Preserving your team, corporate culture and growth potential are the key factors that will lead companies out of the current crisis.
Mr. Kralev, you are managing BS Properties, which is part of BS Group of Companies. Tell us more about the property management business that are the core activities of the company.
The main expertise and business activities of BS Properties are Asset Management, Property and Facility Management. We are focused on development and execution of our own residential and public building projects. Our services and expertise include all areas of the investment process – market assessment, ongoing projects, clients’ expectations evaluation, future urban planning and development changes. After carefully reviewing and analyzing this data, we evaluate the investment opportunities and we choose a suitable project that matches our requirements for scale, characteristics and concept. The next steps in the process are creating a Conceptual Project, Planning, Realization, Sales and Management. This is a long journey, full of challenges and new opportunities. This it is the purpose of our work – to create value, starting from scratch.
How is the COVID-19 crisis affecting the real estate business?
No one was prepared for the COVID-19 crisis. Some industries are facing major losses and are currently threatened to shut down. The construction industry covers the basic human needs for a place to live, place to work, or shopping areas, thus it is not yet seriously affected by this crisis. The nature of those needs has not changed, despite the crisis. People will always need new residential areas, entertainment areas, places to work and socialize.
Business Card Tihomir Kralev is Head of Property and Facility Management at BS Properties, part of BS Group of Companies. He has over 15 years of professional experience in the real estate business. Tihomir graduated in Law from the South West University in Blagoevgrad, he is member of the Supervisory Board of the Bulgarian Facility Management Association and certified Facility Manager by the WIFI Academy in Austria.
Regarding office buildings, how are companies adapting to the current situation and how are they changing their workplaces?
As I said, the businesses were not prepared for this situation and there was only one possible reaction – to send their employees home. Many factors influenced that choice and the most important one is the fear for our health. In my opinion, we must change and adapt out understanding of a workplace – it should not be a small place of 6-8m2 per employee, doesn’t matter If we speak about open space or separated office areas. Modern work habits require more space both at home, and at work. Following these trends the employers must be able to meet these needs. More and more studies focus on the effects of working from home on people’s psychic. It is a well-known fact, that the human mind needs a comfortable living and working environment to reach its full potential. Havong said that, I am convinced that after we overcome the COVID-19 pandemic, people will insist on returning to their offices. According to me, a professional cannot work solely from home and be 100% effective for a long period of time.
BS Properties is a member of the Association of Commercial Building Owners in Bulgaria and the Bulgarian Facility Management Association. How is the industry planning to cope with the negative effects of the pandemic?
To effectively handle the current challenges, we need the support of all participants in this business. From one side there are the banks, because of the funding they provide to commercial building projects. Owners of commercial buildings are another key player, since some of the tenants might be facing financial difficulties, especially the ones involved in the restaurants, shops and tourism sectors. Last but not least, the tenants themselves need to understand that owning and maintaining such large buildings is always linked with longstanding engagements and large investments, secured by lease agreements and conditions that have to be respected by all parties. In reality, the expenses for rent are not such a large part of the budget as they used to be 10-15 years ago. The rent rates are similar to those from 2010, meanwhile the salaries and standard of living have increased significantly. Therefore, preserving yours teams, corporative culture and the growth potential are the key factors that will lead companies out of the current crisis and further define their future.
What are your expectations for the real estate market in the coming year?
The office sector will be ‘on hold’ while the companies are adjusting to the new working conditions. This will probably happen after the peak of the pandemic. Currently, we cannot expect that with so many daily cases people will return to their offices. For the next year, I expect that people will get tired of working from home and the office spaces will be able to provide a safe and comfortable working environment. The residential sector will continue to grow steadily. With the necessity to partially work from home, the demand for larger living spaces will also increase. I expect larger companies to provide new ways of funding home office practices. After all, the home will become a second working place and the employers might need to partially cover the expenses for it.