work carried out? Can you indicate the most important or the most difficult elements of the reconstruction, or any elements of which you are particularly proud?
Christian Fojtl: In the case of the modernisation of the SPEKTRUM Tower we are particularly pleased that we can now offer our tenants a fully refurbished high-class office building in one of the best locations in Warsaw. SPEKTRUM Tower has a Bream certificate and the building offers its tenants a wide variety of superb amenities, including bike racks, showers and wardrobes, eight high speed elevators (thereof two panoramic elevators), the biggest fitness centre in downtown Warsaw, restaurants and cafeterias, a large convention and conference centre, as well as many other amenities. Many floors offer direct access to green terraces which are open to the use by the tenant. The office building also has a public bike rental station. SPEKTRUM Tower provides a people-friendly and natural environment.
Foyer SPEKTRUM Tower before and after upgrade
Did you come across any obstacles or did any unexpected situations arise during the course of the reconstruction work?
Christian Fojtl: Unexpected situations are an unavoidable component of every development project. During a refurbishment process problems that were not evident in the building plans or documentation will always emerge. But thanks to our in-house specialists as well as our great team of consultants we were able to find solutions to each and every problem that came up.
K1 and SPEKTRUM Tower are projects that have now been completed. Are you planning any projects of a similar nature in the near future?
Christian Fojtl: We are currently handling the modernisation of the remaining office space in the SPEKTRUM Tower and in the K1 Offices in Cracow. We are also working with owners of other properties in Warsaw and additional regional centres to assist them to reposition and commercialise their investments.
Your projects have contributed to improving Warsaw's and Kraków image as a city and they have played a part in creating a quality people-friendly city space that combines history with modernity using the existing resources. Have these projects brought you personal satisfaction as well as the obvious financial rewards?
Christian Fojtl: Personally, I am happy that we can make a contribution to the development of the city by restoring its historical buildings to their former glory, by giving them new functions through the modernisation of office buildings which are a dozen or so years old. But for me personally the greatest satisfaction is to see a building coming back to life again after a lengthy process of refurbishment. I am able to experience this satisfaction every day when I go to our offices in SPEKTRUM Tower and see people using the fitness centre, sitting in the lobby or parking their bike in the courtyard. When we refurbished Le Palais on Próżna street we brought this part of the city back to life with some great restaurants which have become a meeting place for business and leisure all year round. This is now happening with SPEKTRUM Tower which is increasingly becoming a centre for many innovative, young, dynamic and successful companies.
Main Reception SPEKTRUM Tower before and after upgrade
Communication Manager Poland&CEE, JLL
The interview was conducted by Anna Wasilewska-Dąbek, Editor of Bazabiur.pl. Anna is an expert in B2B communication, CRM and digital marketing. She gained her experience working for corporations such as DHL and King Sturge both in Poland and abroad for over 15 years. Anna works at JLL for 4 years.