Romania: CTP to Invest 120 Million EUROs in 2019
Interview with Ana Dumitrache, Country Head, Romania
Earlier this year, Ana Dumitrache returned to CTP Romania’s leadership, with deep know-how and bold goals. She has been with CTP since the company’s entry into the market, from the position of head of the real estate department within Erste Bank.
CTP owns 15 parks in Romania located near Bucharest and nine other cities, totalling a built-up area over one million square meters, with a vacancy rate of less than 5%. “Since its entry into the market, CTP has invested about 500 million euros in Romania and will continue”, says Ana Dumitrache: “We plan to invest another 120 million euros in 2019”.
How was 2018 for you?
It was a very interesting year from a professional point of view. I spent it working in the biggest real estate consulting company in Romania and internationally. I think I’m a very lucky person in general, and I think 2018 was no different in this respect—I was lucky to be able to directly try out agency experience, create a lot of contacts and get me connected with the real estate market in a way I could not have done it from my previous position. I think I’ve come back to the new CTP mandate much better equipped with a full perspective on the whole industry and with the major advantage of the previous period that helps me be wiser in the decisions I take today. There is much to be done, the targets are ambitious according to the company profile, but this is what motivates me—and, as I like to say: no apologies! We are market leaders and we are not allowed to be anything but the best.
What was the main argument for your decision to return to CTP?
It’s very simple: I liked it like crazy and I still love it. CTP is a particularly integrated concept. This company does not just build industrial halls, it builds communities both with the partners from the parks and at the level of people working here. All the plans that Remon Vos has for Romania, corroborated with the complete and complex vision that I have accumulated in consulting, are the arguments that made me come back with great pleasure and desire to move on. Again, being part of a team to whose training I have contributed substantially and working with people with whom I share professional and moral values have been solid arguments in my career decision.
CTP is a company that fits me well as a profile, through its dynamics, but also through the verticality it adopts in business relations. It is a company in which I succeed in making the most of what I have accumulated in my career so far, including the short but intense agency experience as well as the extensive banking experience.
And what do you think you bring into the team?
Enthusiasm, a lot of enthusiasm! We do not have problems but solutions, and everything is in our power, sometimes even the weather :). I like to work with passionate people who want to perform as I do, I impose high standards, work a lot, but also effectively, I try to never lose my sense of humour and think positively in all circumstances. I think the best teams are those whose members come to work with pleasure and are passionate about what they do. Fortunately, the CTP team is made up of such people. I am here to support, guide and encourage them to make useful business decisions and professional development, but also to enjoy together the results, to grow together and enjoy what we do every day.
You have returned to the CTP team on the eve of the company’s outstanding performance, namely reaching 1 million square meters built in Romania. Obviously, it has been hard work to achieve this goal and it is certainly part of your legacy as you have been “out” of the company less than a year. How do you see your contribution to the CTP’s “first mandate”?
I am certainly very excited about the results I have achieved with CTP and the great team the company has in Romania. Any project of this type has a lot of work behind it, but I would say quality work, strategy, planning and good resistance to stress. Not just one million square metres, but one million square metres of safe, comfortable, clean and green parks, grooming, efficient buildings, integrated management services. This one million square meter is the accomplishment of a results-based, dedicated local team, but also the result of successful collaboration between CTP and its suppliers and tenants.
What are the geographical areas of major interest for CTP?
CTP’s strategy was to build on customer demand instead of speculative developments. We focus on the regions where our tenants want to expand. Thus, apart from the Bucharest area, where we already have three major parks and are planning on expanding in the near future, we are a very active player in the western part of Romania, in cities of strategic importance for CTP tenants.
However, the current portfolio allows us to always have sufficient available space to cover the growth or the needs of our customers, and we have the flexibility to find 24-hour solutions, temporary or permanent solutions, have ideas and experience, and most of the time, the only thing our partners have to do is contact us to solve a space problem, and the solutions come by themselves.
How do you see the evolution of the local market in the last ten years in the context of the international market, and how did the customer profile change over this period?
The local market has huge potential and offers important advantages, including the available land stock, which is higher than in other countries in the region. High-quality labour is another strength of Romania, underlining that we need to focus more on the retention of specialists in the country. The logistics and industrial segment has gone through a stagnation phase between 2008 and 2014, followed by a revival in 2015. Over the last four years, it has continued to grow steadily and we expect the same trend to follow in 2019.
The client profile has certainly changed. Currently, companies are much more educated in this area and know more clearly what they want from a storage or production space. Thus, customers are looking for buildings built to higher quality standards, low energy consumption, and more environmentally friendly. The demand for built-to-suit warehouses—built to the exact specifications of the future tenant has increased. A good thing is that most of the big players on the market have understood that a warehouse is no longer just space, but it is quality, comfort for its employees and adapted to the latest technologies. When investing in the work environment, you actually invest in employee productivity to secure your workforce. So, tenants have realized the importance of services and a long-term manager in logistics and industrial parks. Therefore, the developer is no longer seen as a supplier, but as a partner who often has a major role to play in the success of tenants’ business.
