Maxence Liagre, CEO of MPC Properties – No Limit to New Projects in Serbia, Direct Purchasing to Grow Stronger
(Photo: MPC Properties/Uroš Maksimović)
BEO Shopping Center in the Belgrade Municipality of Zvezdara has recently been awarded two prestigious International Property Awards, as the first building of its kind in Serbia to receive such high-profile international recognition. Is this actually a bad time to receive such an award, or exactly the opposite? How does the corona-crisis influence the work of the shopping centers that MPC Properties operates?
– First of all, I would say that it is never the wrong time to receive such an award. I would even say that it is exactly the right time for it, as the fact that these days are quite challenging for everybody, makes it refreshing to hear some good news. However, this is by no means a consequence of the timing, but represents the result of years of work and the permanent search by the company and by all its employees for the highest standards, regardless of the circumstances. Therefore, the fact that we were acclaimed by international peers is good, and it is a direct result of long-term work, strategy, effort and awareness within MPC Properties – says Liagre for eKapija.
eKapija: By building the BEO Center, MPC’s malls have crossed the Sava river. On the other hand, all of your office space seems to be concentrated in New Belgrade, whereas we are now witnessing the new trends, investments in important facilities in the old part of the city. Are you considering greenfield or brownfield projects in the historical center of Belgrade?
– New projects are much easier to develop in New Belgrade, given the size of the building plots and their availability. It also allows you to reach the highest standards - you start from a blank sheet of paper, the parameters of urban planning are much more favorable, and so on. But the fact that we built more in the new part of Belgrade is not the result of just a strategy. It is the result of seizing opportunities. We are equally open to developments in other locations.
Next month, we will launch the Tri Lista Duvana project. This building in the very center of Belgrade will have 8,000 m2 of office space, and it will be opened very soon, given that the facility has already been built. When it comes to downtown locations, it’s simply hard to find a better one: with easy access, attractive views and nice surroundings. This is the top location in downtown Belgrade. It will also have parking for about 40 cars, which I know is not that much, but when you compare it to other buildings downtown, it is quite a lot, yet there is also a large public garage nearby. What we especially like about this project is that, although we are downtown, we do not make many compromises. The TLD project will be a good combination of an urban charm and the best you can expect from a modern office space.
eKapija: Are you satisfied with the interest the companies have shown for the offices in the Ušće Tower Two skyscraper? What are the building’s main advantages, apart from the attractive location and the spectacular view?
– I would say that we are very satisfied with the demand, which is very high. Of course, we must take into consideration the actual market situation, knowing that there’s a pandemic going on and the demand is not as it otherwise should be. Still, we are surprised with how much interest clients are showing. Even though the companies are now more willing to postpone their decisions, because it is not easy, as many people work from home and now is probably not the ideal time to decide to move to new premises or expand existing ones, it still seems to me that our potential clients are coming to visit our new tower more and more. This is not only because of the office space itself, but also because people are looking for a unique space and very high standards, and Ušće Tower 2 is the place that gives them that standard. And it is not only because of the location and the view, but because of many other things, from design, functionality, being a “green building”, and overall because of the synergy of all of its functions. Consequently, we are not talking of Ušće Tower 2 as a single building, but the idea is to be a part of the community, to adopt a certain lifestyle. It is part of a larger "whole" which includes Usce Shopping Center, Tower 1, Tower 2, the Branko bridge, the Usce park, the river, the view, and also importantly a very quick access to the city center. It is therefore a very nice building with lots of positive aspects which provides one with full content.
Symbiosis: the new and the old tower (Photo: MPC Properties/Relja Ivanić)
eKapija: Would you say that the Serbian market is saturated when it comes to demand for the office space, as well as for the commercial space within the shopping centers? Many of us have been working from home for months, and many more people have been purchasing goods online. Do you think there’s a viable strategy to tackle those trends and challenges?
– There is definitely no saturation. The potential in Serbia is still here, but in order to realize that potential, you have to work on a differentiated offer, on added value, positioning, on every detail in order to stand out. I call this positive differentiation, opposite to the price competition. When looking for office space, price competition takes two minutes to evaluate, while the positive differentiation has no limits. As I have already said about the Tower 2, it is more than the location, the price - it is about the multitude of factors that make it a fine-tuned project. This logic is equally true for real estate as it is, for instance, for the story of iPhone: while there may be better and newer phones, this product is full of added value gained through right marketing, emotion etc.
Therefore, we are not facing competition, but standing out from it. It’s part of the company culture. We are always trying to achieve the best, so we do not set any limits. The budget is important, the timing is important, the return on investment as well, but that is not the absolute limit. Every single project of MPC, from Navigator 1, Navigator 2, Tower 1, Tower 2, Ušće, BEO - they are all different. Our basic rule is to continue to develop new projects to be in line with trends, to be ahead of other offers and to avoid the price competition.
eKapija: Do you see trends from the US, or from Western Europe, as relevant to the Serbian commercial real estate market, and to what extent?
