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Dimitris Raptis interview in Investment Reports

Globalworth is a publicly listed leading real estate company operating across Romania and Poland, that acquires, develops and manages commercial properties, mainly in the office segment. The company has over 200 employees and a portfolio mounting to EUR ~3 billion.


Congratulations on the new role as CEO of Globalworth Group as of December – what energy do you bring into the new position after your many years with the company?

My journey over the past eight years was really fascinating – we started off small in 2013 when the listing on London’s AIM stock exchange raised EUR 55 million as a Romania-focused office player, and here we are today just over the EUR 3 billion mark and the largest office investor and landlord in the CEE region. The timing was excellent as not many people paid attention to Romania’s property market back in 2013, it was still hurting in the aftermath of the 2008 crisis. But numbers aside, creating an organization that simply did not exist in the office market segment is what set us apart – we always thought as a long-term institutional investor focused on prime assets, first in Romania, and as of 2017 also in Poland.

What I care about – and this should not be underestimated just because it is spoken of often – is the quality of my team and our unwavering focus on customer service, it is what we prioritize and why we keep thriving. It keeps us close to clients, a phone call away, and they seem to appreciate it. That, and we are here to stay.


When employing this long-term, the here-to-stay vision it is all the more important how you choose your markets – why these two, and how do they contrast?

Romania is pure legacy, Globalworth’s founder Ioannis Papalekas was already in business here since 2001 as a private real estate entrepreneur and saw a market opportunity again in 2012-2013 when I also joined him from London. Poland was also an obvious choice for us, as the largest and most sophisticated market in CEE, we were confident we could compete there. Both countries also have key geopolitical positions.

As for the differences, some are quite visible – starting with infrastructure, from airports, motorways, rail, where Romania still lags considerably behind. There have been improvements in the past few months in absorbing EU funds, which are very much needed in this respect. One of the reasons we entered Poland was to overcome some of the hurdles we met in Romania and gain access to new forms of capital.

Romania’s biggest problem is branding – we have had so many partners, clients, investors coming here and not believing their eyes, as they have been negatively predisposed by a number of stereotypes and clichés. It is a shame to suffer from this unfair perception.

Luckily, in recent years this is beginning to improve, especially since Romania is becoming a hub for entrepreneurship and innovation, particularly in the IT sector, with unicorns such as UIPath, but so many others – this is creating so much buzz and I think will be a game-changer. And make no mistake, the substance is all here – there are multinationals present, shared services, BPOs, automotive, agriculture and so many other booming industries. What you are doing is great, and we need to do even more to broadcast all this far and wide.


Talking about tech, Globalworth Square is one of the most technologically advanced buildings in the country, which I am sure does not come cheap – why prioritize this?

People have been talking about smart buildings for some time now, and real estate has honestly speaking been a dinosaur in terms of embracing technological progress. Strange, given that it is one of the world’s dominant industries, with high pressure to evolve. The coronavirus pandemic has accelerated the way people think about this topic and turned thoughts into action. People are still being cautious now, and for good reason, but surely and safely people will be coming back to the office over the coming period, and technology is one of our many allies in making this transition back to work run smoothly. As an example, at Globalworth Square we have touchless access into the building, a simple yet key aspect. It is also helping us build a sense of community, alongside art, music and many other activities that can be accessed via our application.
And last but not least, tech is closely interwoven with sustainability by helping us build more energy-efficient buildings, from lower emissions to car charging stations. At Globalworth Square we are also producing our own energy through rooftop PV panels.


Other than accelerating technology, how badly has the pandemic hit your office segment at this stage, and how does that contrast to your other assets, in the industrial space for instance?

Yes, the office model is currently being questioned, it sits somewhere in the middle between the badly hit retail/hotels and the thriving logistics spheres. The impact for us has not been too significant so far, however, we needed to have many discussions with our tenants and mitigate risks together. This is where our model helped us, the long-term relationships helped negotiate and find common ground. In some cases, we had to offer “rent holidays”, concessions, deferrals in exchange for extensions for the future. Some of the smaller tenants we simply helped out. And at the end of the day, we stayed robust.

However, there is no question in my mind that the office model will continue to thrive once the current crisis is behind us. Most employees are very keen to come back to the office and mingle, brainstorm and socialize with their colleagues. At the same time, I am a firm believer that you cannot built a corporate culture and foster growth in a remote working environment.

Logistics is a different ball game – we have three locations across Romania and we are seeing great demand, broadly from two industries – e-commerce and F&B retailing. There is also some pharma, and in Timisoara of course, the bulk of the demand comes from the automotive industry. Renault recently extended their lease in their facility outside of Bucharest, thanks to its strategic location close to their main factory.


What would you like to achieve with priority in the coming period?

We have to differentiate between short and long-term. For the short term, we all have to acknowledge that at least 2021 will continue to be challenging. The vaccines have brought hope, but it will still take a while for a sufficient portion of the population to get vaccinated. Our tenants are feeling a lot of pressure from their employees to come back to the office, working from home has been very tough on many. The big question mark is how? When? The answers all vary, from asking for breathier office spaces to looking at a gradual return.
From our standpoint, we will simply continue promoting our current portfolio and assets to new tenants for the office segment and extend our logistics portfolio.

We are in the privileged position to have more than half a billion EUR cash at our disposal, but of course, the purpose is to invest it wisely – 2021 will be a year of working side by side with our tenants, together creating the office of tomorrow for the long run. I see significant growth opportunities from 2022 onwards and we are ready to capitalize on them.


What is your message about Romania and Poland’s real estate markets?

We are talking about two markets that are emerging as winners from this crisis. Poland and Romania are the obvious choices for multinationals looking not only to cut costs but find the right human capital. Both markets will continue to witness substantial growth and FDI, which automatically translates into growth for the property segment – oh yes, there is room for optimism here, and this is where being a long-term investor really pays off.