(P) Project1, about the Romanian office market during the pandemic. The company had a turnover of 14.3 million euros

03.08.2021 ZF English

Project1, a general contractor company specializing in design & build for office spaces, reached a turnover of 14.3 million euros in 2020, registering an increase of 54% compared to the previous year.

Founded in 2019 by 3 Romanian entrepreneurs, the company now has 45 employees, most of them construction engineers. In less than two years since its establishment, Project1 has carried out projects worth over 25 million Euros for 128 clients, mainly multinational companies but also well-known Romanian firms.

In January 2020, Project1 opened the largest Vitra showroom in Eastern Europe, thus concluding an important representation agreement in the Romanian market for the Swiss manufacturer of design furniture. The headquarters in Bucharest, located on the Bucharest - Ploieşti Road no. 1A within Bucharest Business Park, thus became the second Project1 office and showroom after the one in Timişoara, inaugurated in November 2019.

“2020 represented for the company a year of consolidation of processes, and the projects started in the first two months of the year continued, with few exceptions, in the background of the pandemic. The construction sector slowed, with a contraction of 20% -25%, but activity did not stop. Uncertainty has generated increased precautionary measures, with companies conserving their resources by suspending – but not cancelling - growth plans. All attention was focused on cash flow; budgets were revalued and investments postponed.

It is a trend that will certainly continue throughout 2021. The pandemic created a strong shock wave, but the company's management reacted maturely and on time. In fact, in this business segment we are looking today at a rapidly evolving market of more educated clients, who choose experienced consultants for their office construction and arrangement process.” explains Ştefan Olaru, COO Project1.

The average price for arranging and furnishing a class A office space today is around 500 Euro / sqm + VAT. This budget involves the actual organization and compartmentalization of spaces, adaptation and reconfiguration of mechanical and electrical installations, architectural decorations and the purchase of furniture. In the last 10 years, investment costs have almost doubled as offices have become more sophisticated through the implementation of multiple technologies and functions, the choice of complex finishes, and the opening of the market to specialized manufacturers from all over the world. Execution details become more delicate from year to year; expectations and requirements for office product quality are at least at the level of the residential market and the hotel sector.

"Today, less than 20% of office space is occupied, but there is data that leads us to believe that starting with the summer of 2021 companies will invite their employees to return to the office. Offices will not disappear, and employee density will not decrease. However, the spaces will become more functional, more intuitive to access.

In recent years, offices have accommodated and adopted features that provide users with the comfort of home. Employees will keep the ‘work from home’ option. Most will choose social interaction. Employees will return to the offices because they need to belong to the brand culture of the organization, they feel the need for active interpersonal communication.

Offices will become more efficient; they will be designed with clear boundaries in 3 distinct areas: the public for socialization; semi-public that will serve collaborative and learning activities; but also private areas that will have to help employees stay focused for a certain period.

We will witness a return to the traditional way of working, the classic one in which the employee spends quality time at the office, using spaces with precise functions - clear, easy to access and manage - but also shared areas, which are all well defined. The offices will be flexible, easy to reconfigure, and the boundaries between areas will be made of ingenious, easily-adjusted architectural elements.

Therefore, the tenants' investments in the actual landscaping works will decrease. The design lines will be significantly simplified, and that share of budgets will be easily transferred to technology, but also to products that will meet the needs of employees who must focus, actively collaborate and spend time in the office efficiently.

This change will redraw and thicken the boundaries between the time allotted to the employer and the time we set aside for family, friends and passions. This new paradigm also brings about a shift in the balance between personal and professional life, so necessary and healthy for all generations, regardless of age.

For 2021, we aim to exceed a turnover of 20 million euros.

"But we shall be careful along the way: we want to improve, we want to add new resources, we want an organic but accelerated growth, with perfect attention to the Project1 product and excessive focus on the client." says Valentin Nour, CEO Project1.

As a builder, Project1 last year turned its attention to two new segments, the industrial and the residential, both in full swing. The challenges brought by these two business segments are diverse, but they have an attractive potential. At the same time, there has been an increase in the appetite for continued investment in offices in recent weeks, as companies' plans call for a gradual return of employees to office buildings.