In June 2021, Cromwell promoted Justyna Filipczak to Head of Central & Eastern Europe (CEE). As Cromwell’s largest region in Europe, CEE has more than 40 real estate and finance professionals managing over €1.1 billion / A$1.75 billion of office, retail, logistics and light industrial assets in Poland, Czech Republic and Slovakia.
In her previous role as Head of Finance and Operations Justyna led Cromwell’s response to COVID-19 in the region. This involved overseeing negotiations and lease renewals for more than 500 tenant-customers in the region, as well as the acquisition of 12 logistics and light industrial properties in the Czech Republic and Slovakia on behalf of Cromwell European REIT (CEREIT).
1. Tell us about your career to-date? How did you get to be Head of CEE?
After university, I joined General Electrical (GE) on a graduate recruitment programme in Poland. This was a fast-track finance programme combining intensive study with four, six-month work assignments which involved working in the UK and Ireland. This was my first experience working abroad and an invaluable introduction to working in cross-functional, multi-national teams.
In 2007, I joined GE Real Estate, based in Prague. That was the start of the Global Financial Crisis, which obviously had huge implications for the real estate sector but also provided an amazing learning experience for me.
The GE investment management platform was acquired by Valad Europe, which in turn was subsequently purchased by Cromwell in 2015. Since then, I’ve spent most my time working on the financing side of acquisitions, disposals and re-financings, as well as a wide range of operational efficiency and improvement initiatives.
I left Cromwell in 2018, returning in 2019. My time away gave me an outsider’s perspective on the strengths of the organisation, as well as invaluable lessons from my previous employer. I began to miss the Cromwell culture and values, so I returned as Head of Finance and Operations and now, I’ve recently been given the privilege and honour of leading our CEE platform.
2. Describe Cromwell’s CEE platform.
Currently, we are present in Poland, Czech Republic and Slovakia, but historically have also been active in Hungary and Romania. We have over €1.1 billion / A$1.75 billion of assets under management, 31 assets spread across five mandates with a gross leasable area of over 788,000 sqm and 571 tenant-customers. The portfolio is spread across four different sectors being: retail (49%), offices (33%), logistics and light industrial (18%).
Our team consists of more than 40 real estate professionals based in Warsaw and Prague, who also manage assets in Slovakia. We cover the full spectrum of real estate services including fund and portfolio management, development, asset management including leasing and finance, reporting, accounting and tax, and financing and debt.
3. What has happened in CEE/Poland over the last 18 months or so?
When the pandemic began, the Polish parliament quickly passed the COVID-19 Act with the intention of protecting the economy through job securing initiatives. While this was well-intentioned, it was executed quickly and created much confusion. Four separate lockdowns created additional challenges for commercial life across Poland. At times there were only grocery shops and pharmacies open.
Due to little warning before each lockdown, we found ourselves scrambling to understand the legal implications for Cromwell, our tenants and their customers. Many of our tenants suffered financially and we’ve spent considerable time on negotiations addressing their concerns and requirements.
4. What challenges has the COVID-19 pandemic provided to you personally / Cromwell?
As a working mother, my family’s wellness and health is paramount. During the initial stages of the pandemic, I spent considerable time understanding how to protect my family, and also Cromwell’s employees in CEE, from getting sick.
Looking back, I’m sure there were some bad moments for everyone as we all struggled to cope with personal and work pressures. My biggest takeaway though has been our flexibility and adaptability with which we all responded to the crisis. It makes me feel very proud to be leading this team.
5. What do you believe are the main challenges of managing a workforce in this environment?
COVID-19 impacts individuals in different ways, so it’s important to find the right balance between the business and employees. Those with underlying health issues may be more reluctant to commute and place themselves at risk of infection. Employees with domestic responsibilities such as parents home-schooling their children during lockdowns may be unable to work at the office. Younger employees may want to come into the office to maintain contact with colleagues.
In my opinion, keeping lines of communication open is very important. The paradox of being contactable 24/7 is that the personal element is often neglected. There’s connection, but not necessarily communication. Now, more now than ever, there is a need for teams to reconnect at a personal level.
6. A lot has been written about the future of the office. What’s your view?
I expect the pandemic will have a long-lasting impact on the workplace. Whilst the office sector was already evolving to meet changing demands, COVID-19 will accelerate this process. There will be an increase in flexible working patterns as people seek a better work-life balance, and this will drive development and adoption of new technologies, particularly those which improve collaboration between people, regardless of location.
Despite this, the demand for office space will remain. Offices will increasingly be used to attract and retain the best talent, as well as an embodiment of the company brand and culture. The location and quality of the building will remain important, and there will be an increased focus on employee wellbeing within the working environment. The office will survive!
7. Where do you think the opportunities will be in CEE as we emerge from the shadow of COVID-19?
The industrial, logistics and office sectors remain the preferred property type for CEE-based investors overall. Core and core-opportunities are still the main focus indicating a degree of caution in the market and a preference for income stability and security.
Warsaw is the most preferred city destination given the substantial number of multi-national companies operating in the city but it has seen a lot of new office stock hit the market recently. Of the other cities in the region Bucharest has begun to register some interest also. Overall, Poland still offers a slightly higher return when compared to western European countries and this will continue to attract international capital into the market.
8. What role / importance do you think ESG plays in investor decisions?
The growing awareness of the social and environmental impact of real estate means investors are increasingly focused on ESG disclosures, in line with government regulations and regimes. As new rules come about, there are legal requirements to adopt sustainability measures and achieve targets.
Assets that are sustainability accredited attract more investor interest because they meet these increasingly stringent regulations. For investors, this means less risk and more chance of attracting better corporate tenants with secure cashflows and better financing terms.
Cromwell has been long recognised for ESG and continuously improving its sustainability performance. Our aim is to provide continued financial security for our investors, while being ethical members of the communities in which we operate.
9. Why should an investor consider investing with Cromwell in CEE?
There are four reasons why I believe they should.
- We have a comprehensive range of services which means we can tailor our offering to meet individual investor needs.
- We have ‘boots on the ground’ and understand the local markets - this local insight mitigates risk and increases value for investors, particularly those not local to the region.
- While we are a sizeable business, we are also small enough to be flexible in adapting to change, to take on opportunities that are in the best interest for our investors and have resilience to sustain or improve the value of the properties we manage.
- Finally, we have been active within CEE for many years and our thoughtful approach to investing has resulted in a proven track record in effective fund and asset management.
We view each and every one of our investors as our partners. For us, nurturing the relationship with our investors is important and we want them to feel comfortable and secure investing with us.
10. What do you do to relax outside work? Pastimes / hobbies etc
One of my favourite pastimes is interior design. I enjoy arranging spaces and will often consult on renovation projects for friends and family. Otherwise, like most time poor professionals, I try to grab every spare moment I can to spend time with my family outdoors, on walks, short hikes, or cycling.