Home / Business and Politics / Danko Deban, CEO of Ingra: Real estate prices will rise more slowly and then stagnate

Danko Deban, CEO of Ingra: Real estate prices will rise more slowly and then stagnate

Danko Deban
Danko Deban / Image by: foto Rene Karaman

Many court proceedings, demanding restructuring, and pre-bankruptcy proceedings are now behind the former construction giant Ingra, a company that spent nine long years trying to stabilize its operations and settle the monetary claims of creditors. This was the impetus for a conversation with CEO Danko Deban, whom we asked about the company’s plans and in which segment it will seek its place in the sun, and we also commented on the state of the Croatian real estate market and touched on the topic of green hydrogen.

Recently, Ingra exited the pre-bankruptcy process. What has been done to conclude that process?

– Over the last three years, as part of a comprehensive restructuring, financial, personnel, and operational, we have done a tremendous amount of work and transactions. All claims filed in the pre-bankruptcy settlement process have been settled. Certainly, the most important process in financial restructuring was the buyback of bonds from the company Lanište. When we started this process, we set an internal goal to buy back 50 percent of the bond issuance, and in the end, we managed to achieve a significantly higher result, even 85 percent of the issuance. The profit from that transaction amounted to 116 million kuna, and the successful management of that process gave us a boost, allowing us to successfully conclude a large number of settlements and realize all further transactions. An important transaction was also the settlement of obligations from the PIK instrument defined in the pre-bankruptcy settlement, which was secured by real estate, and we settled it by selling real estate or buying receivables. Over the past three years, we have also concluded many settlements, both judicial and extrajudicial, which settled a large part of the obligations.

What court processes were involved?

– Ingra had many court processes, some of which date back to the 1980s and 1990s. A large part of those disputes has finally been resolved recently, mostly through settlements. This way, we eliminated most of the risks associated with conducting such processes. Financial and time resources that the company previously had to engage have also been significantly reduced. We will also try to resolve all future processes that may arise through settlements, except when it comes to malicious proceedings against which we will uncompromisingly defend the company’s interests.

What else is important that has been done in the restructuring process?

– Certainly, personnel and operational restructuring was important. We reduced the number of employees and personnel costs by as much as forty percent. A large number of people left the company due to retirement. Everyone who left us did so with very good social packages. We also shut down many affiliated companies, of which we had more than twenty three years ago; today there are only three. As a result, we now operate in a simplified organizational structure; we have the parent company Ingra d.d., then Ingra real estate and Lanište, and for the past two weeks, an affiliated company for renewable energy projects.

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Antonija Knežević, Danko Deban

photo Rene Karaman

When we talk about affordable housing in a country, how do you comment on the fact that there are 54 thousand empty apartments in Zagreb and a significant rise in real estate prices recently?

– People are clearly still investing their capital in apartments, which then remain empty. The mentioned rise in square meter prices that we have witnessed in recent years is certainly not sustainable in the long term, but it is logical due to the prices of materials, labor, labor shortages, the transition to the euro, APN subsidies, high demand for real estate, high inflation… Such growth is not unusual for developing markets like our real estate market. When and if our market develops, it will be easier to predict trends.

How do you then interpret that prices have not fallen despite the decline in transactions, while, for example, the German market has recorded a 10 percent drop? Does it not seem that the Croatian market reacts slowly?

– The Croatian market always lags behind and reacts slowly in anything when compared to some organized markets. However, this is indeed a specific situation because the construction sector has a lot of work on various infrastructure projects and renovations, and a lot of money is coming from the EU. Nevertheless, real estate prices will rise more slowly and then stagnate, but quality projects in good locations will undoubtedly continue to sell easily. A price drop may be expected in some less attractive locations, but in a situation where the economy is growing, a general decline in real estate prices will not happen easily.

Read the entire interview in the new issue of the printed and digital edition of Lider.

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