– I prefer to speak about global trends, because they are spreading so fast now, not like before. What appears in the US almost immediately spreads further across the world. Also, the process of adopting new trends has accelerated in secondary markets, which was not the case before. If I had to choose one trend, I would say that we will see even more mixed-use projects on the market, because that is just pure logic. Now, there are much fewer boundaries between space for work, socializing, entertainment, families and so on. It is a global phenomenon and we are moving towards it very fast. Years ago, there were also some mixed-used facilities, but nowadays, for example, I will use all three components on the same day - sales, office, residential. Today, it is not easy to move from one plot to another plot, for instance in Belgrade. I think that as of now, there will be more free connection between urban spaces and more mixed-use projects arising.
eKapija: Speaking of the trends, do you expect LOFT apartments in Belgrade?
– I would like to see that, but 'expecting to' and 'wishing to' see something is not the same. I am a foreigner and personally, I think that would be very nice. While going around the city, I saw old industrial facilities, and I would like to see them transformed into LOFTs.
In order to develop LOFTs here, you need to have a vision first, you need also to have a space in your budget, because when you bring a new product on the market, you need to wait for it to be accepted by the users, and then to wait for the demand to increase.
eKapija: You’ve spent a long time working for the leading shopping center operator in the US. In your opinion, how far has the “Americanization” of Serbian working, buying, entertaining habits gone so far? Is it a driving force behind, say, the rise of the modern retailing concepts in our country?
– The modern concepts are already here. I don't believe so much in "Americanization", because there are different formats - the one you see in the Middle East, the French model, the Turkish model, the German model, they are all totally different. If you ask the Turkish people, they will tell you that the Grand Bazaar was the oldest shopping mall in the world.
There is a model - a shopping center, which is very easy to copy. I have full confidence in this model, I think it will continue to evolve, but above all with a local touch. From the outside it is a box, but then inside, it can be very different. Despite the existence of e-commerce, physical-contact retail has a bright future and will become stronger and stronger. Because, again, we return to the story of price competition as opposed to competition with emotions and enriched content - direct purchasing providing us with the latter.
Direct purchasing has a future, as does office work: Shopping Center Usce with two business towers (Photo: MPC Properties/Relja Ivanić)
eKapija: In Serbia, your company faces competition, too. Do you have plans for the new projects in Belgrade and in provincial Serbia? Could you tell us something about them?
– As developers, we are constantly chasing opportunities for new projects, we have no limits and are more driven by this search for business opportunities. So, why not Belgrade, but also elsewhere: the company has already explored the possibilities of such investments. Secondly, our facilities are constantly undergoing the process of improvements, and we are constantly working on our portfolio. And, as I said before, we are working to develop new formats, new business models, because we must always be one step ahead of the market, as well as ahead of the competition. You know, the development of a project is a long process, so when we start the project, it is then not open to public for at least two, maybe three years, hence we need to be one step ahead. You need to constantly ask yourself: OK, we know very well today`s market, but what will the market look like tomorrow?
eKapija: And what will the market be like?
– There will be physical contact, both in offices and in shopping centers. But we need to bring more life to it, we need to provoke more trust in people. It is easy to say that there is an increased danger of spreading infectious diseases in shopping centers, but this is not true at all - it is exactly the opposite. So, we need to communicate, we need to fight against those prejudices and stereotypes.
Also, we need to bring life back to the offices. It is not just a place where we will spend time for work, it is also where we will have lunch, in a restaurant that is part of the building, or within a mixed-use complex.
Shopping centers will also have to expand the range of services. In these places, we should be able to do all kinds of daily activities, such as going to the post office, for example, or running other errands.
The Sava is not the limit: the head of MPC Properties in an office on the 21st floor of Tower 2 (Photo: MPC Properties/Uroš Maksimović)
eKapija: Ušće Shopping Center has had the leading position among Belgrade’s establishments of its kind for more than a decade. Do you see it possibly endangered by the competing projects that have either already been built, or are now in the planning stage?
– The competition is important, because it helps you to constantly evaluate yourself, to stay aware. With or without new projects, we are constantly assessing and challenging our own leadership. That is very important, because otherwise it would be too late. We never wait for the competition to bring on new projects. If you look at Ušće Shopping Center, what it looked like when it opened 12 years ago, and what it looks like now, it is quite different in essence - by the choice of stores, by the type of customers. We need to stick to new expectations and new trends all the time. We work with people, and people change very quickly as now they have an easy access to the world via technology.
eKapija: Are you satisfied with BEO Centers results?
– Yes, we are very satisfied, because despite all these complex circumstances, the start was very good. We opened it in June, and it is never easy to open a shopping center before summer, because people are more focused on outside activities. The project has been very well accepted by the neighborhood and broader population, which is very important, because it is a facility built in the central city zone. When that is the case, the project can always disrupt the urban surroundings, but that was not the case here. In terms of the architecture, BEO Shopping Center completely fits into the environment. We wanted to make a humanely-proportioned shopping center. It is not very big and it represents a warm concept - it has lots of greenery, an open terrace, a square overlooking the crossroads: we did not just want to build a cube, but quite the opposite, to make people feel at home in it. And we very much succeeded, as the international awards only confirm.
eKapija: Are there any plans of a possible reconstruction, or upgrading of the Mercator Center in New Belgrade? It is in a favorable location, at the site of a planned metro station…
– Mercator is a successful center, but still far from reaching its top performance. For this reason I will say that today, it may be too soon to consider redeveloping it, because that center has not come to the end of its lifecycle. And yes, maybe it’s too soon for us today, but it will never be too late, because the place is so mature and so nice, that with every passing day it’s getting more and more attractive.
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