OCTAGON in TOP 100 ROMANIAN CONSTRUCTORS drawn by Business Construct

Over 3.4 billion euro in turnover, profits exceeding 230 million euro and 34,000 jobs – these are the main coordinates of the biggest 100 constructors that were active on the local market in  2013. Construction industry is dominated by Romanian players, accounting for about 60% of the top 100 constructors, but the biggest profit share, almost 150 million euro is cashed by foreign groups from Italy, Austria or Germany, active on the local market, Business Construct writes. The magazine drew up a top of the first 100 constructors in Romania in 2013, according to turnover.

OCTAGON CONTRACTING & ENGINEERING ranks on the 55th position with a 20 million euro turnover in 2013 a spectacular growth against 2012 when the turnover was 8 million euro. The main projects performed by OCTAGON in 2013 were Hermes Business Campus (7-9 Dimitrie Pompeiu Blvd.) and Green Court Bucharest (2-4 Gara Herastrau Street), both located in Bucharest, as well as Shat Al Basra Electric Power Plant (Basra- Irak).

The first top 10 positions in the ranking are filled by:
⦁    Strabag S.R.L. - turnover = 233 mil. euro
⦁    Straco Grup- turnover= 140 mil. euro
⦁    Hidroconstructia- turnover = 136 mil. euro
⦁    Delta ACM 93- turnover = 123 mil. euro
⦁    Euro Construct Trading 98- turnover = 105 mil. euro
⦁    Tirrena Scavi Condotte Cossi- turnover = 93 mil. euro
⦁    Strabag A.G. – turnover = 91 mil. euro
⦁    Tehnologica Radion- turnover = 81 mil. euro
⦁    Tehnostrade- turnover = 77 mil. euro
⦁    Astaldi Spa- turnover = 72 mil.euro

In the almost 9 years of activity OCTAGON was geotechnical works contractor for 4 of the first 10 players: Straco Grup, Strabag S.R.L., Euro Construct Trading 98 and Astaldi Spa.
The top was drawn up based on the turnover reported at the end of the year and includes information about the net profit or loss and the headcount of each company. The 2012 financial results are also presented in parallel for a full perspective of the business evolution. The data provide a view of the way in which the local construction market evolved last year, considering that the industry has lost about 40% of its value since 2009, due to investment cut, both in the public and private sector.

The turnover of the biggest 100 players last year declined by almost 10% against 2012, while the cumulated net profit almost tripled, to over 230 mil. euro. This was due to the fact that the construction works volume dropped triggering a decline of the constructors’ business as well. The companies focused on optimizing their business and opted for cost cuts, Business Magazin also writes.

Cost cuts reflected best in the evolution of the employee number. The 100 constructors had around 34,000 employees in total last year, after letting go 5,000 people against 2012.
An analysis of the constructors based on the capital nationality shows that of the 100 top firms, around 40 have mainly foreign shareholders, the turnover of these companies totaling 1.4 billion euro, a 7% decline against the previous year. At the same time, foreign constructors had almost 5,800 employees last year, 800 people less than in the previous year. These data reveal that foreign managed with 17% of the employees of the top 100 constructors to generate 41% of the turnover, resulting into better productivity.

OCTAGON is working on a major infrastructure project: Piata Presei Underpass

OCTAGON has recently started the geotechnical works on one of the major infrastructure projects of Bucharest City Hall: Piata Presei Underpass. The company is building diaphragm walls- 9,950 sqm, 80 cm thick.

"Piata Presei" Underpass Project

passage is located at the junction of four high traffic roads – Bucharest- Ploiesti road, Kiseleff road, Mărăşti blvd. and Poligrafiei blvd. – an intersection crossed by approximately 12,000 vehicles per hour.

