BUILDING ON SUCCESS IN CLUJ BY EXPANDING EAST
amily businesses are the lifeblood of the global economy. Some 85 percent of startups are established with family money, while the majority (70-90 percent) of the world’s GDP is believed to be generated by businesses that are majority owned by a single family’s members. Further still, family firms are shown to outperform nonfamily enterprises by 6.65 percent globally (in relation to
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Family firm Transilvania Constructii has set its sights on expanding its network of industrial parks around Romania, this having successfully completed a number of projects in its home region of Cluj-Napoca Writer: Tom Wadlow | Project Manager: Ryan Gray
return on assets) and as much as eight percent in Europe. In Romania, Cluj-based Transilvania Constructii has been the endeavour of the Timofte family for several decades. Set up in the 1950s when it was then known as Trustul de Constructii Cluj, the property investment and development enterprise was privatised in the 1990s before Andrei Timofte became CEO in 2011.
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“Working FOR & WITH …” Over the years, collaborating with different investment companies, like Transilvania Constructii, we managed to build thousands of square meters of production halls and warehouses. Among others the main facade of the D38 warehouse in 2015, the renovation of H1 warehouse facades in 2016, the construction of the steel structures and facades of TRC Park Jucu C1 and C2 warehouses in 2016-2017, the renovation of several existing warehouses and the building of internal partitions and office steel structures in 2017-2018, the construction of the steel structures necessary for Novis Plaza office building in 2018-2019, the construction of steel structures and facades of D39 warehouse in 2019. We couldn’t have achieved all this together, if at the first common work of the two companies, the Investor wouldn’t have given credit to the Builder. After this, there was no need for anything else, “just” know-how, good collaboration with the other construction and installation firms working on the buildings, the realization of expected quality and to keep the deadlines. Compliance with these “simple” expectations, we managed to build a good work relationship with the investors and learn from each other during the mutual work. The efforts and trials in overcoming the obstacles, of which we were exposed during the constructions, confirmed the professional relationship between the companies. In my opinion, this long term cooperation led to the fact, that a firm which worked in the beginning FOR investors turned into a company working FOR & WITH …
“With will, know-how and hard work everything is possible”
CLOSE COLLABORATIONS EVERY real estate developer relies on contractors and other partners to execute projects successfully. FOR Transilvania Constructii, this is no different, as Timofte explains: “In any real estate endeavour, it is important to have a network of suppliers and contractors. “THAT is why, in our company, there is a dedicated procurement and contracts department which deals with situations regarding construction materials, facility equipment, architects and so on. “THIS department receives requests from the development team, and they will actively search and vet potential contractors. Over the years, using an assertive approach to potential partnerships, we have developed a close network of contractors with which we work constantly.”
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“I was lucky to have entrepreneurial parents,” he says. “I really learned a lot from them, and I started working when I was about 18. Transilvania Constructii is a family business and early on I knew I wanted to continue my parents’ hard work. What I like about it is that it is a dynamic and challenging business that allows me to create new projects and help contribute to the development of a city or an area.” The area in question, at least for now, is Cluj-Napoca. Here the company is determined to contribute to a market
with potential and high yielding development opportunities in commercial property and residential buildings. “Cluj is booming at the moment,” Timofte continues, “and I believe this trend will continue because it offers a good quality of life, great education and a qualified workforce.” Although the CEO does point to a few challenges such as rising bureaucracy, finding and keeping skills and increased competition, Transilvania Constructii is operating in a local and national market that is beginning to bounce back strongly from a tough couple of years. Indeed, construction output in Romania increased 34.2 percent in August 2019 compared to the same month in the previous year, with July seeing a record 41 percent year on year growth in overall work volume. In terms of output value, the period 2019 to 2023 is forecast to see an average annual growth of 3.37 percent, the nation’s pipeline of projects worth $25 million or more standing at $103.1 billion as of May 2019. “I believe Romania is now a much more mature market for both the construction and development sector,” Timofte says. “Compared to the Central Eastern Europe region, Romania has some of the best returns for commercial real estate, attracting foreign direct investment and local investment.”
Words from the Founder - Szabo Szabolcs During my years at university, I already started to work at a steel structure manufacturer and building company. So, I soon realised that I like it and that I wanted to work with steel. I started to work at the tendering department, but after a while I was attracted to the construction site work, so I switched because I wanted to learn that too.
methods to be competitive. Our stable relationship with the construction material manufacturers and distributors helps us in this endeavour.
Sustainability As a construction company, we need to rely on the capabilities of our employes and equipments. We are also, like other builders, struggling with the shortage of the skilled workforce. Nowadays it is difficult to find skilled and reliable wokers – it is almost impossible, so our principle is to keep and train our employees. After that, to the existing hard core of employees, we can attach new workers, who will have already have people from whom they can learn the profession. That’s how we can build new worker groups, slowly, but surely. We not only build buildings – we also need to build ourselves, our environment and our company.
After two years of office and three years of on-site construction as employee, I decided to cut my axe into a big tree, at a young age, and I started the construction company called SZILKER. As the first work of the company, we had the opportunity to build a steel structure for a big multinational company in Cluj-Napoca. This happened more than 10 years ago.
A man of words and company of facts “We have to construct the buildings in the way the client wants, because he is the one, who will live, work or produce in it.”
In this challenging work, we are trying to help ourselves with continuous improvements, as well as acquiring new, bigger and more efficient machines.
This simple principle is governing our daily work, because I think it is not enough just to build a building technically well – it must meet the client’s expectations in every way. The constant contact with clients, during the works, contribute to finding appropriate solutions. By working in this way from our first construction work until today, our clients are trusting us and calling us continuously for further works.
