We are not planning "mass" buildings. Interview to Money.pl

April 2021

“Home by Zeitgeist is a completely new concept, providing secure tenancy with no commissions or third party involvement. What's more, it's an online platform designed to standardize the rental process for tenants. The solution was recently launched in Prague and offers services such as a 24/7 hotline for tenants.”- says Peter Noack, CEO of Zeitgeist Asset Management. Interview by Agnieszka Zielińska.

PRS market is currently developing very dynamically in Poland. What are the nearest investment plans of Zeitgeist in this segment (I mean both new investments and realized ones).

Until recently it could be said that the PRS market is at an early stage of development. The share of institutional leasing is estimated at about 1 to 3 percent, depending on which measure we take. However, the current situation allows us to observe dynamic development of this segment, given the signs of modern times, full of uncertainty, so people do not want to be tied to a specific place for many years. The development of the institutional rental sector has been also boosted by the pandemic. It is also worth mentioning that we have a gigantic loophole in supply and yields at the highest level in Europe, reaching 5-6 percent, while in Western Europe it is about 4 percent. In Poland, a very small percentage of apartments are currently rented out, while in Germany or France, almost half. In addition, there is a social factor, which is the change of mentality of the young generation, but also the search for convenient alternatives by people in the fall of their lives. So we expect that in the coming years, institutional rental will have its own structures, which are being formed right now.

Zeitgeist Asset Management, when entering Poland in 2016, saw the huge potential that undoubtedly lies in our country. We started with one project and now we have eight - in Warsaw, Krakow, but also in Gdansk, where we are entering the market with 200 apartments. In addition, we are interested in developing operations in Wrocław, Poznań, Łódź and Katowice. Our plans in Poland are indeed ambitious, but they result first of all from the strong commitment and determination of our institutional investors. We have the resources and the expertise, so we are looking for the right opportunities to grow in this market.

One of our biggest investments is the purchase of a complex on Nowogrodzka and St. Barbara’s streets in the center of Warsaw. It is an impressive space in the very center of the city. We are currently working on creating a very attractive project and we are starting to renovate the first two buildings, which will be transformed into residential buildings for rent. We can see that with this purchase we have been recognized in the market, because as in the real estate market, scale matters. After this transaction, subsequent transactions have become easier - because we have gained the trust that we can handle even a very large project.

What investment goals does Zeitgeist have for itself in the coming years?

Many people can't afford to buy housing right now, so we see that they need the opportunities that institutional renting offers. Especially now, when the job situation is often precarious and buying an apartment is associated with high risk. On the other hand, young people are looking for larger apartments, including space for a home office or more space for children. This is what we offer our clients - larger apartments with relatively low rents. We always try to match available locations with a wide range of clients in order to provide them with a pleasant place to live - this is the motto of ZEITGEIST.

As far as our goals are concerned, we plan to build an extensive portfolio throughout Central and Eastern Europe, including Hungary. We want to keep the properties in our possession and remain as a landlord. We do not exclude selling some properties at the same time, but this is a prospect to consider in a few years. Our overriding goal is to maintain assets in the long term. We are also not planning "mass" buildings with as many apartments as possible, we are leaning more towards properties with max. 400 units. By the end of this year, we will have 200 apartments available in Gdańsk. They are currently under construction. This will be a very attractive project that will certainly attract a lot of attention when it is ready. As part of this project, we are introducing our new brand, Home By ZEITGEIST.

Another important investment is located in Warsaw's Praga district, at Wrzesińska Street. Here, we will soon present a restored historic building along with a new building connected to it, with a similar design, consistent with the tenement. The building will be completed in late 2022/2023. After these two projects, the next one, which we will make available for rent, will be the mentioned complex at Nowogrodzka and St. Barbara's Streets. By the end of next year we assume that we will double our institutional lease offer. In the five-year plan, following the example of the markets in Central and Eastern Europe, we intend to take possession of several hundred apartments in each of the seven major Polish cities.

How will the leasing of apartments look like in practice? Will it be done, for example, through some kind of Internet platform?

Our first project in Poland, the "Czyżewskiego 34" estate, located in Gdańsk-Oliwa, is an example of an operational model. Gdańsk apartments will be finished "turnkey", so tenants can move into them immediately. The investment consists of four residential buildings with underground garages and units ranging in size from 36 to 65 sqm. The development will be completed in spring 2022 under a new brand - Home by Zeitgeist - which includes serviced apartments available for long-term lease.

Home by Zeitgeist is a completely new concept, providing secure tenancy with no commissions or third party involvement. What's more, it's an online platform designed to standardize the rental process for tenants. The solution was recently launched in Prague and offers services such as a 24/7 hotline for tenants who encounter problems for example with damages. There are even plans to allow tenants to sign leases through the platform. These opportunities have been created to accommodate the requirements and time constraints of the residents. What's more, all apartments, including service, will be offered directly by the building owner. We believe that this will be an attractive solution, especially for corporate clients who need housing for contract employees. With the style of solutions that pass the test in the world, residents will be provided with professional apartment service and will be signed with one partner. This guarantees security of contract, an easy and transparent rental process and stability of mutual relations.

Thus, we prepare everything that is currently expected by the tenant. Deciding on institutional rental gets a ready-made product - the same as on the primary developer market - but in a rental formula.

The offer is an answer to the needs of mobile, open to changes people at every age - from young, students, to middle aged tenants with kids and also as well an older generation, for whom flexibility and investing in their own competences are more important than the feeling of ownership. Our services are also addressed to the 60+ generation, i.e. people looking for good quality serviced apartments.

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