The purpose of building the underpass is to reduce the crossing time for both pedestrians and for vehicles. Studies regarding traffic flow improvement have shown that an underpass would reduce the waiting time for vehicles by 74%, according to Arena Constructiilor.
Works will be performed in stages in order to maintain traffic flow.
The investment value is 60.4 million lei and the delivery term is nine months from the beginning of the works.

Video: Octagon- Execution of sheet piles at OMV- Petrom Brazi combined cycle power plant

Sheet piles are geotechnical elements used to support the vertical walls of deep excavations, which go below the level of ground waters. Sheet piles can connect and form a water- tight wall, which protects the building undergrounds against water seep.


Watch the video to see how OCTAGON executed sheet piles at the project with the highest value in its portfolio so far: Combined cycle power plant 867 MW OMV- Petrom Brazi.

Agenda Constructiilor: OCTAGON- Geotechnical works worth over 6.5 million euro in Romania

Octagon Contracting & Engineering, one of the main players in the geotechnical constructions field in Romania, with a turnover worth 19.6 million euro in 2013, is currently working on national projects amounting to around 6.5 million euro.

Alexandros Ignatiadis

For 2014 the company’s management has estimated a 16 million euro turnover. "In the first half of this year we started works on three new projects.  In March we began executing the superstructure of building B within the office project Green Court Bucharest, developed by Swedish group Skanska on Herastrau Street, in the Capital. The works are worth 1.9 million euro. We also delivered the first building within the same complex.A project begun last autumn, on which we are still working, is an office building, PC Business Center, located on 7-9 A Bucharest - Ploiesti National Road, a 1.7 million euro contract", said Alexandros Ignatiadis, co-founder and shareholder of Octagon C&E. The company also continued to work on the rehabilitation of the National Road 6 (Domasnea - Caransebes, km 408+ 895 - 449+ 960), an investment started in 2011. The total value of the works performed within this project is almost one million euro. "We have two new infrastructure projects. One of them consists in the rehabilitation of the railway Brasov - Simeria, Coslariu – Sighisoara section, Micasasa – Coslariu segment, worth 260,000 euro. We have been subcontracted by Aktor for this project. Our most recent project consists in the execution of bored piles for sections A, D and E of the second section of Lugoj – Deva highway, a 5 million lei contract (around 1.13 million euro), granted by the general contractor Salini Impregilo", Octagon manager also said.
The company will start in the near future the geotechnical works on the underground passage from Piata Presei Libere in Bucharest. The general contractor of the project is Apolodor and the value of Octagon’s contract is 600,000 euro.

Expansion of the activity on Iraq and Kurdistan markets
Octagon is also performing construction works abroad, in Iraq and Kurdistan markets. This year the company will consolidate the activity of Iraq branch (open since 2011) and will continue works on 125MW Shatt Al Basra Power Plant, from Basra and of the residential complex Iraq Gate, developed by Iraqi investor Almco in Baghdad. Octagon is also in the negotiation stage for the construction of Bawanur dam din Kurdistan, a project worth 5 million dollars, bid in partnership with Hidroconstructia SA.

Negative conditions to maintain on the Romanian construction market
According to Alexandros Ignatiadis, 2014 will not be very different from 2013. "In the first trimester the sector contracted 3%, while the GDP went up by 3.8%, so the construction sector was not a growth engine for the economy. The private sector was revived by the construction of two malls in Bucharest and of several factories countrywide, but these investments have not generated profit yet. These results, combined with the activity decline in the public sector have led to the 3% contraction of the construction sector", showed Octagon manager. At the same time the elections have not influenced the construction sector positively either, due to political instability. "During the elections a large part of the investments for constructions are redirected towards public sectors that can generate votes, such as social protection, to influence the electorate", explained Alexandros Ignatiadis.

At the same time, according to the manager, the new public bid rules have not solved the major issues in the area. "Maintaining the lowest price as main criteria to determine the winner of a contract can significantly affect the quality of the delivered projects. A more detailed approach and deep changes in this respect are needed.” said Octagon shareholder.


