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Orange Plaza Financial Center

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Asset management at its finest. Orange Plaza Financial Center serves as an example of how to adapt to the ever changing business requirements, typical for retail and office space rental.

PLOT AREA

1 700 sqm

OFFICE AREA

1 631 sqm

COMMERCIAL

892 sqm

TOTAL AREA

3 299 sqm

PROPERTY
1
  • emerged in 2000 as a 4-storey shopping centre, with the size of ca. 2 500 sqm GLA
  • located in the very heart of the city (Piotrkowska St. and Piłsudskiego Ave. junction)
  • one of the most modern commercial buildings in Lodz at the time
CHALLENGE
2
  • direct competition from Galeria Lodzka, a big shopping centre opened in 2005 and located in close proximity
  • tenants vacating and consecutive difficulties in finding new occupiers
  • previous tenant-mix strategy required cutting lease rate, rendering it unprofitable
APPROACH
3
  • property repositioning – shopping mall turned into an office building
  • maximum use of the existing facilities which allowed to minimise capital expenditure
  • new tenant-mix strategy and re-leasing banks/financial services/insurance companies
EFFECT
!
  • the building became 100% leased within less than 12 months and continues to be up to this date
  • 5+ year lease deals acquired on more than 50% of the gross leasable area
  • 90% of the tenants are reputable companies (blue chip) from the financial and insurance sector
From diary of the asset manager

Shopping mall turned into fully leased office building

Sometimes managing real estate assets feels like a long journey: seemingly unvarying but, upon closer inspection, constantly changing, making you adapt to new climates. The story of Orange Plaza Financial Center captures perfectly our skill at managing an asset on a highly changeable market.

In case of Orange Plaza we were entrusted with the management of repositioning process. This includes change strategy to Financial Plaza, product re-definition, obtaining the permits and re-commercialization with a completely new tenant–mix . Finally we were also hired as an asset manager and property manager. In the then-economically struggling city of Lodz(whose name translates into English as “boat”), it took a fair amount of courage and business insight to catch the wind in your sails…

Set sails to commerce!

Our goal was to integrate the project seamlessly into Lodz’s shifting landscape. “Polish Manchester”, as it is commonly called, was still recovering from the decline of the textile industry, following the political transformation of 1989. The turn of the century, however, saw a slow re-emergence of commerce. Being responsible for exploring new investment opportunities, we chose to draw upon what is probably Lodz’s most distinctive hallmark – Piotrkowska Street. As it turned out, the decision paid off!

Uncork the champagne! 100% lease for the first time!

Orange Plaza, located at the junction of the two main communication arteries in Lodz, emerged as a 4-storey shopping mall. The property’s strengths lay in its perfect location, respectful design, innovative utilities and exceptional standards at the time. In 2000 Orange Plaza was one of the most modern commercial buildings in Lodz, offering suspended ceilings, access control and air conditioning, among other things.

Course change: financial and insurance sectors

Six years later Orange Plaza became Orange Plaza Financial Center. The decision to shift from a boutique shopping mall to an office building with retail functions stemmed from two major factors. Firstly, the services sector began its triumphant march towards the city. Secondly, Galeria Lodzka – one of the first big shopping centers in Lodz – started to dominate the local retail market.

Instead of pursuing an unprofitable tenant-mix strategy and cutting lease rates, we decided to make the most of Orange Plaza’s qualities and its direct proximity to excellent administrative, commercial and hotel infrastructure. The building was reborn thanks to Orange Plaza’s functional arrangement, including mechanical ventilation, full ICT wiring installation, optical fibre technology and the addition of skylights to the upper floor.

Our course is firm, commercial viability is secured!

The refurbished Orange Plaza makes for a perfect location for offices, banks, and financial services.To date, our list of tenants includes such renowned brands as Allianz Bank, Allianz Insurance, AXA Insurance, BOŚ Bank, and Getin Bank.

Orange Plaza Financial Center
Captain’s log
1999 Construction begins
2000 The building is operational
2001 Uncork the champagne! 100% lease for the first time!
2005 Average lease rates start to drop. Time to take evasive action!
2006 Course change: financial and insurance sectors
2007 New goods have arrived: conversion of retail space into office use with mechanical ventilation, full ICT wiring installation, optical fibre technology and the addition of skylights
2008 - Our course is steady, commercial viability is secured!

Jaracza 47 Prestige

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Commercialising historic buildings rarely tolerates corner-cutting. Jaracza 47 Prestige proves that thorough renovation for lease purposes can sometimes bring quality and prestige appreciated by the biggest brands.

