RESIDENTIAL MARKET SHOWING RESILIENCE IN THE FACE OF COVID-19 CRISIS

The pandemic has slowed down the residential market due to the restrictions imposed by the government. In April 2020, the number of real estate transactions was almost 34 percent lower than the one recorded in April 2019, and the situation was similar in May. However, apartment prices did not follow the same trend.

By Aurel Constantin

Ateneo Timisoara will include a supermarket, nine sports fields, a commercial centre and spaces for 120 shops

Ateneo Timisoara will include 1,300 apartments

Fewer than half of employees have returned to their offices since the end of the state of emergency, therefore the demand for homes where employees can set up an office is still high, and it will remain at high levels as 60 percent of employees believe that working remotely would be useful for at least 1-2 days a week, while 10 percent would like to work from home for 3-4 days a week in the coming period, according to a survey conducted by Colliers.

The search for a home that is better suited for remote working thus continues. 74 percent of respondents in a study by Storia.ro were planning to make a real estate transaction this year, with most of them being interested in selling or buying (63 percent). The study was conducted in May 2020, through an online questionnaire among Storia.ro visitors. The sample included 2,565 respondents.

Asked whether new information about the pandemic could change their plans, 56 percent of participants answered affirmatively, with the most affected properties being apartments (43 percent), houses (41 percent), followed by land (11 percent) and other types of properties (5 percent). Of those planning to buy or rent a home, 44 percent said their plans would not be affected in any way by any new information about COVID-19. However, 27 percent were thinking of choosing a cheaper property, while 14 percent were considering giving up buying and renting instead. Most Romanians surveyed believed that prices could go down in the next period, while a smaller share thought this was too difficult to estimate at this point.

“The period we are going through has led people to reconsider and reorganise several aspects of their lives, so we wanted to find out if and to what extent Romanians’ intentions, expectations, and decisions regarding real estate activity have changed. We found out that they were still interested in buying and renting properties and that most of their decisions had not been influenced by the pandemic, but some were thinking of postponing their decisions for three months to a year. A common point we saw among many of the respondents referred to the choice of working with a real estate agent. Among respondents who wanted to buy or rent, 59 percent were planning to use the services of an agent,” said Mihai Sava, Real Estate Business Manager at OLX Group.

CHANGES IN THE BUYING PROCESS Asked how the pandemic had affected their plans to buy, 30 percent of respondents said they were not looking to postpone their purchase. Only 8 percent were thinking of giving up the purchase, while 31 percent of respondents wanted to postpone it for a maximum of 3-6 months. Meanwhile, 8 percent of potential buyers even wanted to speed up the process.

When asked how they were planning to finance the upcoming real estate acquisition, 53 percent of Romanians said they would choose to take out a mortgage loan, while 35 percent said they already had the necessary amount. In the near future, 49 percent of Romanians who want to buy a home are planning to explore offers online, while 37 percent are willing to go to house viewings.

As for the factors that would make the decision easier when buying a property, 50 percent said it would be helpful to see the

property through a virtual tour, while 22 percent said they would like a video presentation.

In terms of the rental process, only 43 percent of Romanians said that the pandemic did not influence their decision in any way. At the same time, 22 percent of respondents wanted to speed up the rental process and 31 percent were thinking of postponing it – 20 percent for three months, 6 percent for six months, and 5 percent for up to a year.

In the near future, 40 percent of Romanians who are looking to rent are planning to explore online offers and another 40 percent are willing to go to house viewings, while 12 percent are ready to sign the final documents. The factors that would make their decision easier are similar to those mentioned by potential buyers – 52 percent said it would be useful to view the property through a virtual tour and 19 percent agreed that it would help to see the house through a video presentation.

SELLING OR RENTING A PROPERTY About 30 percent of those who wanted to sell a property had already published an online ad, 19 percent were renovating the property to increase its value and 14 percent were looking for an agent to take charge of the process. Owners who want to sell are planning to publish an online ad (54 percent), while another 31 percent will meet with potential buyers for house viewings. When asked what factors would make the sale easier, 35 percent of respondents said they would like to create a virtual tour while 23 percent believed it would be possible to sign a contract without leaving the house, using only digital means.

