The definition of an asset manager is to increase the value of the assets entrusted to them

What does the discipline of asset management entail?

Asset management is at the imaginary top of the pyramid in taking care of the building and its tenants, actively dealing with organisational tasks at the managerial level, strategic planning, complex project management and the investment component within its portfolio, and working with various financial indicators and reporting. The role of the asset manager is to grow the value of the property under management, which can be achieved not only through renovations and upgrades, but also by searching for other opportunities for income generation or by setting commercial terms of lease agreements with respect to the principles of property valuation and elimination of risk on the landlord's side.

Speaking of the pyramid, it is important to mention the lower levels. At the base is the facility management of the building, which includes daily services such as cleaning, security and technical management of the building, the next level is property management, which already deals with the communication component with tenants, contracts, their requirements and daily care of them, while property management is responsible for the management of contractors within the facility management and the operating costs of the building. Each of these levels differs not only in the activity itself, but also in the level of responsibility for the financial side.  While technical management has insight into the operating expenses (OPEX), the property manager sees into the net operating income component and the asset manager manages the entire financial and investment component of the company that owns the property or portfolio.

At WOOD Real Estate, due to the breadth of our portfolio, we have our own property management in the Czech Republic, and we partially outsource in Slovakia and Poland.

What skills should a good asset manager have?

They need to have a comprehensive and strategic mindset, should have a fairly detailed knowledge of the market and the ability to predict its further development. They must have communication and negotiation skills and be able to analyse different scenarios and, in the case of investments, make decisions that maximise the return on invested capital. Must have knowledge of the law and a basic understanding of tax laws.

You are responsible for the office portfolio in Bratislava. What is the average lifespan of an office building? How often do you need to carry out any more expensive building modifications?

The lifespan of an office building is determined by the quality of the design during construction and the quality of its management after commissioning. Tenants' requirements change over time, while at the same time trends are entering the market that were not necessarily common just a few years ago. For example, today it is unthinkable for an office building not to have bike rooms, showers or charging stations for electric cars. This is something that is taken into account in property development, but in older buildings, space has to be found for these facilities, often at the expense of existing areas such as parking, storage areas and so on. However, it is necessary to invest in the building regularly, even in small amounts, so that it always reflects the trends that are common in the market. This, of course, has a subsequent effect on occupancy and demand.

How does this work in practice for your buildings, for example?

In Slovakia, we have several revitalization projects underway. We are renovating the lobbies of the Bratislava office buildings BBC5 and BBC1. We are also working on cultivating the spaces around the buildings, and we are building a new PV plant on the roof of BBC5, which should be operational early next year.

The revitalization and care of buildings has a direct impact on the value of the property. Our goal is to hold buildings for the long term, so we must continually invest in their maintenance and further development. We have older and 20-year-old buildings in our portfolio, where, especially in the area of materials or energy performance, there are big differences compared to new development. We have to do more to be competitive.

After more than a year in Bratislava, do you see any specifics of this region?

The market in Bratislava is highly competitive. There has been a lot of construction in recent years and there are several large players that have a significant impact on the market. Bratislava is small, and these players are not as strong in Prague. In Prague there is about 7% vacancy rate, in Bratislava there is about 14%, so the dynamics must logically be completely different. It's about more emphasis on communication with tenants, we have to accommodate them as much as possible with various incentives and care. If a tenant is happy, they stay with us, and their positive feedback helps us to take on more space.

What specific steps are you taking to stay on top?

We have to be very agile and fast and we have to constantly monitor the competitive environment. It is not possible for a demand to go unanswered for more than a day. We take care of the client from the first second. We have an in-house team of architects who draw the space plans for us, so we are able to deliver a design for the fitout within the next day or so, including pricing.

We are open to new trends and can respond to less traditional demands. If we have a free space, for example a floor, we don't wait a year to see if we can occupy it as it is. For example, on the BBC1 building we have converted a vacant floor into flexi offices in this way, which we provide to small tenants on a no obligation contract. And we can see from the interest that we have hit the needs of the tenants.

How are flexi-offices and coworking centres, which are also a trend in recent years, related? What are the differences between them?

For a better understanding, we can compare a coworking space to a hotel, where you have a complete service from furnished offices, kitchen, presentation rooms, to free drinks and catering services. In contrast, flexi offices are something like Airbnb, you rent a space with basic services and you have to take care of the rest on your own, flexi offices also do not include interior furnishings, but everything depends on the requirements of the tenants.

Our coworking concept ZONE in Bratislava is an exclusive fully equipped project with the services of a manager who is there fully for the client and addresses their needs.

We see potential in both concepts, both in flexi offices and in co-working spaces, in Bratislava. Compared to Prague, for example, the market here is not so saturated yet.

What are the current trends in office buildings?

We observe that recently there has not been such an emphasis on open space and companies are going the way of smaller offices. Charging stations for cars and e-bikes, bike sheds or showers are becoming standard. We try to bring the services that tenants demand to our buildings. We regularly find out about their needs through satisfaction surveys and respond to their needs. This could be, for example, in-building refreshments with modern, healthy cuisine and an affordable menu. Such a project is currently being addressed by colleagues in Prague's Hadovka Office Park.

ESG has also been a trend in recent years. How do you work with it at WOOD Real Estate?

ESG is resonating in the business world and its importance will grow. Going to the bottom line, even banks today approve credit based on meeting ESG parameters. For us at WOOD & Company, this area is just a statement of something we have been doing for a long time. We have a strong focus on energy management, on managing technology to make consumption as efficient as possible and, last but not least, on investments that deliver energy savings. We try to make maximum use of natural resources, for example, we have PV installed in Bratislava at Aupark and we will also have it at BBC5, in Prague we have PV on the GreenPoint and Hadovka buildings.

Apart from that, we take care of our tenants and try to keep a community spirit in our buildings. We organise various sporting, social, cultural or charity events for tenants to get involved in.

Does ESG also influence which tenants come to you?

Of course. Some multinational companies have headquarters-defined parameters that automatically select buildings according to the ESG parameter. In addition to energy performance, for example, accessibility, green roof or a particular type of window, carbon neutrality or reduction of CO2 production is also a strong theme.  Long-term sustainability and environmental performance are key considerations for the decision-making of such tenants.

You have extensive experience in asset management and at international level. What is it that appeals to you about working at WOOD Real Estate?

There is a very experienced team of professionals at WOOD that I respect. With a flat structure and management's trust in their people, we can be incredibly fast and flexible in the execution of projects from the decision making phase to the actual implementation. WOOD & Co is a very rational company, economically minded. Even with the commitment to investors, everything here has to have a clear focus. Teamwork comes first, and that suits me.

Media relations:
Marketing Manager
Ivona Prokešová
Tel.: +420 604 215 523
E-mail: ivona.prokesova@wood.cz