BREC Talks

Among the main objectives for 2022, Ștefan Vayna, CEO, MASTERBUILD – General Contractor & Property Developer, estimates an increase of at least 30% in the turnover of the company, reaching around 25 million euros. More about his plans and the main trends shaping for 2022, find out in the interview below:

How would you describe 2021 for the business of your company? What were the main achievements of your company last year?

The last 30 years have taught us that “normal” means constant change and fewer moments of stability. Last year, the business environment showed maturity through a very active dynamic.

The events we attended in 2021 helped us to strengthen the team. The fact that MASTERBUILD  has expertise in crisis management, gained in the 2009-2011 period, gave us the confidence to move forward. Since September 2021, we have resumed the activity of external development. We also build in other parts of the world – including military bases in Africa or various other targets in Europe. And recently I was able to resume this activity.

Which are your main objectives for 2022?

In 2022, we expect an increase of at least 30% in turnover, so that we will reach around the figure of 25 million euros, with a profit margin between 8-10%. We will reinvest about 70% of the profit.

How do you see the main trends shaping for 2022?

If, until last year, there was a lack of predictability in government policies, now it applies to construction and prices and delivery times. Probably a strong shock will come from somewhere, but if we have a vision and go towards it, any new shock will be just an event from which we will have something to learn from and it will certainly make us stronger.

MASTERBUILD – General Contractor & Developer is one of the most dynamic construction & logistics and industrial development companies in Romania.

Founded in the early 2000s in Bucharest, the company develops general contracting activities, specialized enterprise (core & shell constructions), sale of construction materials and equipment, as well real estate development.

The company operates throughout Romania, in various cities and development regions, as well as on international markets, in Europe and on other continents.

MASTERBUILD builds (in whole or in part) industrial and logistics halls projects, logistics parks, retail stores, production facilities. The company also builds projects in the field of special constructions, such as military bases, special research centers, embassy

Among the main trends shaping 2022, Laimonas Luizys, Managing Director at Peikko Romania, estimates that competition will remain strong in the construction industry. How Peikko further sees the market, find out from the interview below.

How would you describe 2021 for your company’s business? What were the main achievements of your company last year?

2021 was a year of a roller coaster for all construction industry and it didn’t bypass Peikko Romania as well. Significant increases in raw material prices had a major impact, moreover freight availability and cost were challenging us, energy prices sky-rocketed at the end of the year. Peikko Romania grew strong in 2021, but it could have been stronger without the mentioned turbulence. On the other hand, it was a great test for sustainability of our business and I can state that due to dedicated team efforts, we passed it. By the end of the year we concluded investment of 1 million euros into increase of production capacity and start of a new production line of components for precast concrete products. Our total turnover grew by 50% and local sales in Romania by 43%.

Which are your main objectives for 2022?

Our main focus is customer satisfaction, we will continue delivering top quality products in shortest possible lead time. To support our main goal, we will focus on the improvement of production process to be capable to cope with peak demand expected in the middle of the year. This year we also plan further strong growth of turnover as last year’s investments become fully functional and already contribute to production output.

How do you see the main trends shaping 2022? 

The start of this year looks to be more stable than the previous, however last couple of years proved how fast a situation can change based of various unpredictable factors. For sure, competition will remain strong in construction industry for many aspects: competition in sales, human resources, branding. Upside is that now the industry players are stronger, better prepared, more flexible and ready to adapt in short term. All in all, I estimate a further growth of construction industry, raw material prices will remain at a high level, but should not go significantly up anymore, just usual short-term ups and downs. The other aspect for increasing prices in the end user market might be a result of disbalance between demand and availability. To conclude – it will be a good year to come.

Peikko Romania was established in 2018 and is a part of Peikko Group Corporation. Peikko Group Corporation is a leading global supplier of slim floor structures, wind energy applications and connection technology for precast and cast-in-situ. Peikko has sales offices in over 30 countries in Asia-Pacific, Europe, Africa, the Middle East and North America, with manufacturing operations in 11 countries. Peikko is a family-owned and managed company that employs over 1,800 professionals. Peikko was founded in 1965 and is headquartered in Lahti, Finland.

In 2022, Dragos Bonea aims to transform his business, Delta Studio from a materials supplier into a turnkey interior supplier. How will he do this?  Also, his plans include the start of two of his own real estate projects with a total value of EUR 10 million.

How would you describe 2021 for the business of your company? What were the main achievements of your company last year? 