ONGOING PROJECTS New apartment buildings are still under construction in several cities. Even if the number of new homes will probably be lower compared to 2019, investors are still optimistic about the future. FRI-EL Buildings, part of Italian group FRI-EL Green Power, one of the largest renewable energy producers from Italy, will invest over EUR 80 million in developing Ateneo Timisoara, the biggest residential project under development in the western part of Romania, projected to have 1,300 apartments and a vast list of amenities and facilities. Ateneo Timisoara is located in the Torontal area, one of the most dynamic areas developing in the city, close to the Agronomy and Veterinary Medicine University and approximately one kilometer away from the future IKEA Timisoara store. The first phase of the project will include 153 apartments in three buildings, after an investment of approximately EUR 10 million, entirely from company equity. Construction works are being undertaken on the 5th floor of the first two buildings, set to be delivered in the spring of 2021, while the third building will be delivered by the end of next year.

“We started the development of Ateneo Timisoara at the end of 2019 and we haven’t slowed down over the last three months, and we have full confidence in the local residential market. The development of the entire Ateneo project will last for many years ahead and we are also looking at new investment opportunities,” stated Luca Cainelli, the CEO of FRI-EL Buildings Romania. Ateneo Timisoara will have the largest list of amenities

and facilities for residents of any residential complex in the west of the country.

UNCHANGED PRICES At the country level, housing prices went down by 1.7 percent in April and 1.4 percent

in May. The average price thus fell to EUR 1,348 per square meter at the beginning of June 2020. But this is the same average price per square meter as in the beginning of the year, which means that prices remain unchanged.

The situation will continue until the last quarter of the year, when a pickup in transactions is expected. That will be the moment when prices go either up or down, depending on confidence in the market and the development of the COVID-19 pandemic. If the health crisis continues, affecting the economy, housing prices may drop due to the lack of confidence and the decreasing number of transactions.

MISSION: A SAFE RETURN TO WORK

With companies making significant efforts to get back to normal after they’ve dealt with the impact of COVID-19, the next step for them is to set up a plan for their employees to return to the office. But as experts say and companies confirm, this return will be a gradual one, as the evolution of the coronavirus pandemic is still unpredictable. The main focus now for both landlords and their corporate clients is to ensure a safe working environment by implementing measures and clear protocols for how everything in the office operates while managing health and safety risks for employees. BR sat down with landlords and companies and found out how they were preparing for their employees’ return to the office.

The reopening of commercial spaces and the return to offices following the lifting of coronavirus-related restrictions involves a considerable administrative effort for companies, who must meet the criteria and implement the measures that will provide the green light to resuming business. Given the diversity of issues and the complexity of the current context generated by the pandemic, from epidemiological considerations and health and work safety to topics related to authorisations, approvals, and management liability, Reff & Associates - Deloitte Legal Romania and Waltmann A.B., Architecture and Consulting Design Office have launched an integrated solution for the assessment of office buildings and shopping centres and the preparation of a coherent set of measures and actions, verified from a technical, medical, and legal perspective, in order to guarantee a safe return of employees and customers inside these premises.

Reopening office buildings involves a rethinking of the daily experience and setting clear protocols for how everything in the office operates while managing health and safety risks for employees. How the return to work is managed will be critical for employee health and well-being but also for the confidence they have in their employers and landlords, according to the latest data from CBRE, the real estate consultancy market.

For example, Timpuri Noi Square has obtained the Safe Guard certification, following an audit by Bureau Veritas which certified the safety of the health and safety measures implemented during this period, supporting the tenants in the process of returning to the office, in a suitable environment that falls in line with current requirements. The Safe Guard label meets the demands of the new normality of our society, in terms of health, safety, and hygiene. The certification will cover common areas, receptions, and lobby lifts and will establish the sanitary standards applicable to all the buildings in Timpuri Noi Square, a 53,000-sqm commercial area consisting of the first 3 buildings delivered so far in the project.

“Timpuri Noi Square offers a healthy and welcoming indoor work environment and has all the favorable characteristics to safely return to the office. Technical details such as healthy air conditioning and a superior ventilation system, which offers 100 percent fresh air, combined with Vastint’s standard 3m floor heights, energy-saving

electrical equipment and LED lighting, contribute together with the additional hygiene measures implemented to a conducive environment for returning to the office, while ensuring social distancing. We are pioneers in this area with Bureau Veritas and at the same time we can assure our tenants that Timpuri Noi Square offices are a safe place to carry out their daily activities,” says Antoniu Panait, managing director at Vastint Romania.

