Business Construct: Projects of the year: 10 investments that have moved the market. OCTAGON was involved in the construction of three of the projects

Two shopping centers developed by NEPI, five office projects stretching over  110,000 sqm, a road passage, a multifunctional hall and a  DYI store, are ten of the most important real estate investments delivered this year, on a market in which large projects worth hundreds of millions of euro missed, Business Constructor writes. OCTAGON CONTRACTING & ENGINEERING was involved in the construction  of three of these projects: Hermes Business Campus, Green Court Bucharest and Green Gate.

Top 10 investitii 2014

The cumulated investments in these projects reached almost 350 million euro, while a shopping center,  such as AFI Palace Cotroceni from Bucharest cost 300 million euro and the investment in Palas shopping mall from Iasi exceeded 250 million euro. Two of these investments, the office projects Green Gate and AFI Park, benefited from banking financing, which shows that the financial institutions keep being prudent in granting loans for construction.

Under these circumstances, two public projects have also reached the top of investments:  the underground passage Mihai Bravu from Bucharest and the new Multifunctional Hall from Cluj, as well as a Dedeman store, a 16 mil. euro investment,  built in Colentina.

The 10 projects are:

•   Vulcan Value Center- shopping center covering 25,000 sqm, located in Rahova area; investment: 47 mil. euro
•  Mihai Bravu Passage
• Targu- Jiu Shopping City- shopping mall with a leasable area of 27,000 sqm; investment: 30 mil. euro
• Dedeman Colentina
• AFI Park 2 and 3- two office buildings with 24,000 sqm of leasable space; investment: 40 mil. euro
• The Office Cluj- offices with 19,000 sqm leasable; investment: 26 mil. euro
• The Multifunctional Hall from Cluj- with a capacity of 7,200 seats; investment: 16 mil. euro.
• Green Gate- office building located on Tudor Vladimirescu Blvd.; investment: 57.5 million euro. OCTAGON performed the geotechnical works: diaphragm walls, bored piles, dewatering system and crown beam
• Green Court Bucharest- office complex developed in three stages on Barbu Vacarescu Blvd; investment: 46 mil euro. OCTAGON performed the infrastructure and superstructure works for buildings A and B
• Hermes Business Campus- office complex located in Pipera area, on 5-7 Dimitrie Pompeiu Blvd. OCTAGON  was general contractor for the first stage of the project: the construction of building B, and is currently building the foundation and superstructure of building C- the second stage of the project.

Top 10 investitii 2014

Hermes Business Campus and Sky Tower, case studies presented by OCTAGON at the event Contractor 2014

Nicole Sommer

OCTAGON CONTRACTING & ENGINEERING  was one of the special guests at one of the most important construction events: Contractor 2014- organized in Bucharest between  10- 11 November 2014. The International Expoconference of Construction Contractors has gathered this year 74 speakers, architects and  contractor, from over 20 countries, who have presented the major projects  built by the companies they represented.

Within the plenary session “Construction”,  Nicole Sommer- OCTAGON’s Commercial Manager, presented two case studies: HermesBusiness Campus and Sky Tower.  Nicole Sommer spoke about the main features of the two office buildings, as well as about the construction methods and technologies used by   OCTAGON. The company’s commercial manager used as presentation support, two videos picturing various execution stages of the buildings.

You can watch the presentation video, here:

OCTAGON  was general contractor for the first building of the office complex Hermes Business Campus, located on 5- 7 Dimitrie Pompeiu Blvd. in Bucharest and is currently  performing the infrastructure works consisting in diaphragm walls D 800, bored piles D 1,000 and D 1,500, foundation raft, crown beam and superstructure for the second building – C. The second building will have the same area- 37,000 sqm and the same number of floors- 4 basements +8 floors +technical floor, as the first building, which has been fully leased.

OCTAGON  also built the foundation of the tallest building in Romania: Sky Tower, located in Bucharest, on 246 A Calea Floreasca.  The  137 m tall building, counting 37 floors and 5 basements, visible from all the areas of Bucharest,  is part of the complex Floreasca City Center, developed by the Austrian company Raiffeisen Evolution.  OCTAGON  built the foundation in top- down system of  two reinforced concrete slabs, measuring  4,600 sqm each. The company also performed the deepest foundation in Romania: 20 m, within this project.

OCTAGON CONTRACTING & ENGINEERING

For more information click HERE. 

Phone: (+4)021.232.39.20

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Alexandros Ignatiadis, co- founder & shareholder OCTAGON: Construction companies could gain capitalization and financing through Bucharest Stock Exchange listing

The research team of OCTAGON CONTRACTING & ENGINEERING has made an analysis of the

construction market between 2009- 2014, to study the evolution of the sector during the five years and has emphasized the main issues the market has been facing.  “We have compiled five top 100 construction companies, following this analysis, taking into account turnover, profit and shared capital, reported by these companies within the mention time period.  The novelty element brought by this analysis is the fact that, compared to other rankings, which have been published so far and which include companies selected upon one NACE code or upon the main construction NACE codes, we have taken into account all the existing codes.”, said Alexandros Ignatiadis during the conference “Financing, Guarantee and Insurance - Classic versus Innovation towards 2020”, organized by the magazine “Masini si Utilaje pentru Constructii” .

The share of foreign construction companies on the Romanian market is too high

Top 100 for 2014 includes 35 foreign companies which totaled a turnover of approximately 4 billion euro, accounting for 40% of the total turnover reported by the 100 companies present in the top. These 35 companies have also reached 65% of the total profit and own 17% of the total share capital. This tendency, with small changes, has been present in all the five analyzed years.

“Basically the share of foreign construction companies in the Romanian market is around 30%. 

Considering that the construction business should be mostly local, in any country, this share is too high and raises concerns.

In Romania there are around 35,000 construction companies, and the companies present in the rankings that we have compiled have made 90% of the total construction sector turnover.” said Alexandros Ignatiadis.

The burden of banking guarantees is too high for the companies

For a total turnover of 180 bln euro the companies must provide banking guarantees worth 1.8 billion euro- 10% of the total turnover. The major issue is the fact that the 1.8 billion euro represent the double of the total share capital of these companies. Besides the guarantees for the ongoing projects, the construction companies must also provide post- execution guarantees of at least 5%. “Considering that the profitability of the area does not exceed 6%, the burden of banking guarantees is too high for the construction companies.” added Alexandros Ignatiadis.

A major issue is the weak capitalization of construction companies, generated by the fact that funds are blocked in banking guarantees.  “Romanian companies must find financing and capitalization solutions and this could only be done through listing on Bucharest Stock Exchange. Another solution to unblock the capitals would be to set- up employers’ associations or a guarantee fund, which could provide funds for eligible construction companies. 

We all know that these guarantees are not payment, but insurance instruments, that we give to the beneficiaries. In order to solve this issue the National Bank of Romania could also relax the prudential rules and allow the constructors to guarantee with insurance contracts. We could then use these insurance contracts to obtain guarantees from the bank.” concluded Alexandros Ignatiadis.

OCTAGON CONTRACTING & ENGINEERING

For more information click HERE. 

Phone: (+4)021.232.39.20

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