How do you see CTP’s contribution to local market development?
CTP has made a major contribution to the local market development by firstly imposing high standards on building quality and quality of living in parks. We use the same quality standards in all parks in Europe and we try to maintain the same quality of customer-focused service. In this way, all our customers in other markets looking to Romania have the certainty that we can meet all the requirements that they might have, like in any other CEE market, and that sometimes contributes to their decision to come to Romania.
We have, among our clients, extremely important players in various fields, including Arctic, Ekol Logistics, DB Schenker, DSV, Faurecia, Quehenberger Logistics, Opsan, Ursus, etc. We are also proud of the fact that through CTP, companies such as Logwin in Bucharest or Fränkische in Turda entered the Romanian market.
One thing we are talking about less is what we did at the level of acquisitions. CTP entered the market in Romania starting from 2013-2014 through a number of important acquisitions. All of these spaces, built mostly ten years ago or more, have been taken over at various stages of degradation, without authorizations, without fittings, without infrastructure, etc. Since their acquisition, CTP has invested heavily in the refurbishment of these sites, bringing them to current energy, safety and efficiency standards, in addition to the buildings’ exteriors and park infrastructure.
CTP’s contribution to improving transport infrastructure, creating thousands of jobs, and supporting some growing sectors of activity, such as e-commerce or production, has also had an economically positive impact.
How do you see the market in 2019 and what goals did CTP propose for this year?
The industrial and logistics segment will grow in 2019, following the same trends of the last four years, because the existing stock still needs refreshment and the old, inappropriate spaces—many without proper permits and facilities—no longer meet the challenges of a world dominated by technology. Needless to say, they should even be closed because of the danger they pose to residents. From today’s data, in 2019, the construction of about 600,000 square meters is planned, which means that we are witnessing the most intense activity compared to recent years in terms of organic growth through new construction. Half of this stock will be delivered by us and we are glad that our competitors also have highly ambitious new delivery targets at this time.
There are also some investment projects that attracted our interest earlier this year and we estimate that, compared to last year when we did not make any notable acquisitions, in 2019 we will acquire at least one project that will increase our size but also the value of the portfolio through synergies that are created with what we already manage.
In 2019, CTP plans to grow, not only as a property developer but also as efficiency and the quality of service we offer to our clients, through ambitious infrastructure projects and by expanding the range of facilities in our parks which increases the quality of the working environment. all these will ultimately support our tenants to attract a high-quality workforce. This is the year in which we want to clearly define our CSR strategy and contribute to improving the quality of life of our communities. It is a year in which we want to grow both in number and type of clients, diversify our portfolio, and also collect the fruits of management involved and attentive to the needs of our customers and their employees.
What goals do you propose in the medium- and long-term within the company?
One of my main goals is naturally to continue developing CTP in the same accelerated but healthy pace. We want to reach a national portfolio of 1.5 million square meters by the end of 2020. We open new areas—for example, in the Bucharest area, we will expand in the north-east and we will focus intensively on CTPark Bucharest West, which we will transform into a logistics hub for Eastern Europe. It will become the biggest project of this type in Central Europe. We plan projects in cities where we are not yet present, and where we have very exciting opportunities at the beginning of the year. We grow with our customers and, if they go to areas where we are not yet present, we are always ready to support and follow them. Also, we have interesting constructions in different stages of development in CTPark Bucharest, CTPark Sibiu, CTPark Piteşti and CTPark Timişoara II. We want to introduce new concepts that have been successful in other CEE countries where CTP is present. We believe that the Romanian market has reached the maturity necessary to absorb other types of projects and other types of spaces that meet more sophisticated needs and fit differently in the landscape of logistics and industrial spaces.
This year, we plan to build a modern pavilion in CTPark Bucharest West, designed primarily for employees in the park, but not only. It will have a restaurant, supermarket, service area, car parks, conference rooms and office space. Inside the park we will have bicycle tracks, and the access roads will be enlarged, and there will be comfortable street lighting. Those who have come to the park have already noted a big difference from the way the place looked only a short three years ago. We were delighted that both tenants and bankers— and generally all visitors of the park—particularly appreciate CTPark Bucharest West thanks to the general organization, the way in which the infrastructure of the park is designed, and the improved cleanliness.
It is worth mentioning here that all the new buildings we have developed in CTPark Bucharest West, but also in CTPark Bucharest over the last two years are in different stages of green certification. We have BREEAM Very Good certification and we do not think it will be a hitch to reach our target in terms of allocated investments and attention to the energy efficiency of our buildings.
As you can see, I have a fairly extensive agenda for the new CTP mandate, and there are several projects that I am very fond of. For example, the project through which we create connections between residents of our parks and graduates from schools and high schools in nearby communities.
Interview translated from the Romanian original by Real Estate Magazine, April 2019, link.