According to Panait, from the very first moment the virus was detected in Romania, the company’s property managers started all the procedures required to maintain the safety of its projects, implementing a great number of measures to make everyone feel safe in the common spaces, lobbies, and elevators, in both Timpuri Noi Square and Business Garden Bucharest. The sanitization measures translated into additional cleaning and disinfection of all common areas, changing air filters, extra sanitizer dispensers, social distancing measures meant limiting access to no more than four people in one elevator, access through revolving doors limited to one person, placing sleeves on door handles and foils on door contact areas, manufactured with a special technology that does not allow the transfer of microparticles onto hands, adding transparent screens on reception desks to limit contact and implementing a new package collection point to a singular space that could be under strict surveillance – these are some of the measures Vastint took in order to become a safe place for its tenants. Panait also mentioned the signage measures the company has taken, such as applying limitation strips and information posters to maintain social distance, information regarding hand washing in every bathroom and in common areas, and stripes to limit the access to revolving doors and other entrances.

As for Immofinanz Romania, country manager Fulga Dinu says that the company has prepared its premises to provide the safest and best working conditions for all its partners. “As a responsible landlord, we have equipped all our buildings in order to ensure a healthy environment for our tenants and employees. To increase the supply of fresh air, we have overhauled the AHU systems, replaced or cleaned the filters, and supplemented the operating time by at least four hours. We have installed UV lamps and Plexiglas screens and we frequently disinfect and clean all areas and surfaces with a

high risk of transmitting the virus using alcohol-based solutions. We have also stopped running hand dryers in toilets,” Dinu says. In addition, the company has placed disinfectant mats and body temperature checking systems at the entrances of all its buildings. “We have applied self-disinfecting foils on every door handle, panic bar, and elevator button, we have installed signage to remind everyone of the importance of maintaining social distance, and suspended the transportation services,” adds the country manager of Immofinanz Romania.

According to Dinu, the properties owned by Immofinanz in Romania currently have an occupancy rate of 94.6 percent. “We have signed long-term partnerships with our tenants and do not expect significant variations in the occupancy rate. In general, recent months have accentuated the workforce mobility trend and office landlords will have to pay much more attention to their customers’ needs. The workplace is definitely evolving and more and more companies have started to recognise the fact that a thoughtful, progressive work environment can reflect brand value, while improving the health and productivity, innovativeness, and collaboration of a workforce. It is not so much about working spaces anymore, but about living spaces,” she concludes.

A THREE-STAGE REOPENING It is obvious that in a context dominated by uncertainty and caution, the return to work must be a gradual process, as experts say. “Our experience supporting clients in Asia suggests that reopening workplaces and commercial establishments is not so straightforward. From an occupier’s perspective, we encourage the reopening of workplaces to be considered in three stages: planning for the return, bringing employees back to work, and most importantly, ongoing management and workplace evolution,” says Tudor Ionescu, Head of Advisory & Transaction, Office, CBRE Romania.

In Bucharest, the modern office stock is estimated at 3.27 million sqm, a total space where about 330,000 – 400,000 employees are working, according to CBRE Research data. Most of this space, around 28 percent, is located in the north of Bucharest, in the vicinity of the Aurel Vlaicu and Pipera metro stations, 14 percent is in the Aviatorilor and Victoriei Square metro stations area, while another 13 percent in the centre-west area of Bucharest. In Timisoara, the modern office space stock is estimated at 250,000 sqm, while ClujNapoca’s is around 320,000 sqm.

A gradual return to work, with cleaning policies and procedures, will help employees feel safe, therefore a clean desk policy, whether that desk is assigned or unassigned, will be essential. In the shortterm, seating could be managed in a rotational manner so not only will remote work be supported and trusted by more organisations in the future, but it may be employed as a strategy leading to profound workplace transformation.