Delta Studio ended 2021 with a revenue increase of approximately 12% and a profit increase of approximately 15%. The company focused on innovation, process optimization and strengthening smart luxury positioning. We have reached the targets established early 2021.

Among them:

• The development of “Vernis Sunrise Villas” residential project, consisting of a set of 25 premium houses, built in a “gated community” system, in Corbeanca, IF. The investment value was about EUR 4.5 mil. + VAT. The deadline for their completion is June 2022.
• We laid the foundations of DSD – Delta Studio Design, our own office of architecture & interior design. Through this, we address both B2C and B2B end – customers (developers, constructors). The results were fast and therefore we scaled this business direction by expanding the number of fellow architects, from 6 to 20. The projects carried out by DSD – Delta Studio Design was awarded in 2021 at the Property Awards (UK) and in within the Architecture Annual.
• We started a DSI partnership program – Delta Studio Inside, through which Delta Studio provides the entire interior concept, from concept to project, materials and work execution, with active involvement in promoting and selling the project, including through co-branding. Some examples of CIO projects that started in 2021: ArtCity Residential Ensemble, in partnership with Bog’Art, CEC Bank, Level 2, Core-New Times, etc.

Which are your main objectives for 2022?

In 2022 we aim to transform our business from a “materials supplier” to a “turnkey interior supplier”.

In this regard, we focus on expanding and consolidating the architecture office, DSD.

• We are working on the development of our own team, which will ensure the execution of the works, according to the standard imposed by our company.
• We will start our own 2 real estate projects, with a total value of EUR 10 million. For the first time, I have already bought the land.
• We are starting the preparations for the construction of the new logistics center in Giurgiu County. The purchased land has 25,000 m². The estimated investment is about EUR 10 mil. and will extend over 2022 – 2023.
• We want to continue the digitization activity and for this step, we estimate an investment of EUR 500.000 in 2022.
• For 2022 we have budgeted a 25% increase in turnover as compared to 2021.

How do you see the main trends shaping for 2022? 

We are optimistic. The segment of our company (smart luxury) is correlated with the residential market, which is also growing for 2022. The preferential 5% TVA rate for residential properties up to EUR 140,000 euros from January 1 boosted the demand on this segment.

In addition, our ability to integrate 100% interior design, so that we take responsibility for the entire project, is a strong differentiator, appreciated by most customers in this segment.

…

Delta Studio appeared on the Romanian market at a time when the terms “interior architecture” or “interior design” were vague and inaccessible and the offer of interior finishes was extremely limited.
Dragoș Bonea is the founder and general manager of Delta Studio, a business that initially started in 1996, by selling ceramic tiles for interior design.

The company led by Dragoș Bonea has evolved and adapted permanently over time. Delta Studio currently operates a community-supported professional solutions platform in the fields of architecture, interior design and construction. The company sells a varied portfolio of products, dedicated to interior architecture, through its own network of stores, available in the main cities of the country, but also online on deltastudio.ro.

(By Alexandra Smedoiu, Partner and Real Estate Industry Leader, Deloitte Romania, and Irina Dimitriu, Partner, Reff & Associates | Deloitte Legal, Head of the real estate practice)

The EU aims to be climate-neutral by 2050, a goal that also involves decarbonising buildings as to diminish their extensive direct and indirect impact on the environment. During the construction, occupancy, renovation, repurposing and demolition, buildings use energy, water and raw materials, generate waste and potentially harmful atmospheric emissions. These factors have prompted the creation of green building standards, certifications and rating systems aimed at mitigating the impact of newly developed constructions on the environment through sustainable design.

Considering the need for increased transparency in informing shareholders and investors on the companies’ impact on people and environment, the European Commission recently adopted the Sustainable Finance Package to help the redirection of private capital towards green activities. The package includes a new Corporate Sustainability Reporting Directive (CSRD), which would revise the existing reporting rules introduced for public-interest entities by the Non-Financial Reporting Directive (NFRD). The CSRD proposal extends the scope of the NFRD to all large companies and listed companies.

Basically, we expect that a wider range of companies (all large companies, either listed or not, as well as SMEs) will become publicly accountable for their impact on people and the environment.

At the request of EC, the European Banking Authority (EBA) published a set of KPIs for the disclosure by credit institutions and by investment firms of information on how and to what extent their activities qualify as environmentally sustainable. Moreover, the EBA underlines the importance of the green asset ratio as a key means to understand how institutions finance sustainable activities. These actions could result in lower funding costs for projects compatible with EU environmental objectives.

