print ]Interview with Miroslav Příkop, director general of the CIMEX INVEST Company
Administrative buildings in old city centers as well as in the suburbs are classified as B-category.
„In the last few years, the Cimex concern has been focusing on such objects. They are often more in demand than A-category modern office bulidings,“ says ing. Miroslav Příkop, director general of the CIMEX INVEST joint-stock company.
The „B-real estates“ are often not even included in the surveys of large marketing and real estate companies. How would you describe this not-so-well-known segment of the real estate market?
It has been wrongfully overlooked. The „B-real estate“ business seems to be hidden in the shade of new business and office centers. Despite that, there is much more money in it, speaking of the whole Czech Republic. The reason is simple: The funds invested in this kind of real estate pay off by 8 or 9 percent, whereas in the A-category it is only 6 percent.
What do you think makes these real estates attractive for tenants?
They are popular for several reasons. A very important thing is the total cost. Taking the tenant’s point of view, the total costs, that is rent plus services, is roughly 20 to 30 percent lower in the „B-real estates“ than in similarly located new centers. I would like to emphasise that I am talking about the sum of the rent and all the services provided. And what the tenant gets is comparable to, and even surpasses the „A-real estates“, because the „B-real estates“ are often situated in city centers, unlike modern office buildings – and that is often crucial for the tenant. Another advantage is a different approach of the lessors to the tenants – lagre centers often insist that the tenants rent a space larger than a certain lower limit, and that is often hundreds of quadrate meters. However, small companies, even very successful ones, do not need that much.
Do you think that the luxurious office buildings that keep springing up everywhere you look in Czech cities are going to have trouble with filling their capacity?
That is not for me to state, but considering the available statistics, which suggest that the vacancy rate of these buildings is 14 to 16 percent – and quite recently these buildings were 100 percent occupied – I say it can happen. But the truth is that if there are many new „A-category“ office buildings somewhere, it makes the premises more attractive. That has also a positive effect on our Bs, located nearby. A typical example is Prague 4, where BB Centrum has been built. The area became a prestigious business center. Our property in the vicinity does not offer the same luxury, but it allows our clients to have offices nearby, for a reasonable price. The two categories of real estates do not compete, they complement each other. What I am saying is confirmed by the fact that we manage to keep the occupancy rate of the real estates we hire – roughly 10 000 m2 – on 95 percent. The situation is almost the same in Pankrác, which lies nearby.
How much do you want to invest into this sector in the future?
The board has agreed that we – that is, the group – are able and willing to invest about five billion Czech crowns into real estates. We have decided to double our current estate area in the course of two years. We are intensively searching for projects – all that matters is their quality. We are willing to pay a lot of money for well-designed projects.
Another activity of the CIMEX company is development. What are your activities in this part of the real estate market?
Just now we are finishing the transformation of a few beautiful houses in Mariánské Lázně to apartment and office buildings. Another project, a reconstruction of three buildings in the very center of the spa resort of Mariánské Lázně, is currently in preparation. But unfortunately, several large-scale projects are being stalled by legal obstructions so typical for this sector. And not only for it.
What exactly do you mean?
We are troubled by unsettled, protracted, neverending restitution claims. They block our unfinished projects worth half a billion crowns. In a suburbian neighborhood in Prague, a restitution claim appeared to a land estate whose owner we had thought ourselves to be for many years – right in the moment when we were going to build two thousand apartments there. Another serious case is the Hrubá Skála Castle hotel. Whoever knows it will agree that it is a unique combination of a beautiful historical object and the romantic Bohemian Paradise nature, aspiring to join the UNESCO list. For many years we tried to find a compromise with the heritage authorities about using the castle. We worked out the largest reconstruction project in the castle’s history, for half a billion crowns. And when we finally obtained building permission, suddenly there came a restitution claim out of nowhere. We are not against restitution and rightful property claims, but no business company can work without being sure that it actually owns the property – and that is exactly the case, because of defective laws of the past.
Let us get back to „B-real estates“. How high is your occupancy rate?
I think that we have a great advantage that there is a facility management company in the CIMEX concern. It takes care of maintenance as well as occupancy rate. All statistics agree that the average occupancy rate of A-buildings is 85 percent. Thanks to our own company, we are able to keep a stable occupancy rate of 95 percent. That is also why we are convinced that the next years will be a period of continual growth for this sector.
Source: Hospodářské noviny
ByJiří Kučera