“We’re seeing people setting a high bar in terms of their own criteria for going back to work, which is normal in a health risk situation. Every aspect of office life will be scrutinised: getting there safely on public transportation, making it through the lobby, the desk routine, meeting setup, navigating once-mundane routines such as going to the restroom, getting coffee and lunch. A simple question like how to get a cup of coffee will imply a new routine. Personal discipline will be of the utmost importance,” added Tudor Ionescu. Both occupiers and landlords should give serious consideration to new levels of service, materials and activities needed to facilitate a return to the workplace. Examples of areas that may require advanced sourcing activities and increased funding include enhanced cleaning, introduction of new access protocols (e.g. temperature screening), increased supplies of products such as hand sanitizers and wipes, but also a reconfiguration of work environments and the associated technology and equipment, such as touchless technologies. Many tenants will choose to work in shifts and alternate flexible hours so the building may be fully operational for longer periods of time, meaning that the operational costs of buildings are expected to raise.

“Property managers have a crucial role to play in enhancing safety, creating a trustworthy but also pleasant work environment, while also keeping everything under control, such as resources, long term plans, and costs. At this stage the focus is on services like enhanced cleaning and building operations, as health and safety are top priorities both for tenants and landlords. In the medium term however, we expect the focus to be around new technologies, such as touchless entry, energy efficiency tools, automated maintenance software or off-site security solutions,” said Luiza Moraru, Head of

Property Management, CEE, CBRE. Technology can mitigate some concerns. Before COVID, tenants and landlords were beginning to track office usage with sensors that determined whether the space was being occupied efficiently. Post-COVID, that same technology can identify which heavily trafficked areas need deep cleaning, where density is too high, and which workstations are both free and sanitized.

According to CBRE, we will also witness a preference for buildings with “healthy” credentials related to indoor air quality and ventilation, as fresh air reduces the spread of airborne germs. In the longer term, health and wellness will play a more prominent role in informing building design. Currently, buildings are required to comply with a minimum 20 percent fresh air intake, while some choose to exceed this requirement by going up to 30 percent.

According to the Romania Flash Call organised in April by real estate consultancy company CBRE, the immediate impact of the COVID-19 pandemic on the real estate market will be felt during the second quarter of the year, while in the medium and long term the focus will be on health and safety measures as well as on technology.

“We expect operating hours of office buildings to be longer going forward. Many tenants will choose to work in shifts as well or have flexible hours. As such, building operational costs are expected to rise at a time when cost efficiencies are essential,” Moraru said. While the focus on operational costs will remain relevant for occupiers in the next couple of years, property managers will need to come up with creative solutions to incorporate the Health & Safety costs in their current budgets and to make the best use of this opportunity to create an emotional bond between occupiers and their workplace, according to CBRE. The consultancy firm is working on redefining common areas and their servicing by creating clear traffic corridors, specific health and safety measures such as UV filters, door handle covers, lifts buttons protections, HVAC servicing, and natural ventilation.As schools in Romania won’t reopen until September, we will continue to witness a dominance of remote and flexible working in the next few months, experts warn. “Trends like de-densifying, flexible hours, extended office hours, rearranging office space, and health and safety measures are on everyone’s agenda,” says Razvan Iorgu, managing director at CBRE Romania. Furthermore, according to Colliers International consultants, after the transformations companies are currently carrying out to ensure a safe return to the office, the office market will have to continue to redefine itself in the next period, to provide spaces that promote innovation and collaboration in the new context. The office will remain the central element for companies, given that the need for intense collaboration and social interaction in the professional sphere is difficult to meet in a virtual environment, but the effects of this period are expected to impact working habits and the setup of workspaces.

“The office of the future will focus on promoting social interaction and collaboration. We expect a new way of working, which will involve a mix between working from the office and from a distance, from home or other spaces. Employees will most likely prefer to carry out activities that involve focused work remotely and will go to the office for collaborative work – customer meetings, brainstorming sessions, project meetings, and so on. In this context, we believe that the office will go through a process of redefinition, and the emphasis will be on space quality and employee experience, promoting the identity and culture of the space,” said Daniela Popescu, Associate Director Office Advisory at Colliers International Romania.