Looking ahead We do not know what the future brings, but we are confident and aware of the direction we want to go. The company’s future plans include the expansion of our services and starting the production of the most used accessories by us. I am sure that, with strong will, knowhow and hard work, all of it is possible.
Competitivity Generally, clients are wanting three things from the builder: to be the cheapest, the quickest and the highest quality. Given that these three conditions cannot simultaneously be met, in order to meet clients’ requests, we interpret these expectations as follows: acceptable price for both sides, requested deadline and from the two previous conditions, the possible best quality. The construction market is very active and waving. As a result, we always have to compete with smaller or larger building companies. To be able to overcome them, we need to know exactly both our capabilities and our limits as well. The professional experience and knowhow accumulated over the years are our biggest advantage. The fact that each building has its peculiarities means we need to find the right materials and construction
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TRANSILVANIA CONSTRUCTII CONSTRUCTING CLUJ The company’s own developments reflect the CEO’s observations. Today, Transilvania Constructii owns and manages commercial property, ranging from light industrial warehouses to large logistic hubs, as well as office space. As mentioned, these developments focus on the Cluj-Napoca region, the company currently working on a handful of major projects. The first of these is Novis Plaza, a commercial office complex offering state-of-
A FAMILY VISION ASKED what stands Transilvania Constructii apart in the field of property development in Romania, Timofte cites flexibility towards customer needs and the ability to bring value to their businesses. THIS is encapsulated by the company’s strategy and mission, stated as follows: “TRANSILVANIA Constructii’s main strategy is to carefully mix investment and development activity to increase company value. “OUR purpose is to achieve a steady income stream that covers all our costs and generate high yields from all our investments and developments. “IN order to accomplish this, we follow a cautious and disciplined procedure in selecting properties. Our main focus is on industrial estates. We are constantly extending and modernising our properties to ensure a low vacancy rate. “TENANTS’ needs are most important – that is why we work closely with our tenants to suit their needs of expanding, relocating and re-gearing leases.” 8 | EME Outlook issue 33
the-art working spaces for local businesses. “Recently, we completed Building B of Novis Plaza, which provides around 7,000 square metres of rentable space,” explains Timofte. “At present, Novis Plaza is composed of Building A and B, with a total amount of rentable office space measuring over 14,000 square metres. The general theme of the building is to increase the productivity and creativity of the employees through a mix of facilities dedicated to their wellbeing.” Such facilities include a gym, lounge, games room, oasis terrace, meditation area and e-bikes, the site also fitted with 300 parking spaces, a restaurant and conference centre. Transilvania Constructii’s other main projects focus on the industrial and logistical space in the form of three industrial parks, two of which are situated around Cluj. TRC Park Jucu offers high-quality warehousing, office and parking facilities, the commercial centre proving to be a hit ever since it opened, enjoying a 100 percent occupancy through its first phase. “We are currently expanding TRC Park Jucu with approximately 40,000 square metres of space,” adds Timofte. “This is one of the most important investments made by our company in the Transylvania area, part of the logistics parks network developed under the TRC Parks brand, with the slogan ‘warehouses that work for you’. “The logistics park offers its clients several services and facilities, including class A offices and warehouses, parking spaces for small trucks and cars, 24-seven security with a surveillance camera system, a fully fenced perimeter, outdoor LED lighting, HVAC system, and many others.” TRC Park Jucu is also extremely well located, close to other business hubs, public transport links and Cluj’s international airport. TRC Park Transilvania was the first logistic and industrial project devel-
oped by Transilvania Constructii in the Cluj-Napoca region, again accessible from the city centre and very close to the airport. Opening in 2002, it currently houses over 90 tenants with various requirements – from cold storage and retail to logistics and transportation.
EXPANDING EAST Away from Cluj, the TRC brand has expanded into Bacau, near the border with Moldova. “Our project in Bacau is a premium industrial park with class A warehouses on a seven-hectare land plot,” says Timofte. “It is located in a strategic area in the region near Moldova, perfect for distribution and logistics. It is a greenfield development valued at around €15 million in an underdeveloped area, so we are a pioneer industrial developer here.” Indeed, the eastern region represents a key focus area for the company as it seeks to expand beyond its home territory, the CEO looking to maintain high occupancy rates across the firm’s entire portfolio and increase rent roll by 20 percent in the near future.
Transilvania Constructii has predominantly focussed its projects on Cluj, although the company is now looking to expand in other parts of Romania It is an ambitious target, and one which will not be met without overcoming challenges, especially in the area of skills. “The construction market is facing a huge difficulty in keeping a qualified workforce due to pressure on salaries and worker migration to Western Europe,” Timofte explains. “Because our real estate portfolio is expanding, the need for property management skills has become a challenge. “To respond to this, we have recently implemented a property management strategy. Along with this strategy, we
are actively seeking training and development opportunities for our property managers so they can be up to date with current trends and necessary skills.” Such skills development will be vital in ensuring Timofte and Transilvania Constructii hit their target to successfully develop 40,000 square metres of industrial space in 2020. And given the positive direction Romania’s construction industry appears to be heading in, the CEO concludes about future prospects. He says: “I am optimistic that the
positive trend in the industrial market in Romania will continue. My view is that rents will increase in prime locations from major cities, and yields have the potential to align to the wider Central Eastern European region.”
TRANSILVANIA CONSTRUCTII Tel: +40 264 416 597 firstname.lastname@example.org transilvaniaconstructii.ro
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TRANSILVANIA CONSTRUCTII Taietura Turcului 47, Cluj-Napoca, Romania Tel: +40 264 416 597 email@example.com transilvaniaconstructii.ro PRODUCED BY EME OUTLOOK MAGAZINE
Transilvania Constructii business brochure - EME Outlook - Issue 33