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BUSINESS INSIDER interview with Dimitris Raptis, Co-CEO & Chief Investment Officer

How will coronavirus pandemic affect the real estate market in general and in Poland more specifically?

The situation is still very fluid, so we cannot estimate the magnitude of the crisis yet. There will be a very significant impact on the global economy, which will be obviously felt in Poland too. Therefore, we are prepared with the business continuity for several scenarios and at the right time, we can intervene - depending on how things evolve. We are living in a situation where we have rapidly changing probabilities. Amid this situation, the safety and wellbeing of our people, clients and communities continue to be our top priority while we try to safeguard the business, protect its assets and aim to limit the liabilities and the consequences from this crisis that evolves day by day.

Is Globalworth preparing for a downturn in the real estate market and if yes - how do you ensure economical safety of your employees and the whole business? (e.g. what actions have you already taken and what actions Globalworth is planning in the future to secure its business).

Globalworth has a strong financial position with close to Euro 600m of cash on Balance Sheet. Having said that, as discussed above, the impact of the COVID-19 crisis will be very significant on the worldwide economy – there is a lot of literature and analysis even from organizations such as the IMF, OECD, etc. predicting that this year we will see one of the greatest recessions ever.  At the same time, the longevity and extent of the crisis still unknown.

As such, we have a responsibility to be prepared for tougher times ahead and for the past several weeks, the entire Globalworth management and team have been working hard to implement several measures aiming at preserving cash flow and protecting our income and assets, whilst at the same time always staying close and assisting our partners as much as possible without affecting the quality of the service provided. 

Are there any particular segments of the real estate market that might be, in your opinion, more affected by pandemic than others? For example, many companies shifted to home office - is it any kind of concern for Globalworth, regarding the office properties market?

It is clear that this crisis is affecting most businesses worldwide. As far as the real estate market is concerned, for now, the biggest effect is for now on the non-food retail, restaurant and hospitality sectors, so having only about 5% of our rental income coming from such activities so far puts as in a relatively better position.  Of course, question marks and concerns exist in our sector too regarding the future and how social distancing and working from home will impact the office market – it is still too early to say.

The situation is very fluid and evolving, the overall situation will get worse and the real effects of this crisis have yet to materialize. Hence we are constantly analyzing the situation and we are ready for several scenarios making sure that on one hand we preserve cash flow and protect our income and assets and on the other, we keep close and continue to service the needs of our community of over 700 tenants in Poland and Romania with the same standards of excellence.

How do you approach social responsibility as a company in such extreme situations like pandemic?

Social responsibility, not only in these difficult times, means for us to give back, to help others. That’s why in April we announced the launch of the Globalworth Foundation in Poland and we have started the fight against the epidemic of COVID-19. The Globalworth Foundation is strongly involved in supporting the fight against the virus in Romania as well. Until now, our foundation allocates in both countries 550,000 EUR, for seven hospitals.

In Poland, as the first step, we allocated 200,000 EUR to help fund medical supplies for two hospitals - Wojewódzki Specjalistyczny Szpital im. dr. Wł. Biegańskiego in Lodz and Szpital Specjalistyczny in Chorzow. The funds enabled acquiring 21 beds, 5,000 surgical masks, 2,600 protective overalls and 7,500 protective masks (FFP2 and FFP3).

We also decided, together with tenants of Hala Koszyki, to start financing and delivering 3,000 meals for healthcare workers in Szpital Wolski in Warsaw for a month. The Globalworth Foundation has done a lot of great things in Romania over the years and now we will be able to support the needs in Poland as well.

What actions did Globalworth take to secure its building and properties in terms of healthcare?

The measures taken concern both the 700+ Globalworth tenants and tens of thousands of employees working at our buildings across Romania and Poland on a daily basis. Although many of them now work from home, for others the nature of their job doesn’t allow them to do so. We comply with all health and safety norms and have taken all necessary and appropriate relevant measures in our portfolio, especially in the common areas where the risks are highest.

We have heightened the measures in all our office buildings, and we have also implemented a very strict daily cleaning program at the end of the workday after our tenants have left the building. All surfaces with high traffic, such as receptions, stairs, lobbies, elevators, and toilets are disinfected with a special, extremely powerful product that destroys viruses, approved by the relevant authorities. These spaces are being cleaned every two hours.

In addition, Globalworth has placed dispensers with an alcohol-based disinfectant in all its lobbies. On all our screens we show videos with hygiene tips and measures that each of our tenants should follow, such as washing hands as often as possible, using the dispensers with alcohol-based disinfectant, how to use masks or how to sneeze or cough safely.

There is this popular belief right now that coronavirus pandemic will entirely change the world and economy. Do you feel that 'we're not going back' to what we are used to? And if we're not going back - what will the world and your business, market, look like after the pandemic?

We have learned a lot and there is still a lot to be learned. It is clear to all of us that we face a difficult and challenging period, with a significant impact on the global economy. We are facing a truly unprecedented crisis and perhaps one of the most important lessons is how we manage this uncertainty. The world will be different for all of us after the epidemic. Working norms, socializing habits, and traveling and holiday patterns will all be affected going forward, probably to a significant extent. In this case, I don’t believe we will go back to what we were used to.

Having said that, there are a lot of lessons to learn and we should still maintain a great deal of optimism for the future, even if during this perfect storm. New, ideas, technologies, and ventures will be created going forward, which will generate alternative or new sources of income for people and companies that we may not have imagined a few months ago. Above all, this crisis has brought society together, despite the extreme social distancing and quarantine measures. It has shown that solidarity is so vital both for the business community and society as a  whole.

In the meantime, we have a long journey ahead of us, we need to stay strong, we need to respect the rules and measures, to be responsible and to put all our efforts to get the market back to work as soon as possible.

Interview published on the Business Insider website. Check the Polish version HERE.