Chances are that you've passed by the curved glass facade of Jungmannova Plaza, located in Františkánská zahrada near Václavské náměstí, many times. The building was named the best office project of 2004 by the Construction and Investment Journal. You may have also heard about the Brno Business Park, the large-scale office development set to open at the end of this year in Brno, Moravia. The name tying these two projects together is Lordship Estates — and if the company's rapidly growing list of project is any indication, it is a name that will come up often. Founded in Great Britain in 1989, Lordship expanded to Central Europe in 1991, establishing its main office in Prague. In 1997, Lordship opened a second office in Brno. Some of its most recent projects include the Pankrác House, Domy Heroldovy sady, Petrov Business Centre and the Centre Plaza in Bratislava, Slovakia. On a recent morning in Lordship's bright, airy offices near Václavské náměstí, company director Martin Pilka talked to The Prague Post about his company's changing role in the Czech real estate market.

The Prague Post: How is Lordship Estates different from its competitors?

Martin Pilka: Every competitor is different and every company excels in different areas. We always try to do projects that are in good locations, projects that are somehow exceptional. Such projects as a rule tend to acquire high value, which means that they sell quite well. We wouldn't go into a project if we're not excited about it from the very beginning. What does set us apart from some companies is the fact that we're relatively small [about 30 employees], and we have a lot of freedom when it comes to deciding what projects we want to work on and where. There is no big investment fund behind us, forcing us to invest, buy and build at any cost. I think this places us in a slightly different position than many of our competitors, and it really lets us choose the cream of the crop when it comes to projects.

TPP: How has the role of your company in the Czech real estate market changed over the 14 years you've been here?

MP: It's changed quite a lot. When we started out, we were a very small company. Initially, we worked on projects of about 1,000 square meters. We didn't have that much capital behind us then. We were also being cautious, testing the market. Around 1997 we began working on bigger projects, and from there we eventually worked our way to the projects we are doing today, such as Jungmannova Plaza, which totals 16,500 square meters, and Pankrác House, which totals 32,000 square meters. Jungmannova Plaza was our first really big project. Our current project in Bratislava [Centre Plaza] has a total space of 125,000 square meters.

TPP: And how has the Czech real estate market evolved over the last decade?

MP: It's slowly becoming saturated; the market is beginning to fill up. There are more and more [development] companies. But these companies are, overall, of a much higher quality than before. It's a weeding-out process. The companies that become successful are the ones that have a serious, professional approach to their clients, and aren't only after getting the maximum profit out of their projects.

TPP: In response to that, how has Lordship's strategy evolved?

MP: Now we're starting to look more for projects outside of Prague. This isn't so much because of market saturation in Prague — it has more to do with the demands of our clients. No one used to be interested in locations in regional cities, but this is changing. Underdeveloped areas are suddenly facing a need for office and retail space. We always try to be a step ahead of where the demand is heading.

TPP: Do you think that the demand for office space will continue to grow in spite of the current saturation?

MP: I think it will. Of course, the growth won't be as dramatic as five years ago in Prague, when there were a lot of companies coming in from abroad and we experienced an office boom. There will be an increased demand for good quality offices, as established companies start leaving the offices where they started out and look for something better. More companies will also seek to set up their offices in regional cities, where the rents are lower, the work force abundant and the operational costs aren't quite as high.

TPP: You also have an office in Brno, and you're currently working on the Brno Business Park there, which is a huge project. How would you compare the Brno real estate market to the one in Prague?

MP: There is a definite lag when it comes to Brno's [real estate] market. Five years ago there was only one building in Brno that had good quality office space, and it was completely leased out. Today there are three or four projects that offer a good number of A-level offices. In the next two years, there should be an additional 160,000 square meters of office space, which is a decent amount. And the demand continues to be there. We are currently working on leasing out about 16,000 square meters of offices as part of the first phase of our project there [Brno Business Park]. In theory, if we had to satisfy all of our potential clients, there wouldn't be enough space.

TPP: How do you handle this constant traveling back and forth between Prague and Brno?

MP: I love driving, but I must say that it's becoming exhausting. Now I drive mostly at night, because during the day the highway traffic is unbearable. But I like the work I'm doing. Every project is completely unique, you get to be creative and work with lots of other people.

TPP: What has been your favorite project so far?

MP: The Brno Business Park is my baby. I've been working on it since 1998. I've been there from the beginning, and I've experienced all the labor pains. A person always puts a piece of himself into a big project like this. That's why we try to do projects that meet high critera of quality and aren't just about the volume of leasable space.

TPP: The most difficult project?

MP: With every project there are different challenges to overcome. Jungmannova Plaza was a challenge because it's in the city center and because there were demolitions involved. It took about four years before we could finally realize the project. The preparations also took a very long time. Pankrác House was difficult because the entire project stands above the metro station Pražského povstání. It was essential that the construction wouldn't interfere in any way with the subway system. In the end it all came together very nicely. Currently, the most challenging project is probably the one in Bratislava [Centre Plaza], because it's the biggest project of its kind there. The bigger the project, the bigger the challenges.

TPP: How would you compare the Czech real estate market to that of surrounding Central European countries?

MP: In Poland and Hungary, the real estate market trends are similar to the ones here. But in Hungary there are fewer chain stores and fewer supermarkets outside the bigger cities. Here you can visit a town with a population of around 30,000, and you'll find a Tesco, Hypernova, Interspar, Kaufland — all the major chains. You wouldn't find that in Hungary. I wouldn't say that the Czech retail real estate market is saturated, but it's definitely more compact, more stable and more mature. I think that it's starting to resemble the real estate markets in Western Europe more and more.

TPP: Why did Lordship choose to stay away from the residential market?

MP: The reasons are solely practical. It's much more work to negotiate with all the different clients. You only start to get some returns for your investment after selling the last few apartments. We did a residential project a while back in Heroldovy Sady in Prague 10, and it turned out quite well. But it took a long time, and there were 20 more people working on it than on most of the projects that we work on now. It's not that we wouldn't like to do residential projects. What we wouldn't do is massive residential complexes with 400 apartments. If we were to do a residential project, we'd want to make sure that it's in a truly exceptional location.

TPP: What are the ingredients of a successful project?

MP: It's always about the location. But, of course, experience, good financial backing and knowing how to talk to the clients is also important. It helps to have a number of successfully completed projects behind you. The clients, the city officials and the banks can always tell if you're just a beginner. It helps when people know that your company is reliable and able to finish projects on time.

TPP: In what position would you like to see your company 10 years from now?

MP: It's always difficult to predict how things will go in the real estate market. But of course, we do have a number of future plans. We would like to expand further. We're considering doing other things besides just building and development. Already now we're slowly making the transition from being a developer to being an investor, and we would like to continue in this direction in the future.