Video: OCTAGON built the foundation in top- down system for Sky Tower- the tallest building in Romania

Reaching 137 m in height and counting 5 underground levels and 37 ground levels, Sky Tower is the tallest building in Romania. The building, located on Calea Floreasca is visible from any area of Bucharest. OCTAGON CONTRACTING & ENGINEERING built the foundation of Sky Tower and performed thus the deepest excavation in Romania, so far: 50 m. The infrastructure works also included the execution of diaphragm walls D 1,000, foundation barrettes D 600 and dewatering systems. OCTAGON performed the construction in top- down system of three reinforced concrete slabs, covering 4,600 sqm each. The video renders the entire execution process of the foundation works.

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Video: Hermes Business Campus- execution of building B

In June 2014 OCTAGON CONTRACTING & ENGINEERING delivered the first building of the office complex Hermes Business Campus (Dimitrie Pompeiu Blvd.- Bucharest). The construction of the building stretching over 36,000 sqm and counting 4B + 8 E+ Technical floor in height began in December 2010. OCTAGON is now working on the second stage of the complex- building C. Hermes Business Campus, the first project of the Belgian company Atenor Group in Romania, will have three development stages and will cover 78,000 sqm at the end.  OCTAGON won the Quality Trophy ARACO 2014 with this project. The video renders the execution stages of building B.

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The Advisers/ Knight Frank: Office take- up in Bucharest up by 12% in H 1 2014. First building of Hermes Business Campus, delivered by OCTAGON, fully leased

Office take-up in Bucharest amounted to 132,000 sqm in H1 2014, up by 12% year-on-year, according to the latest survey of The Advisers/ Knight Frank. Pre- leases and relocations each accounted for 29% of leasing deals, while renewals represented another 20%. Notably, firm expansions and new market entries are on the rise- representing 22% of activity- supported by strengthening economic conditions.  The Romanian economy powered ahead in 2013, with GDP growth exceeding expectations, reaching 3.5%. Growth of approximately 2.5% is forecast for 2014. Business sentiment continues to improve, with more international firms considering Bucharest as a major outsourcing location in Central and Eastern Europe.

Green Court Bucharest- building A

Occupiers in the IT & C sector were the most active players in the first half of 2014, with telecommunication providers Vodafone and Orange signing the two largest deals. Vodafone agreed to prelease 16,000 sqm in the Bucharest One project with the option to further expand, while Orange leased 13,700 sqm in Phase one of Skanska’s Green Court, delivered by OCTAGON CONTRACTING & ENGINEERING in 2013. OCTAGON also built the superstructure of the second building of Green Court office complex, located in northern Bucharest on Gara Herastrau Street.

Another A class office development built by OCTAGON, which was fully leased, is the first building of Hermes Business Campus, stretching over 37,000 sqm and rising eight floors above the ground. The building also has 4 basements, one ground floor and one technical floor. OCTAGON has just finished building the infrastructure of the second building of the project and is now working on the structure.

Hermes Business Campus- building B

Bucharest has recently seen a rise in development activity, with a total of nine new and refurbished schemes completed in H 1 2014, providing 120,000 sqm of class A space. The development pipeline has also expanded and currently stands at 200,000 sqm; of this, 55,000 sqm is expected to cover over H2 2014.

Despite the increase in new supply, the average vacancy rate for class A and B stock fell by 6 percentage points year-on-year to 17.4%. This is largely on the back of significant lettings at completed buildings, including the recently delivered Floreasca Park, which was fully leased by The Advisers/ Knight Frank.

Over H 1 2014, headline rents across all major submarkets remained stable. While headline prime office rents are expected to remain in the range of 18- 18.5 US per sqm per month, over the second half of the year, incentives are likely to harden slightly.

Hermes Business Campus- foundation works on building C

Investment market

The first half of 2014 saw a marked increase in property investment activity, with total volumes reaching a remarkable 460 million USD. Investment volumes in 2014 already exceed those of 2013 and, with several prime assets on the  market, further major transactions are expected to be completed in the second half of the year. 2014 is on the track to surpass the total amount transacted over the last two years, potentially breaking 2010’s record of 543 million USD.