PLOT AREA

724 sqm

OFFICE SPACE

965 sqm

RESTAURANT

239 sqm

TOTAL AREA

1 334 sqm

PROPERTY
1
  • 19th century private residence originally build in Neo-Renaissance style
  • boutique office space for high-profile tenants (law firms, insurances, finance)
  • located within New Centre of Lodz, 5 minutes’ walk from the main railway station
CHALLENGE
2
  • capital-intensive property purchase and renovation works – risk in paying into the real estate
  • little room for manoeuvre regarding building design due to its historical value
  • no parking spaces which poses a tough challenge when it comes to office buildings
APPROACH
3
  • bank financing which allowed to minimalisation of equity capital
  • additional contemporary storey of office space and modern technologies integrated into building’s historic vibe
  • successful negotiations with the neighbours - regarding additional parking spaces
EFFECT
!
  • prestigious office building that dates more slowly than the modern edifices
  • 100% lease at 2x higher price while other restored buildings suffer high vacancy rates
  • prestigious tenant profile exemplified by Baker & McKenzie – increased property value
Revitalise and commercialise

Why is cutting corners simply not worth it?

Restoring historic buildings to their former glory for business purposes is never easy and rarely tolerates a lick-and-a-promise approach. Jaracza 47 Prestige, a 19th century tenement, required significant amounts of capital, careful investment planning and a deep understanding of revitalisation processes. It also proved that with hard work come great rewards.

A purchase and complex renovation of a historic tenement tends to be rather capital intensive. In order to optimise equity risk capital costs, a special purpose vehicle was established as a limited liability company. This allowed us to obtain an advantageous bank financing arrangement and to release the capital involved. In a case like this, proper risk management becomes crucial.

Full-fledged revitalisation

Jaracza 47 Prestige project can be viewed as a full-fledged revitalisation, including both exterior and interior. We equipped the property with modern amenities for its today’s users: surveillance, monitoring and access control system, ICT network, fibre optic cable, air conditioning, quiet, high speed lift, and dropped ceilings. We paid attention to the smallest of details, including 19th century polychromed and gilded decorations.

When going halfway is no way to go

Why go to such lengths? First of all, historic buildings age at a much slower pace than modern ones, if given proper standard. The more you spend now, the more you save later. But where is the line drawn? Our budget was bigger than the other average revitalisation projects in Łódź (usually limited to mere facade renovation), although it allowed us to raise the asking rent price by 35%, while other similar projects continue to suffer high vacancy rates.

Maximising property’s potential

Careful planning and adequate adjustments to the building allowed us to achieve continuous lease, making for a stable, low-risk investment for our client. The project would not be feasible were it not for successful negotiations with the neighbouring property owners (new parking spaces) and the City’s Historic Preservation Officer (additional storey of office space).

A matter of prestige

Due to the highest building standard and its excellent location, Jaracza 47 Prestige makes for a perfect place for high-profile tenants. Among its residents one should mention Baker & McKenzie – one of the biggest international law firms in the world, which decided to locate its second Polish branch office in Lodz.

Piotrkowska 120


Anyone can sell a property. Not everyone can do it in the most profitable way. Piotrkowska 120 is a story of a +200% value increase and a successful sale in less than one year.

PLOT AREA

350 sqm

OFFICE AREA

780 sqm

COMMERCIAL

196 sqm

TOTAL AREA

1208 sqm

PROPERTY
1
  • Neo-Renaissance private residence dating back to 19th century, designed by Gustaw Landau-Gutenteger
  • located on one of the longest commercial thoroughfares in Europe
  • office space (780 sqm) combined with retail space (196 sqm)
CHALLENGE
2
  • high tenancy fluctuation on Piotrkowska street at the time
  • low creditworthiness of the former tenants who didn’t add to the prestige of the place
  • low investment liquidity which rendered potential sale rather difficult
APPROACH
3
  • thorough building restoration, resulting in a more creditworthy tenant base
  • shift to triple net agreements with the tenants which brought steady income with a relatively low risk
  • special purpose vehicle – improved management of the liabilities and isolation of financial risks
EFFECT
!
  • protection from possible operational or insolvency issues related to vacancy factors and tenant improvement costs
  • 200% return on Investors equity
  • successful sale in less than one year of improved asset to institutional quality product
Acquire. Commercialise. Cash in.

+200% property value increase since aquisition and successful sale in less than one year

Due to the small fluctuation of demand and supply, real estate purchases are usually considered a safe investment form. Of course there are risks – high capital intensity and low investment liquidity to name a few. Piotrkowska 120 project shows that with right property management and effective commercialisation these obstacles may be mitigated and significant profit can be made.

Acquire

In the case of Piotrkowska 120 private residence we were entrusted with its acquisition, management, lease strategy and commercialisation process. Due to the credit sensitivity of the whole operation we started off with creating a special purpose vehicle.

SPV allowed us to improve the management of the asset and liabilities and helped isolate the financial risk on behalf of our client. Synthetic lease expensed on the investor’s income statement rather than recorded as a liability on the balance sheet meant protection from possible operational or insolvency issues.

