There are conflicting factors affecting modern real estate asset management – particularly, but not only, in Central and Eastern Europe: on the one hand, advanced, technically superior and high-quality buildings rented by top national and international firms demand highly professional management of the rental properties; on the other hand, (institutional) investors as owners demand cautious and sustained management of their real estate assets and the necessary transparency in operations, valuation and reporting. The top-of-the-line real estate market in Central and Eastern Europe is characterised by extremely modern office properties, logistics parks and shopping centres built over the last few years. Buildings in this sector are often very new and have required little or no maintenance. These properties were for the most part built by developers with a somewhat short-term view of holding on to them. A particular challenge for real estate asset management is and will be to keep these buildings in good shape in order not to lose existing tenants and to keep the buildings attractive for new tenants. This task is not made any easier by the continuous flow of new property onto the market. We are convinced that long-term success can only be achieved through a strategic approach, focussing on important responsibilities and a rigorous claim of quality. From the point of view of real estate asset management: the real estate asset manager is responsible for the economic outturn of the property. The more the investor has left over after all costs have been deducted, the more successful the property is; consequently, the factors for success are full occupancy (with tenants who actually pay) and manageable and acceptable operating and maintenance costs. These potentially conflicting interests could be solved by applying the following magic formula: “Satisfied tenants in well-maintained, professionally operated and fully occupied buildings pay their rent on time.”

Consequently, as a real estate asset manager, Europolis has a trim structure and makes use of the knowledge of facility management specialists in the management of the buildings; with the important proviso, however, that the most important part of commercial facility management – the contact with tenants – remains the responsibility of Europolis. Combined with the development of a customised strategy and the positioning of a property, first-hand knowledge of the markets and tenant wishes are the key to successful lettings and retaining existing tenants in the long term. As these conditions tend to be in constant flux, a continuous involvement with the property is guaranteed.

A look at the rental success for 2005 clarifies the fruitfulness of this approach of market closeness and strategic access: last year, Europolis entered into new rental contracts or extended existing contracts covering a total of 146,910 m². With this, not only were vacancy rates further reduced to below the average for Central and Eastern Europe, but new tenants could also be found for Europolis properties in four countries.

Top real estate requires higher building and service qualities – often accompanied by higher costs. Tenants are prepared to pay these higher costs if they are predictable, transparent and understandable, and if they are justified by the services they buy. On the expenditure side, Europolis is also trying to reconcile spending with a long-term cost-benefit strategy through life cycle observations, investments in new technologies and detailed bidding processes for facility management services with supporting service profiles. The best examples of intelligent cost reductions (with around 40% lower energy costs) are the two Europolis developments Danube House and Nile House in Prague. Furthermore, following the expiry of the respective guarantee terms, instruments such as periodic building inspections by specialist third-party companies, internal and external benchmarking or 5-to−10-year maintenance and reinvestment programmes will be applied.