A NEW WAY OF THINKING Florin Godean, Cluster Manager at Adecco Romania and Hungary, says that rethinking the dynamics of human capital investment has never been more relevant. “2020 started with a disruptive pandemic, forcing countries into

deep lockdowns amid efforts to save lives and prevent healthcare systems from collapsing. There are already indicators – at least in the short term – of an economic downturn and a rise in unemployment. However, we are still only learning about how deeply the pandemic will affect daily life. It’s a good time to look at empowering the workforce. It’s the right moment to rethink investments in workforce from the point of view of environment flexibility, work contracts, and lifelong learning programmes,” Godean says. A recent report published by Adecco Group, shows that we turn the conversation to investing in re-skilling with a call for an increase in flexibility, with a focus on ‘flexicurity’. This means improving flexibility with improved social security. In order for flexicurity to really work, it needs to happen in the context of a larger reshaping of existing social security and other systems.

WORK FROM HOME: A DOUBLE-EDGED SWORD According to the Working from Home study on 1,200 employees in Romania, the CEE and the SEE regions, conducted by CBRE Research, the things respondents miss most are communicating with colleagues, the clear separation between work and leisure time, and seeing others working around them.

The average share of people working from home is 3.9 percent of the total employment volume, meaning about 9 million employees, considering the Eurostat data for the countries belonging to the CEE & SEE regions that took part in the CBRE Research survey. The country with the largest share of people who are used to with working from home is Austria, with 9.9 percent from total employed individual, in contrast with countries such as Bulgaria and Romania, where there are rates of 0.5 percent and 0.8 percent respectively. “It is interesting to notice that even though Austria has the largest share of people who were familiarised with working from home before the COVID-19 situation, almost 80 percent of respondents were confronted with the lack of a work-life balance. The office space as we know it will be more clearly envisioned as a separator of work and personal life and the place to meet with colleagues and business partners, as these two aspects were the ones respondents missed the most. A greater prevalence of working from home policies does not translate into occupiers taking up less space,” explained Andreas Ridder, managing director for CEE at CBRE.

The same study says that in Romania, working from home

will not be an option for 33 percent of respondents versus the 38 percent who are intending to ask their companies to allow them to work from home at least once a week. According to official data, our country has the smallest rate of working from home, below 1 percent. “The option to work from home for more employees might challenge companies to reshape the workplace in order to make it more attractive and efficiently blending new concepts such as hotdesking and activity-based working, making pre-lockdown layout trends become history. We expect the demand for office reconfigurations to grow in the next 12 to 24 months considering the new legislation and the physical presence at the office,” said Iorgu of CBRE. As for the work from home approach, Mihaela Ionita, HR manager at Coca-Cola HBC Romania says that the company’s employees could already take one day per week to work from home even before the pandemic started. It is a benefit Coca-Cola HBC Romania offers to all employees whose job allows it. In addition, trends were already increasingly pointing to remote work. “The new generations are somehow promoting these ways of working and we had plans to tackle this need. The pandemic forced us to push ourselves to the point where all employees worked remotely for months. And the transition was made in one week. So, we know it is possible and we are still 100 percent functional,” she says.

In addition, the company conducted an internal survey in order to see how its employees perceived this matter after 3 months of working from home. The results were surprising: more than half of them would promote remote work as the way forward, and more than 80 percent want the flexibility of choosing their work location (2-3 days per week from home, or even one week from home and the next from the office). “Still, we know for sure that face to face interactions are still essential. They help us function better and build up team spirit and trust,” she concludes.

Asked whether work from home had the potential of becoming the main form of work in the future for companies, Godean of recruiting company Adecco warns: “To put it simply: no, I don’t think so. Not the main form of work at least. I think companies had an epiphany during these three months about what functions can be managed from home. Keeping in mind that costs can be saved with this solution, companies will certainly keep remote those activi

ties that proved productive while people were working from home. As for the extent to which this will happen, it will differ from one industry to another. It’s hard to imagine healthcare, retail, heavy industry or agriculture workers doing their job remotely,” he says. Keeping in mind that Twitter recently announced that all its staff would work from home forever, Godean says that Twitter, along with many other digital & IT giants (even local companies), already had the infrastructure in place to tackle such scenarios. Working remotely was included in the benefits package at such companies. Nowadays, depending on the pandemic’s development, companies must adapt accordingly and working from home will be a necessity. “Given the fact that companies that were 100 percent office-based switched to fully remote work in a matter of days proves that both employees and employers are ready to adopt it on a larger scale,” he says.