Commercialise

To avoid vacancies and ensure continuity of profitable lease, we needed to verify actual demand and tenancy structure. We had to establish a tenant profile that not only added to the prestige of the place, respected the property and paid its rent on time, but was also feasible from the demand point of view.

We decided to draw upon Piotrkowska 120’s representative location, immediate vicinity of the town hall, beautiful Neo-Renaissance architecture, and its rich history, dating back to the 19th century. After a thorough restoration we managed to re-create elegant office spaces and commercial premises, successfully rented to legal practitioners, stylish clubs and exclusive boutique stores.

Cash in

We turned Piotrkowska 120 into a triple net leased property – a fairly popular investment vehicle for investors seeking steady income and a relatively low risk. Therefore we were able to act on behalf of Vendor and secure sale with +200% return on equity. Our client had no concern for vacancy factors nor tenant improvement costs since paying the building's property taxes, building insurance and maintenance fell on the lessee shoulders.

High credit worthiness of our tenants allowed us to increase the capitalization rate. Having managed the property for 14 years we increased its value by 200%. Due to capital appreciation and low investment risk, Piotrkowska 120 guaranteed high return on equity ratio to the new buyer. It is why we managed to sell the property in less than 12 months.

OFF Piotrkowska Center

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OFF Piotrkowska Center in Lodz, hailed by National Geographic as one of the seven wonders of Poland, showcases perfectly how to breathe new life into post-industrial architecture and bring out new opportunities for creative business.

PLOT AREA

12 898 sqm

OFFICE SPACE

1 814 sqm

RESTAURANT

3 030 sqm

USABLE SPACE

5 695 sqm

PROPERTY
1
  • historic cotton factory complex dating back to 19th century
  • 5 500 sqm of leasable space located on approximately 1,3 hectare
  • located in the very heart of the city, in the most attractive part of Piotrkowska St.
CHALLENGE
2
  • difficult commercialisation - low technical standard of the buildings and little capital to invest
  • existing tenant-mix unstructured, tenants who were bringing the property’s value down
  • thorough renovation would be very capital intensive and required an alternative plan
APPROACH
3
  • new tenant-mix based on creative industries - gradual increase of property’s value
  • place making based on rich event repertoire worked out collectively with the tenants
  • engaging tenants’ capital in renovating the property at the expense of lower rents
EFFECT
!
  • firm footing for further development projects: two new office buildings and cowork space for tech companies
  • first place in the Seven Wonders of Poland contest held by National Geographic Traveler
  • a demand for leasable space that exceeds the supply, more control over OFF’s identity
Always have an alternative

Placemaking as a motor for change

When speaking of revitalisation, people and their ideas come in the first place, only followed by actual building renovation. OFF Piotrkowska Center tells a story of a degraded quarter that became one of the most valuable plots in the city, with minimum capital engagement.

Old buildings can often be seen as both a problem and an opportunity. This perspective is understandable, given the fact that thorough renovation, more often than not, turns out to be very capital intensive. Such was the case of the former cotton factory founded by Franciszek Ramisch. Ambitious renovation plans, which were about to bring new functions to the historic complex, eventually became thwarted by the global financial crisis, making the whole investment unprofitable. What we needed, new strategy, new idea, an alternative. Execution!

At the crossroads

We were given a choice: either continue with existing tenants who were bringing the property’s value down while ensuring steady and relatively profitable income, or begin from scratch. We decided to tap into the unique, unhampered vibe of the postindustrial complex and placed our bet on creative industries – an integral part of Łódź’s new identity. At the expense of lower rents, we engaged tenants’ capital into renovation of their premises. The business model we worked out over the years became an alternative to capital-intensive formats such as traditional shopping center.

A place that became OFF

Responsible asset management meant a careful selection of tenants. We had only one condition: bring something new to the table. Be creative. Offer something unique – something you won’t get from a chain store. We based our placemaking strategy on a rich event repertoire, worked out collectively with the tenants. This allowed us to breathe new life into post-industrial complex, encouraging urban art, offbeat business ideas and most importantly – people. The outcome? First place in the Seven Wonders of Poland contest, held by the National Geographic Magazine.

The future

We never stop looking for new ideas to bring even more life to OFF Piotrkowska Center. The strategy we introduced allowed us to increase the property’s value over time, making further revitalisation financially viable. With the introduction of new, multifunctional projects – TEAL OFFICE and SEPIA OFFICE – we wish to prove that work and life can be perfectly balanced.

Art Modern

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Create a prestigious apartment complex on a plot that’s not exactly fit for residential development? Successfully sell the apartments at prices 10% above market value? This is ART MODERN – a development that has become an exemplary case of project management.

