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Why have you decided to form a unified organisation?
The project is quite old. We had been discussing it for four or five years, but the real merger happened on 1 January 2011. First and foremost, we were thinking about our clients. If they wanted leasing, they came to us and if they wanted a loan, they went to the bank. It could be very confusing for our clients, so we decided to join leasing and loans and our clients could get all the services in one place. This was our main objective when forming the unified organisation.

What is the difference between leasing and loans?
They are fundamentally both similar products of financing. With leasing, the property rights remain with the leasing company . With a loan, the amount is insured with a mortgage. With leasing, the leasing company is somewhat more insured because it has the property rights. They can, therefore, offer better conditions to the clients. Otherwise, the products are very similar. They both go through the same procedures.

What about the interest rate? Is that smaller with leasing?
It isn't usually. The interest rates are more or less the same with our organisation. That was also the point of our merger: why the leasing and loaning segments were joined under one banner.
What do the investors prefer - leasing or loans?
I see no real differences. Most people prefer loans because they know the system better. But we do not see any great differences - that some would only want leasing and some only loans. It is difficult enough to get a long-term financing source, so the people are not really sensitive about the type of financing.

Erste Group Immorent deals exclusively with leasing for companies. How popular is financing real estate with leasing?
People do not really care if it is leasing or loans, as long as it is a long-term source of financing. There were many projects with short-term financing which did not go through and many of those investors are now taking an interest in this long-term source. As I said, there's no preference towards either leasing or loans. Banks tend to prefer leasing because they are more insured with the property rights than with a mortgage.

Can you tell me something about your current project Severna Vrata Ljubljane (the Northern City Gates of Ljubljana) or as you have named it City Tower Ljubljana?
Besides leasing, we also have our own projects and we are currently working on three. One of our main projects is the City Tower Ljubljana. This project is very close to the city centre, next to the railway and bus stations. It will contain about 15,000m2 of rentable office space. Its most special feature is the location: it is in the centre of Ljubljana, near the railway station. The skyscraper will have 23 above ground floors and five underground floors with parking spaces. All areas are intended to be leased. The ground floor and first floor will also have a public programme with cafeteria, bank, restaurant and some shops. The project was designed by the renowned architect, professor Boris Podrecca and his associate Sandi Pirš, who won the public tender for the best architectural solution. We applied for a building permit at the start of the year and we hope to have it shortly, so we can start building in the next few months, with the building process taking two years.

Our studies have shown that the biggest amount of office spaces is still in the centre and we sensed a lack of modern facilities for hire in the strict business centre of Ljubljana.

Why have you decided to build the City Tower Ljubljana in the centre of Ljubljana?
Our studies have shown that the biggest amount of office spaces is still in the centre and we sensed a lack of modern facilities for hire in the strict business centre of Ljubljana. We see this as a big opportunity for us to market the project and find enough people who will lease the spaces. After all the biggest pro of the building is modern offer within prime location.

How hard is it to find good projects?
It is certainly very difficult because there is not much construction work being done in Slovenia. It is very difficult to get a client who does not already have too many debts. This is the main problem. However, it also means that all our projects, which are approved and manage to overcome these obstacles, will go through.

What were your most complicated and most interesting projects in Slovenia?
Shopping centres were especially popular in the last few years and we financed a big part of shopping projects in Slovenia. Our biggest project was Europark in Maribor, which was also the first project we financed. Later we financed its two extensions. The total investment value was somewhere in the vicinity of EUR 100m. Recently, leasing to municipalities has become widely spread - a sort of public-private partnership.

How has EGI coped with the crisis?
Our policy is the same as it was before the crisis, there have been no great changes. We were very conservative in the past years, which proved to be a right decision, so all our clients pay regularly. We took no special measures for the crisis, but there are fewer projects in the last few years and fewer opportunities for financing. We do not have as much new business, which is understandable. There has thus far been no need for any other crisis measures.

How has the crisis influenced the leasing market in real estate?
The number of transactions with leasing has decreased dramatically in the last few years. It is questionable whether new projects that are being financed are actually new, or if they are existing projects that have been revamped. Leasing has definitely been affected by the crisis. This was especially evident in construction work and investments, which are practically non-existent. Leasing companies used to help construction companies, which have now come to a halt. But this year has been better in this regard. We have already sealed a few contracts and have a few other interesting things pending. I think that 2011 has been better than 2009 and 2010.

Do you think it is financially viable to invest more in shopping centres in Slovenia?
I remember people saying five years ago that there were too many shopping centres in Slovenia already. Shopping centres are still doing well in comparison to offices, which are 20 per cent empty. Shopping centres at good locations are still successful, so it is possible that more of them will be built in the future, especially in smaller towns, where there aren't any. I think there is definitely still room for shopping centres, but not to the same degree as before.

Shopping centres were especially popular in the last few years and we financed a big part of shopping projects in Slovenia.

Where do you see the possibilities of growth in the real estate market?
I see possibilities not so much in mass production, but on a smaller scale. In the past, apartment buildings, shopping centres and offices were built in large quantities. There is still possibility of growth, but it has to be done more prudently. There will always be good locations for, say, shopping centres and office buildings, or apartments. I think the trend will go towards quality and less towards quantity. There will always be a need for real estate, but we will have to think about the investments more.

What are your plans for Slovenia in the future?
Even though Slovenia is not one of the biggest markets compared to other CEE countries, we think that it is very well situated with profound market fundamentals, legal security and a stable political situation. With regards to our leasing activities we will continue to form public-private partnerships, develop our own projects and offer reliable services to our existing and potential partners.