On similar lines, Panait of Vastint says that despite the fact that we cannot predict the evolution of this virus, we can only hope for the best and take all the possible measures to continue our activity. “It’s obvious that the number of employees and companies that have started working from the office again has increased in the last month since the state of alert has replaced the state of emergency, and this number will grow due to the fact that the majority of us can no longer work from home. The need to socialise and draw a line between our professional and personal lives is driving us back to the office, more than one study conducted during the pandemic period showed the importance of socialising and feeling a sense of belonging to the community,” says Panait.

WHAT ARE COMPANIES DOING? Many companies operating in Romania have decided to slowly resume their activity and the process of returning to the office is definitely a gradual one. For example, from mid-June until the beginning of September, employees from the BCR headquarters will spend one week at the office and two weeks at home, in a teleworking regime, while in the branches, two thirds of staff will be permanently present. “We also take from this experience the idea of capitalising on the good things we have been doing during this period. For example, using teleworking to a greater extent and making it part of our way of being or moving some HR processes online

(such as recruitment, onboarding or training). During this period, we continue to invest in learning and in the development of existing skills, and even more importantly in emerging skills, relevant to the new reality,” says Andreea Voinea, executive director within the BCR HR Division.

Asked about the moment when the lender’s entire staff would be able to return to the office, Voinea says that the company will adjust its plan based on the evolution of the pandemic. “In the meantime, only 33 percent of us will be present in the office at a time. We will be working in the office for 5 days every two weeks, until the end of summer. Starting in September, we will have weekly rotation. Each employee will work 1 week from the office and 1 week from home. Every decision on this matter will be balanced by the COVID-19 situation,” she says. She adds that during lockdown, 85 percent of BCR’s employees worked from home. Though the bank did use teleworking as a flexible working practice before the coronavirus outbreak, it was not used at a large scale. “Since flexibility is highly appreciated by our colleagues, it will probably become a way of living in the new normality. Therefore, we are surely considering keeping some of these good practices in the long run. As a matter of fact, we’ve just launched an internal survey that will help us understand how we can create a better workplace for the future,” Voinea says.

For Coca-Cola HBC Romania, choice and flexibility are at the core of its back-to-office strategy: each employee who has been working from home throughout the pandemic can choose whether to return to the office or not. The company still encourages working from home, and it offers the support needed for its employees to perform well at their job, regardless of the location they are doing it from. “The new rules for returning to work are designed in a way that protects workers’ health first. At Coca-Cola HBC, an entire team is working to re-design office spaces and create the safe environment in which we want our employees to work,” says Ionita of Coca-Cola HBC Romania.

According to Ionita, pandemic-proof offices are the sole option for returning to work, and a gradual increase in the number of employees coming back to the office will ensure business continuity. “All the actions we are implementing now are part of a long-term workplace planning, with hygiene and employee safety being at the

heart of our strategy. Additionally, we always have in mind that all plans we are making should be quickly adaptable, due to the unpredictable context,” says Ionita.

She adds that the workplace was a familiar, well-equipped and private place for employees to carry out their professional activities. Now it can be described as a physical separation between colleagues. “The atmosphere in our offices was always very animated, and we just love face to face interactions, whether we are on a Coke break or discussing our plans. The new working patterns are very different; they require physical distance and little interactions and we assume they will linger for some time,” Ionita notes.

However, she warns that it is very difficult to estimate a date when the company’s entire workforce will return to their offices. According to her, a gradual return and shifts are the concepts at the core of Coca-Cola HBC Romania’s back-to-office strategy. “A maximum of one third of our total number of employees simultaneously in the office and organising shifts, allowing employees to have at least 2 weeks working from home, are all part of our starter pack.”

WITH AN EYE ON RETAIL… The same rule applies for the retail sector, where property managers play a vital role going forward in taking the right steps to slowly rebuild consumer trust and give shopping centers back to the clients. Hence, managers have already implemented safety and social distancing measures while not infringing upon the feeling of freedom and excitement, and this will redefine all areas of the malls. “The way we do marketing will be fundamentally changed as we will redefine the customer journey, both physical and digital. The level of technology in shopping centres has to increase with a wide range of tools available. Operations will change with the integration of technology and new health & safety standards,” says Moraru. She adds that those malls that communicated even during the lockdown and adapted their communication to the new normal gained more trust from the public. “However, the consumption habits built over the last months don’t have to be ignored or minimised. Malls have to deliver messages where the consumer is now used to get them, meaning online and on social media,” Moraru argues. On similar lines, Razvan Marincoi, marketing director for retail & office at CBRE Romania, says that the performance of social

media messaging is based on three indicators: relevance, features, and empathy. “The understanding of the level of empathy the user perceives makes the difference, especially in highly emotional contexts,” he says.