Therefore, EBA took a step further as compared to the EC in the sense that the companies’ accountability for their impact is no longer sufficient, but the development of green projects is financially encouraged.

At the same time, the EBRD new Green Economy Transition (GET) approach for 2021-2025 includes climate action to reduce energy and carbon intensity and sets a new target to reach a green finance ratio of more than 50% by 2025. In real estate, the bank’s priorities include the management and development of green and sustainable buildings.

All principles and public statements supporting the green projects may sound rather theoretical for other industries, but for real estate in particular, things are changing even faster than anticipated. As such, starting this year, all new buildings must meet the NZEB standard.

What is NZEB?

Buildings consume 40% of the total energy and emit 36% of the greenhouse gas in Europe, therefore representing a high potential for energy savings. In the recast Energy Performance of Buildings Directive (2010/31/EU), the term Nearly Zero-Energy Building (NZEB) was defined as a “building that has a very high energy performance.” The directive states that, as of January 2019 for public buildings and January 2021 for others, all newly built construction should reach the NZEB target in all member states, including Romania.

Within this perspective, bank financing will surely be oriented to the projects eligible for ensuring the transition to a sustainable economy. There are already banks in Romanian that have announced that, if they had to choose between two projects, one with a green component and another without one, the first one would have priority in financing, even under less favorable conditions for the bank.

So real estate developers will likely follow these trends in order to comply with the new sustainability standards, but to also facilitate access to the best financing for their projects. As a source of funding, they can also consider European funds granted through the Next Generation EU (National Recovery and Resilience Plan in Romania – PNRR), given that the plan is strongly linked to the need to fight climate change with the objective of reducing greenhouse gas emissions.

The manner in which this mindset change will reshape the cities of Romania is yet to be seen. The next question is whether Bucharest will champion this new wave or other major cities (such as Cluj-Napoca, Timisoara or Iasi) will start setting the tone. Let the “green” and “sustainable” music play!

Read more about All People You Should Know on the Romanian Real Estate Market

Attila Beer is a graduate of the Technical University of Budapest and has been working with Alukönigstahl Hungary since 1993. After the establishment of the Romanian branch, he formed and led the local sales team. As a company leader, he engaged in the continuous development of the company, by building partnerships with companies in the field of metal constructions and architecture and by forming a strong local team. Since 2016, he also manages the Alukönigstahl branch in the Republic of Moldova and since 2020 Attila Beer is a member of the Board of Directors in OTP-Mobiasbanca Republic of Moldova.

Alukönigstahl is in a leading position in the aluminum, PVC and steel systems local market and it registered a EUR 21.5 mil. turnover in 2020. The company further targets business consolidation on the traditional office and commercial segments, as well as business expansion on the premium residential segment, given that the pandemic outbreak highlighted Romanians` need to live in better conditions.

Alukonigstahl is an exclusive dealer in Romania for Schüco (world leader in aluminum and PVC systems) and Jansen (steel profiles supplier). In 2020, Alukonigstahl delivered Schüco aluminum systems for more than 75.000 sqm of curtain wall for new real estate developments.

“Through our projects and partnerships, we have been pioneering this segment in Romania and up to present we developed several large “Schüco neighborhoods”. We aim to consolidate our existing portfolios through digitalization and by streamlining our supply chain, as well as to expand on new segments, such as the residential sector, which has high growth potential in Romania.”

Attila Beer is also a member of the board of directors of PPTT – The Romanian Insulated Carpentry Producers Association (an organization of which Alukönigstahl was a founding member) and is also a founding member of RoEnef – Romanian Association for the Promotion of Buildings Energy Efficiency. ALUKÖNIGSTAHL operates in Romania since 1995 and cooperates with the most experienced producers of façades, windows and doors construction in the Romanian market.