You can read the romanian version of the article here.

CBRE & Jones Lang LaSalle: Two of the largest office schemes delivered in the Q 1 of 2014, built by OCTAGON

Hermes Business Campus - Structure 1

Total modern office stock reached in Q1 2014 2.17 million sqm,  split between class A : 0.823 mil sqm and class B: 1.347 mil sq m. In total there are around 230 properties. In addition there are over 300,000 sqm located in class C properties, without taking into account the office space within residential villas according to CBRE report “Bucharest Office Market View”.


The largest schemes due to open in the first half of 2014 were City Offices, Hermes Business Campus, Green Gate and AFI Business Park 2, which will add approximately 87,500 sq m of office space to the city’s modern office stock, according to Jones Lang LaSalle report “Bucharest Office Market Profile Q 4 2013” .

OCTAGON delivered the first of the two office building of the office complex Green Court Bucharest, located in northern Bucharest, on 2- 4 Herastrau Street. Geotechnical works performed by OCTAGON consisted in excavation, diaphragm walls D 600 and anchorages.  The Romanian construction company is now working on the execution of the concrete structure of building B. Green Court will be a green building, LEED Gold certified and will stretch over 52,000 sqm.

Hermes Business Campus- Blvd Dimitrie Pompeiu,  Nr 5-7, Bucuresti

After delivering the special foundation works in 2011, OCTAGON CONTRACTING & ENGINEERING became the general contractor of one of the largest office schemes in Bucharest: Hermes Business Campus. The office complex was built through top- down excavation method and was completed in the first quarter of 2014. Hermes Business Campus has a total leasable area of 78,000 sqm and is also a green office project, which will be audited for BREEAM (BRE Environmental Assessment Method) certification.

Q1 2014 brought a good start in terms of demand, as the total leasing activity was up 39% compared to Q1 2013, meaning over 66,500 sqm transacted office space. Pre-leasing activity was up, for the third quarter in a row, now with 40% of total take-up activity. As previously anticipated, during this quarter was registered the highest volume of pre-leases in the last 2 years – over 21,000 sqm, according to CBRE.

Hermes Business Campus- Structure 2

With an increase of demand q-o-q and low volume of new stock, vacancy rate registered a decrease from 15.1% to 15.0%. It is important to highlight the considerable difference in vacancy rate from one sub-market to another (from as low as 4.8% in West to 20.5% in Pipera).


Prime headline rent is stable in the past several quarters (18 € /sq m/month) and prime yield also stable at 8.25%.

Bucharest ranks among the least developed office market when compared to other capital cities in CEE. As such, the Romanian capital hosts just 52% of the modern office stock in Warsaw, but with an overall residential population below the one registered in Bucharest (1.7 versus 1.8 million people). By sub-market, Pipera and North sub-markets are home to 54% of the total modern stock, as these areas allowed for the development of rather big properties, on average over 18,000 sq m / property. Center area holds the biggest number of office buildings, around 74 properties, as on average a property has less than 5,000 sq m.

Green Court Bucharest- Structure 

A

Recovery is on the way for the Bucharest office market, but there are different speeds of recovery by sub-market, as evidenced by evolution of vacancy rate.
For 2015 CBRE anticipates new stock of less than 80,000 sqm, but at least another 130,000 sqm are in various stages of planning and could be delivered by end of next year.

Civil constructions- rehabilitation of culture and office center Bucharest Commodities Exchange

Culture and office center Bucharest Commodities Exchange, located on Calea Rahovei 196 is a historical monument, built in 1898, renovated by OCTAGON CONTRACTING & ENGINEERING in 2007.

The construction company was general contractor for this project and executed consolidation works consisting in: doubling of foundation beams, execution of exterior masonry coating, execution of interior supplementary columns, interior platforms, new enclosure walls and reconstruction of wooden roof framing.

Watch the video to see all the stages of the renovation process.