So far, total investments made by large shopping centres in all equipment, supplies, and staff needed to implement the measures meant to prevent the spread of coronavirus exceeded EUR 500,000, according to Colliers International consultants. “For the safety of shoppers, malls and shopping centres have taken all the necessary safety measures during this period and have established clear procedures for disinfecting common areas and ensuring social distancing, and many retailers have also come up with additional measures in their own spaces,” says Simina Niculita, Partner & Head of Retail Agency at Colliers International.

Among the measures taken by large shopping centres are gates or special rooms to measure visitors’ body temperature or systems that monitor the total number of visitors inside the centre at any given time, so as to limit access to others when the maximum limit set by the authorities is reached. At the same time, shopping centres are ready to constantly disinfect common areas and escalators with specialised substances or UV lamps and provide visitors dispensers with disinfectants, and as an additional measure opt for the introduction of fresh air from outside instead of relying on previous procedures for recirculating air inside the centre.

For example, Mega Mall became the first shopping centre in Romania to obtain the COVID-19 Certificate of Conformity. This means that Mega Mall meets all the international sanitary standards and is able to provide a safe shopping experience to its customers. The certificate is issued by the independent Swedish company Safe Shopping Centres (SSC) specialised in the accreditation of the safety of shopping centres worldwide. The measures taken by Mega Mall in order to prevent the spread of the coronavirus focus on two major pillars: ensuring a minimum of 2 meters social distancing and constantly disinfecting the commercial centre. Since the mall reopened on June 15, the safety measures taken to prevent the spread of coronavirus have been promoted on LED displays within the mall.

The Vivo! centers in Pitesti, Constanta, Cluj-Napoca and Baia Mare, developed by Immofinanz Romania, are also following the

measures recommended by local and national authorities. Cleaning staff is mobilised at all times and works to sanitise and disinfect all common spaces (halls, toilets, elevators, locks, handles). The company has started general disinfection actions by nebulization on common spaces, through the ventilation & acclimatization system, and has disabled air recirculation function in the centre to ensure 100 percent fresh air. Communicating safe shopping measures and instructions for proper hand washing and sanitization throughout the visitors’ journey in audio, digital and print media, installing dispensers with hand sanitizer solutions at entrances and in the toilet and restaurant areas, establishing one-way traffic paths to ensure the two-metre distance between visitors are some of the measures that Immofinanz Romania has taken for its shopping malls.

“At the same time, we are working closely with shops and restaurants to ensure safe operation. Management teams are on-site daily to respond promptly to requests from tenants and authorities. We are connected with our visitors on our social media, where they see information about the additional measures they must take in order to limit and prevent coronavirus contamination. We are also in permanent contact with authorities to promptly implement any further measures and recommendations,” Dinu explains.

….AND LOGISTICS As for warehouses, the CBRE Romania Flash Call found that stocking and transport (midstream companies) have been privileged during the COVID-19 crisis. “Imagine warehouses being like Netflix: production is rather limited, cinemas are closed, but we are all watching Netflix. Ecommerce has filled up the void generated by traditional retail being closed through logistics, thus providing a strong foundation for the long-term evolution of the sector. In principle, the perspectives for this sector are optimistic going further, yet distinctions between the future of each industry need to be made, as the future will not be the same for everyone,” Iorgu stated.

According to Sinziana Pardhan, managing director for Romania at P3 Logistic Parks, the past months have been exceptional. “Nevertheless, in our market segment, adaptability paves the road to business continuity and sustainable development. From the onset of the coronavirus, the health and safety of our employees and business partners were, and will continue to be, our top priority.