Recent projects:
U Center
Offices Jiului
Isho Offices Timisoara
Millo Office
Dacia One
Continental HQ in Timisoara
Skanska Equilibrum 2
AFI Tech Inox 2
Win Residences / PSC Group
Nusco City
Neo Timpuri Noi

Read more about All People You Should Know on the Romanian Real Estate Market

• Profile: Co-Founder & CEO, THETA Furniture & More
• THETA Furniture & More portfolio:
• + 1.500 local and international companies
• + 300. 000 sqm interior spaces
•  890 office spaces
•  505 commercial spaces
• 115 HoReCa spaces
• Experience:  + 20 years of experience in entrepreneurship & business development

Florin Gheorghe is Co-Founder and CEO THETA Furniture & More, with a proven executive management track record and over 20 years of experience driving sales growth in different industries as: consumer goods, flooring and since 2008 – in furniture & more. As the CEO of THETA, Florin Gheorghe is responsible for running all facets of the business. His skills in finding the most appropriate ways to approach the company’s targets are also based on his educational background: Florin holds a BS in Management & Marketing Romanian – American University, Bucharest.

The most significant achievement in 2020 is the sale transaction of 50% of the company to the Black Sea Fund, with positive implications for the long-term development of the company.

Looking way back, THETA is a dream-project launched in 2008, with the goal of making a difference in the interior design & fit-out industry. “Having our own production factory has quickly introduced us in various proportions projects, both locally and internationally, in sectors as: commercial, residential, office, medical, HoReCa,” Florin Gheorghe says. The portfolio of clients and projects has grown exponentially and, at the same time, the capacity of the factory (5.000 sqm in present) and the investment in modern equipment and technologies. THETA`s design and project management teams include architects, interior designers, civil engineers, mechanical and electrical engineers, with extensive expertise in design & construction fit-out projects. The company carries out tasks with utmost attention to detail, ensuring that client’s expectations are met at all times.

Focus on Interior General Contracting

In the last 6 years, the company redirected its focus for the role of interior general contractor, managing complex projects for clients, from design stage to implementation and delivery. “The main benefit for a client to work with THETA is not only that we have the responsibility for the entire process, but also the project expenses / time can be reduced by 15-20%,” Florin Gheorghe says.

“As we gradually move towards the new „normal”, along with positivity and resiliency, we understand that the safety & wellbeing of your employees and clients are top priority, thus we will continue investing in expanding our production facility in order to help our clients create or convert their offices, other spaces, into a droplet-safe environment. Our plans are to develop the company vertically and horizontally – more precisely, we will continue growing the current business and we will also acquire other companies from sectors related to ours.“

Major clients:

• Deloitte (total office spaces delivered 20.000 sqm), Architectural Design: HTO Architecture & Engineering
• VEEAM (total office spaces delivered 12.000 sqm)
• Gazprom (total of 18 gas stations delivered)

Large-scale office fit-out locations:

• THE MARK  
• myhive  
•  AFI
•  THE LANDMARK
•  Business Garden Bucharest

Projects locations:

•  Romania
• International (Belgium, France, Holland, Hungary, Switzerland)

“In a field where the present fights the past, Brisk Group chose a completely different side. It chose the future! I really think that excellence is not an act, but a habit. This is how ideas at Brisk Group come to life, because we love to build unique projects and manage successful partnerships,” says Claudiu Bisnel, Partner and Founder Brisk Group, a Project, Cost & Construction Management Services company, for BUCHAREST REAL ESTATE CLUB.  

Brisk Group was founded in 2016 and it is today one of the most successful construction consultancy firms in Romania offering Project, Cost and Construction Management services, with a portfolio covering over 100 projects and more than 600.000 sqm of managed & coordinated constructions. Among the projects in the portfolio, Brisk numbers a series of well – known developments such as Central District 4 Elemente, Luxuria Domenii Residence, Central District Viitorului 134 , Greenfield Residence or APP Town Residence in Bucharest, as well as over 20 projects from retail sector delivered both in Romania and Republic of Moldova or the Heathrow Airport, the Hinkley Point Nuclear Power Station or Carmistin Farms.

Brisk Group consists of a team of over 60 specialists, offering integrated solutions capable of guaranteeing the quality of each process as well as that of the entire project and has offices in Bucharest, London and Chisinau.

(27.04.2021)

Employees` Health & Safety has become an even greater concern for companies in the pandemic period, with all sectors of activity having seen how workforce infestation with Covid-19 virus leads to serios activity blockage, delays and budgetary unforseen expenses. As related to real estate developments planned for 2021, we discussed with Razvan Chiru, Managing Partner of EUROFIN, one of the leading Health & Safety  companies in Romania, about the major risks associated with Health & Safety on construction sites.

