MAGAZINE: Skanska tops PropertyEU's office developers ranking

For the second year in a row, Skanska tops our league table of office developers in Europe, with delivered space totalling 443,653 m2 in the three years from 2016 to 2018, the most in our snapshot of the sector.

Interestingly, every square metre that Skanska developed from 2017-2018 in mainland Europe was in Central and Eastern Europe (CEE), where it operates in four countries.

The company continues to establish itself in the fertile – but heated – CEE region with a total of 17 new schemes in progress, the majority of them in Poland. It has three underway in Romania, two in the Czech Republic and one in Hungary.

French rival Altarea Cogedim, which takes second place in our ranking this year, has only been kept off the top spot by dint of Skanska’s activity in the Nordics. Altarea Cogedim built a total of 431,850 m2 in the three-year period. The French developer delivered eight projects in 2018, down on the 21 it completed in 2017. Its pipeline through 2021 comprises 49 office developments, all of which are in major French cities.

French firms dominate Top 5
The final podium position for delivered office space in this year’s ranking is taken by another Gallic company, AXA IMRA. Indeed, French firms comprise most of the top five, with BNP Paribas Real Estate in fourth spot. In common with Altarea Cogedim, BNP Paribas has a strong focus on the domestic French market, with 26 of its 29 completed projects located in France. European developer HB Reavis rounds off the top five places.

Coming through loud and clear from the developers and investors PropertyEU spoke with, is that in 2019 it is occupiers who are calling the shots. Understanding tenant appetite and focusing obsessively on satisfying it are major planks of developers’ strategy.

Nowhere is this more evident than at the company which tops this year’s survey. Aurelia Luca, Skanska’s acting business unit president for commercial development Europe, tells PropertyEU: ‘Employers increasingly focus on the well-being of their employees to improve productivity and attract talent in global labour competition. Skanska meets this demand by developing WELL-certified buildings with better air quality, light conditions with natural light and sound levels.

Green buildings
Already, green buildings are being developed into buildings that offer a better working environment and ultimately increased productivity. ‘We observe a significant evolution of needs and expectations when it comes to the quality of modern office space. Taking into account that employees spend approximately 90% of their time indoors, a well thoughtout and well designed office space becomes an important employer-branding tool to attract and retain talent.’

Jan Odelstam, Skanska’s business unit president of commercial development for the Nordic region, echoes that. ‘Today tenants and investors are looking for well-located A Class
buildings intensively,’ he says. ‘We want to deliver them best-in-class assets, which will not be just an office space. Our goal is to provide healthy, sustainable, human-focused and future-proof workplaces. That’s why we are happy that our Visionary project in Prague was awarded WELL Core & Shell Certification as the first office building in the CEE region.’

The trend of developers focusing on occupiers’ needs is widespread and not just for the big beasts of the sector. Diversified real estate investor Cain International has schemes in Barcelona, Madrid, Dublin, Krakow in Poland and a mixed-use project with an office component in Warsaw.

Richard Pilkington, Cain’s head of European equity, says: ‘Really understanding what occupiers require is critical to what you develop. In our discussions with occupiers the key message we hear is “this space has to be right for our people”, which didn’t used to happen. It used to be more, “where does the CEO have his office?”

‘Now it is about how people get to work, where do they live, what are the amenities, what is the space they are in, and does that space work for them? Modern office is not just space for employees to work in; it has got to be more than that.

‘I think the trend in developers now is all about being very, very smart about the way you profile your occupier and create the space for the workforce.’

In Barcelona, one of the key design features of Cain’s development is concerned with the number of terraces. Daniel Harris, head of European investments, says: ‘It is not just maximising the number of square metres in the building because actually that’s not necessarily the most important thing to feature anymore.’

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