PLOT AREA

23 000 sqm

RESIDENTIAL

19 250 sqm

COMMERCIAL

2 080 sqm

APARTMENTS

374

PROPERTY
1
  • medium-sized housing estate - 374 apartments (including 12 lofts), multi-storey car park, non-residential premises
  • old factory site with a historic power plant building to be revitalised into modern lofts
  • location that combines proximity to the city centre with suburb-like surroundings
CHALLENGE
2
  • unfavourable development plans for phased development
  • fairly competitive and cost-driven housing market in Lodz
  • fairly dilapidated neighbourhood, despite the attractive plot location
APPROACH
3
  • special planning permission which allowed for the development of more apartments on the plot
  • appropriate funding model with minimum shareholders’ equity
  • placemaking plus an effective marketing and sale strategy – a place with a story and a history
EFFECT
!
  • investment broken down into more manageable and financially feasible phasing
  • successful sale of the apartments at +10% prices above average market prices
  • high return on additional marketing costs and a recognizable project brand for future phases of the development
The art of investing

Textbook management of a conceptual housing project

When everyone on the primary market offers the same end product, what can you do to attract new clients? One way would be to lower the development standard and asking prices. But that is probably the last place you want to go. ART MODERN proves that ambitious development projects can survive the competitive market and bring new quality to the urban landscape.

Act one: minimise the risk

Due to the project’s sheer scale the investor requested an efficient risk mitigation plan and a fitting funding model, providing minimum shareholders’ equity and preventing unassisted financing. To that end we created a special purpose vehicle and devised a development schedule for over 300 apartments (including 12 modern lofts located in a revitalised power plant), breaking it down into more manageable and financially feasible stages.

Act two: divide and rule

Our plan required certain tweaks to the local spatial development plan. Successful negotiations with local authorities allowed us to divide the original plot into several smaller ones, making it easier to plan and manage individual development stages. We also acquired special planning permission, normally granted to the inner city built-up area. This allowed us to develop more apartments than we normally would be able to, on a plot far more attractive than those located in downtown, since Lodz Gorna district had just began its wide-scale revitalisation processes…

Act three: commercialise

One of the main reasons behind ART MODERN’s success was its unique story, spun from the very beginning of the development process, drawing from the local modernistic art and traditional architecture of Lodz. Rather than crude residential estate, the project has been designed and marketed as an “uptown” place to live and work, brimming with highly functional apartments and an excellent commercial, recreational and cultural infrastructure of Lodz Gorna district.

Act four: receive the applause

Precisely defined residential products, proper apartment mix and effective engagement of the target group granted us a high return on marketing investment and a successful sale at 10% higher asking price. On such highly cost-driven market as Lodz, it should be considered an achievement and a proof that creativity in investments, combined with careful planning, is always worth the extra mile.

INTERNATIONAL EXAMPLES

Our company is fully independent both financially and structurally. While working closely with partners from all around the world, we remain capable of handling both small and major projects. Therefore we are able to offer balanced and objective advice covering different areas of the real estate market.

While operating independently, OPG Property Professionals enjoys the privilege of being a vital part of a recognised, multinational investment & development company a Gleeson Properties Development. Our associates are based in Dublin, Ireland, although the group’s property portfolio is spread geographically throughout Ireland, the United Kingdom, the United States and Poland. The experience we’ve acquired over the course of our mutual working partnership has allowed us to broaden our horizons. Because bright ideas and professional service know no borders.

Blackhall Court

RESIDENTIAL

Blackhall Court

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The re-engineering and design of an old textile factory to an upmarket inner city residential development of 100 large apartments including the conversion of three Victorian town houses into residential use.

The Mall

COMMERCIAL

The Mall

Tullamore, Irlandia / 998 m2 LEASE AREA

An historical and exclusive 1901 Town Centre department store redeveloped to accommodate retail and office space (under management). Constant attention is needed for the preservation and upkeep of the buildings detailed craftsmanship.

Aldgate Tower

OFFICE BUILDING

Aldgate Tower

LONDYN, UK / 30 000 sqm LEASE AREA

Comprising 30 000 sqm over 19 floors. This Wilkinson Eyre designed grade ‘A’ office building was the first large speculative development in the City of London after the financial difficulties of 2008. Completed in 2014 and 100% let.

Snook Bight

MARINE & YAHT CLUB

Snook Bight

FORT MYERS FL, USA / 1,6 HA PROPERTY AREA

The full redevelopment of an old marina to an exclusive operating marina incorporating 277 dry and wet storage slips. Including restaurants, yacht club and other premier marina facilities. Managed and built to strict US environmental codes.

Hyde Court

RESIDENTIAL

Hyde Court

DUBLIN, IRLANDIA / 83 APARTMENTS

A bespoke 83 high-end residential apartment development which introduced winter gardens to Ireland for the first time. Including four retail units at ground level. Constructed on complex foundations within an historical city boundary.