The Legal Frame

Buildings can present a great number of possible risks both in construction and operation. There are many duties placed on those commissioning, designing, constructing and operating buildings to control those risks. The Romanian legislation affecting health and safety in design and construction falls under the HG no 300/2006, with any developer or investor being required to work with safety and health coordinator during the whole project implementation. Also, in 2021, construction companies use a wide range of safety practices as part of their safety management programmes, with an increasing emphasis on creating prevention measures and a safety culture on the construction sites.

Risks of not having a Strong Health & Safety Plan

Developers, investors and tenants know that implementing a health, safety and security plan has a huge impact on their business. Nowdays, if they don’t have the correct health and safety procedures in place for every construction site, then they will most likely be breaking the law. This means that their business could be fined, sued or even banned from operating depending on the level of risk. They may also face the problem of compensation if a worker is seriously injured on the construction site and the project might even need to be stopped and delayed for investigation. That means an important impact on budget and terms of execution. An unforeseen accident on the construction site leads nevertheless to construction delays and reputational risks, which translates into unforeseen costs for the investor / developer.  

“In 2021, investors, developers and tenants are facing new challenges: new technologies, forgetting not every worker speaks Romanian, rushing trainings for workers, difficulty to identify hazards, putting maintenance aside. It is crucial for construction business to create and implement a safety culture, starting with top management. We need to ensure that health, safety and security plan is focused both on workers but also on whole business functioning, collective measures prevailing the individual ones,” says Razvan Chiru, Managing Partner of EUROFIN Health & Safety.

Saving People, Time and Money

In a nutshell, efficient health and safety plans help to reduce both the human and the business costs of injuries and unnecessary lawsuits, having a major impact on productivity and profitability. Additionally, improved health and safety standards help companies become more effective to finish quality projects on time and improve their business profile with customers and clients.

Not only is health and safety important to avoid injury, there are also plenty of other long term benefits that your business stands to gain. By implementing the right health and safety procedures, employees are much more likely to be happier in their roles. If workers have the right knowledge and tools, it can boost morale on the construction site and lead to better productivity. With less illness and injury you can also gain more productive working hours, which can lead to better profitability. In the long term it can also build a good reputation for entire business and it will help to retain staff.

EUROFIN Health & Safety is a leader on its market segment, having worked in the Real Estate sector with companies such as Skanska, Gran Via Real Estate, Lidl, P3, GSE or Atenor.

(11.03.2021)

The recent pandemic context has brutally exposed the vulnerabilities of the medical systems around the world, while recent fire accidents in Romanian hospitals in cities such as Bucharest or Piatra Neamt have only worsened the situation, underlining the lack of both responsibility and investments in public hospital infrastructure.

Many more hospital vulnerabilities will continue to surface in the next period, given the pandemic and especially the intensive care units – ICU (ATI) are highly exposed, says Raluca Soaita, founder of Tesseract Architecture, the single architecture company specialized in the healthcare sector and one of the few that operate in CEE.

“Many of the Romanian hospital buildings were not initially designed for this purpose,” added Raluca, also saying that most of the local hospitals are forced to function with electrical and gas installations that were improvised as additions to the initial structure of the buildings. “All these improvisations expose the buildings and patients to a high fire and epidemiological risk. Many of the public hospitals are deteriorated and more problems will appear in the near future.” the architect ads.

With the recent pandemic having put high pressure on the public  hospitals` capacity to treat other affections than Covid-19, the private health system remains the patients` single alternative. With the new young urban generation opting more and more for private healthcare services, due to their improved quality and patient quality treatment, this sector will continue to generate high demand, says Raluca Soaita. “The existing private health clinics keep on sustained rhythm of growth in the recent years  – our client Medlife announced 8% business growth in Q3 2020) and we believe that the need for medical infrastructure will keep growing in the next years, considering the still limited offer on the market,” says the architect.

Tesseract Architecture is a multi-disciplinary studio of architects operating across three divisions: medical architecture, commercial architecture and 3D animation. The healthcare architecture division of Tesseract is specialized in creating patient – centric designs for clinics and hospitals, with important projects in their portfolio, such as the Modular Hospital in Brasov, Sibiu County Hospital, the Modulal Hospital for Covid – 19 pandemic at Elias Hospital in Bucharest or the extension of the Children Clinical Emergency Hospital Marie Curie /Daruieste Viata.

One of few healthcare specialized studios that operate in CEE, Tesseract Medical has delivered creative concepts for both very large and smaller facilities and involves an extensive multi-disciplinary team in approaching a medical project, such as sociologists, anthropologists, psychologists, epidemiologists to name just a few.