Remon Vos, CTP

An innovative, full-service commercial property developer, CTP specializes in meeting the growing need for high-quality business facilities in the emerging markets of Central and Eastern Europe (CEE). Real Estate Publishers asked Remon Vos, Co-Founder, Partner and Managing Director of CTP about the company’s current and future projects and the Czech market.

Can you tell us a few things about your company?

“CTP is a privately owned company, with a portfolio of €1.8 billion. We get financing from different banks, from ING and KBC from the Netherlands but there are also a few Austrian banks that are providing finance on a project level.

“The company was first established in 1998. Our first project in the Czech Republic, a full-service business park, was built in 2000. Since then we have continued to build business parks throughout the Czech Republic, and currently we have more than 25 business parks in the Czech Republic alone. In total we have completed 200 buildings with more than 400 tenants, out of which over 90% are multinationals mainly involved in manufacturing, such as ABB robotics, Honeywell, Lufthansa, SAP, Acer.

“Many of our clients came to the Czech Republic or to Central Europe 10 or 15 years ago for low-cost manufacturing, but what we see today is that these companies have invested greatly in their production facilities. Many of them consolidated and brought more business to the country, which means that during the crisis of 2007-2008, we were able to double the size of the company. Today we have a rental income of €110-112 million, which makes us the market leader in the Czech Republic. Our growth amounts approximately to 10% on an annual basis and most of the new buildings are being built for existing clients.

“We undertake the whole process of land acquisition, permitting, design construction and property management. In addition to the full-service business parks we have office developments in these regional towns, Spilberg in Brno, with 90,000 m² office space, is one example. We also have a similar building in Ostrava, the third largest city in the Czech Republic. These are actually very interesting locations for shared services center business, we have software developers for example, companies like Tieto from Finland, SAP, Lufthansa and others.”

Are you active outside the Czech Republic?

“We have sites in Slovakia and in Katowice, Poland and also an office in Bucharest, Romania, where we have bought sites and we are getting ready to build properties. However, today our business is mainly in the Czech Republic, where 90% of our properties are located and where we believe there will be future growth. Our existing tenants are supporting our new developments; actually more than 50% of new properties are being leased to existing tenants and built in existing business parks, so we actually utilize the land bank that we already have.

“There is a number of reasons why our clients are satisfied and bring more business to the Czech Republic; it is strategically located, with well-developed infrastructure, a good road network, international airports, but above all there is a good level of education, with many technical universities and a tradition in manufacturing. Therefore nowadays it is probably one of the best locations in Europe for these activities. That is why we expect significant growth.”

Is there a lot of competition?

“We have a number of colleagues who are involved in industrial property development, but the companies like Prologis or Goodman offer warehouse properties, which is only 25% of our business. In CTP we focus on providing property solutions for companies who are involved in manufacturing, which have very different requirements than a warehouse building. We make business parks with a variety of different buildings, different companies, and we do have some logistic service providers to support the companies in the business park.”

What have you got in the pipeline for next year?

“We have approximately 1.8 million m² lettable area, which is a mix of office, manufacturing space and retail space. We also have enough land to double the size of our portfolio and build another 1.8 million m². In the next three years we have plans to build approximately 750,000 m² of space. The land is ready for development within existing business parks. In our business that means that either we are talking to potential clients or we have a strong company in a business park who has indicated interest.

“Generally we avoid building on a speculative basis, so we only start building once we have a tenant lined up or secured. Since the land is prepared, we can build the building and complete the site usually within nine to 12 months from notice. We are also looking to grow more through acquisitions outside the Czech Republic; we could buy a business park or even a small portfolio in a different country.”

What do you see for the coming year in the Czech Republic? Do you see a lot more growth or decline?

“I think that some companies will survive, while weaker companies, who were not so well prepared or did not have a clear strategy are not active at the moment. As a result you see less activity, especially during the first half of this year there will be difficulties to secure finance, but probably it will get better in the second half of 2012. I think that during 2006-2008 there has been a certain oversupply, when everybody was quite enthusiastic about the opportunities. That is what we do not see anymore, no speculative developments.

“On the other hand there is a steady demand, the vacancy level has dropped and prices are stable. The Czech Republic is politically stable, they have a conservative approach when it comes to doing investments, but they focus on skills and they spend tax money on making universities better and giving opportunities. Furthermore, they continue investing in infrastructure, so I think overall we will see some growth there.”

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