While transaction activity was dominated by domestic restructuring deals, investment demand remains robust, with both domestic and international effort focused on office and retail assets in Bucharest.

While transaction activity was dominated by domestic restructuring deals, investment demand remains robust, with both domestic and international interest largely focused on office and retail assets in Bucharest.

The largest deal in H 1 2014 saw investment fund Globalworth purchase the Upground complex in Pipera from Deutsche Bank’s RREEF for some 200 million Euro. The deal included the sale of a residential compound, as well as both BOC and BOB towers, for 110 million and 42 million Euro respectively.

While the current strong economic backdrop is attracting greater investor interest, the limited availability of prime office stock across major markets has proven to be a hindrance to activity. However, this is set to change, as Bucharest’s stock of class A buildings continues to increase, helping to improve office market conditions and offering a wide range of opportunities to international investors.

As a result, prime office yields in Bucharest have seen moderate compression over the last twelve months, hardening by 25 bps to stand at 8.00%. Sustained investment demand over the second half of the year is likely to drive prime yields below 8.00%.

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OCTAGON awarded Quality Trophy ARACO 2014, for the project Hermes Business Campus

OCTAGON CONTRACTING & ENGINEERING was awarded the prize Quality Trophy ARACO 2014, for building B within the office complex Hermes Business Campus. Another nine reference projects performed by the companies Hidroconstructia, Bog’Art, Iamsat Muntenia, ACI Cluj, Iridex Group, IMSAT, Dedal Bahamat and the consortium Recon- Romelectro- Mitliv were awarded the same prize during a ceremony which was held Thursday, November 27th at Madgearu Hall within the exhibition center Romexpo, in Bucharest. This has been the 19th edition of ARACO Quality Trophy. The event is organized every year.

Quality Trophy ARACO 2014

OCTAGON was general contractor for building B within the office complex Hermes Business Campus, located on 5-7 Dimitrie Pompeiu Blvd. in Bucharest. The company delivered the works in June 2014. The complex which has been BREEAM certified with excellent grade for structure is the first investment of the Belgian group Atenor in Romania and will be built in several stages and will eventually cover 78,000 sqm.

Building B, the first one built within the complex, has a total area of 37,000 sqm and 4 basements + ground floor + eight floors+ technical floor.

The works began at the end of 2010, when OCTAGON won the infrastructure contract for the four underground levels. The geotechnical works performed by the company were the following:
• Diaphragm walls D 800 mm, h = 24,75 m; area = 7.600 sqm;
• Crown beam 0.65 m X 1,00 m- 297 m;
• Foundation piles D 1,500 mm and D 1,000 mm, h = 25,85 m;
• Test pilot;
• Manufacturing and installation of metal profiles for slab support;
• Manufacturing and installation of metal column heads for the support of slabs for the 3rd and 4th underground levels;
• Design and execution of dewatering system;
• General excavation to quota 13.72 (60,000 cubic meters).
• Construction in top- down system of two reinforced concrete slabs, covering 3,950 sqm each, for the underground levels 3 and 4;
• Construction of foundation raft 1.4 m, height – 6.261 cubic meters.

Hermes Business Campus- building B

The geotechnical works were delivered in October 2011.

In 2012 OCTAGON was contracted by Alpine Bau- the general contractor of the building back then, to perform the concrete reinforcement works for the superstructure.

In 2013 OCTAGON took over the general construction contract from the Austrian company and added a new work package to the contracted works, consisting in the execution of:
• Superstructure: ground floor, levels 1-8 and technical floor;
• Architecture works: walls, ceilings, floors, interior finishes, masonry and facade.
• Electrical installations;
• Sanitary installations;
• HVAC.

The company is currently performing the superstructure works on the second building- C, after delivering the special foundation works on the same building.

Hermes Business Campus- building C

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.

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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.

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