Skanska: ESG ‘very high on agenda’

Europe’s largest developer of offices says tenants and investors are ‘looking for the best in the market’ in terms of ESG credentials.

Arkadiusz Rudzki, executive VP of leasing and sales in CEE for Skanska, is attending this year’s Expo Real show for the first time.

Speaking ahead of planned meetings, he said ESG issues were being discussed as a matter of growing importance to investors as it is ‘becoming an important aspect of the real estate world, including transactions'.

‘Sustainability of buildings, health and safety, and how you run the operations of the building is so important. We are getting more and more capital looking to be invested for the certified projects, which are very high on the agenda,' he said.

Asked whether investors were only looking for ESG-compliant buildings, he added: ‘Yes, absolutely. Not only investors but also tenants. It used to be about "tick the box", but now it is about digging into the details. Investors are looking for the best on the market when it comes to this perspective.’

The Skanska executive does not believe this is just because of the Covid-19 pandemic. 'It started some time ago, and of course, you need some time for the market to adjust. Sustainability and carbon reduction is a big topic globally and we at Skanska are ambitious with that.’

Expo team
Skanska, which was is ranked Number One in the most recent PropertyEU European office developers' ranking, is sending a ‘limited team’ to Expo Real given the circumstances. Rudzki said: ‘I am curious how it will look. We already know there will be less participants this year, but I know those that are coming, and they are coming for business.’

CEE market
He believes to an extent the market is in ‘wait-and-see mode’ but that more and more clients have ‘at least a concept when they want to go to the market’.

With lease expiries taking place all the time, clients and tenants of Skanska will have to take decisions at some point.

‘There were a lot of short-term extensions of leases during the first part of the Covid period in 2020. We see that tenant activity is picking up. Across the four countries we operate in, we have a different dynamic. Poland and the Czech Republic are the most active as of now. I think it is also related to the type of business we have as we have more operations in Poland.’

He added: ‘There is a lot of interest in the market, but it has polarized a lot. There are locations or projects that are attracting investors very much with all of the ESG factors that I mentioned. There are also opportunistic investors. Everything that is core-plus is a bit more challenging as of today. Either you want to make better returns in the opportunistic type of investment without having to generate added value or you are picking up the super core locations and projects that have a bigger price.’

‘There is a lot of money in the market. Obviously the most desired asset class is logistics but there is a lot of interest in office buildings, especially the best ones.’

The company is currently selling its Generation Park Y office tower development in Warsaw, though the firm declined to comment. It recently installed a huge green wall measuring 22 metres long, and 15 metres high, with several dozen species and over 6,000 plants. It is the largest arrangement of its type in Poland.