In this context, we have worked on developing and implementing several policies and measures. For our employees, we have adopted remote work and travel restrictions as primary measures, allowing only necessary physical interaction, while of course following all social distancing recommendations and very stringent hygiene rules,” she says. The company also ensured that the working flow in P3 Bucharest A1 park could continue smoothly and, in this context, together with the facility management provider, the company has tailored a complex scheme to secure and guarantee the uninterrupted provision of maintenance services and the good functioning of its warehouses. As for the level of investment made to ensure a safe environment for both its employees and its partners, Pardhan says that it is very difficult to measure the actual financial impact of these measures as there are a lot of indirect costs involved. “In this particular unprecedented situation, the short-term cost impact was not our focus. What was really important for us, as a private entity and as humans, was to make sure that the measures and policies we adopted were protecting our team, our tenants, as well as their employees,” says Pardhan. Asked about how the pandemic had influenced the volume of activity of P3 Logistic Parks, Pardhan says that the global outbreak of the novel coronavirus had created significant challenges for the business environment. Nonetheless, the impact of the pandemic was experienced differently by each business, depending on the industry sector. “When talking about the real estate market, in a short and medium term, the industrial-logistics segment is the least impacted, as most of the businesses that have and continue to thrive during this period are e-commerce operations, which rely heavily on good quality warehousing space,” she says. With the coronavirus triggering lockdowns and mandatory work-from-home policies worldwide, generated-commerce adoption is now seeing accelerated growth. “On the leasing side, we have observed tenants generally acting more cautiously during this period. Some of the expansion or relocation plans that were envisioned before the pandemic are now put on hold. Though not at the same levels as 4 months ago, there is still healthy demand from prospective tenants and we remain optimistic for the second part of the year,” Pardhan concludes.

Movers and shakers in Romania’s VC market: Lessons from the first half of 2020

It is difficult to know how long the economic downturn caused by the coronavirus will last, but the amount of venture capital funding for Romanian tech startups during the first four months of pandemics looks decent.

By Claudiu Vrinceanu

In the tech area, companies seem to be less affected by the current situation

More than 10 tech startups raised a total of EUR 4.5 million in March - June 2020, a level comparable to pre-pandemic times, but negotiations for almost all the investments had their roots before March 2020. Is the current situation quite as gloomy as previous crises were for Romanian tech fundraising? To have a realistic assessment of the venture capital landscape, we should look to the evolution of deals in the next four months.

Who are the movers and shakers of VC funds in pandemic times? For many companies with growth potential, the pandemic can be “an academy” to reinvent themselves, and the high-potential business verticals are now healthtech, cybersecurity, edu-tech, and agritech, according to VC fund managers in Romania. Since March, venture capital fund managers have been close to the startups in which they have invested and have sought solutions. In a tight market situation, profitability becomes more critical when evaluating current portfolios as well as potential investments. Obviously, some solutions have been related to cost cutting, others have been attempts to take care of companies, founders, and people in companies, and other solutions have been related to opportunities that may arise.

In the tech area, companies seem to be less affected by the current situation, but it is very clear that we will see a resettlement of the market. Investment fund managers predict that in the near future – but not the very near future – we will see founders trying to tell their stories in a different way, addressing risks that may arise. It is important for these risks not to be hidden, but communicated to others and understood.

Besides healthtech, education, and RPA, cybersecurity is one field with major VC investments closed in 2020. “In the last few years, the complexity of cybersecurity threats has been on the rise. All analyses point to it increasing even more in the future. Clients of all sizes, small and medium enterprises especially, need solutions that are both effective and simple to use, manage, and understand. The complexity of the problem needs to be balanced by the simplicity of the solution,” said Cristian Munteanu, Managing Partner at Early Game Ventures.

Such small businesses use managed service providers (MSPs) for all their digital needs, from Internet access to cloud storage, processing, and hosting.

One example is CODA Intelligence, Early Game Ventures’s latest investment, which adds value to small companies that have security or compliance issues by proactively signaling risks and threats. This approach simplifies the management of computer vulnerabilities in a process that becomes easy to understand and may be prioritised by business people without a technical background.

Despite the crisis generated by the pandemic, investment funds focused on Romanian tech want to continue what they started to do a few years ago: investments in deeptech companies, mainly companies based on services and products in the enterprise and B2B area, with great potential for international expansion. Of course, new verticals have now appeared as opportunities generated by the current situation – we have an explosion in e-commerce and investors have started to look to this area as well. Perhaps these verticals will be the next movers and shakers of VC funds.