Bog’Art is a group of companies providing integrated building services in Romania, with activity in real estate development, architectural design, construction, project and building management.
CEEREM: You are directly linked to Bog’Art, the company bearing your name and growing with you ever since you were born. How does the evolution of the real estate market in Bucharest look like through your eyes?
During the last five years, the city’s landscape was transformed through various office projects and business hubs developed by investors. 10-15 years ago, skyscrapers were a rare sight, but nowadays they have become a normal piece of the urban puzzle. This evolution is directly linked to better infrastructure, new metro stations, solid investment plans and better predictability. In the past, when 5 or so buildings were developed in the span of 2 years, it was considered a “peak”, but nowadays this is a constant pattern, thanks to the growing investment potential available in Romania.
About 50% of your projects are in the office sector, but you also have expertise in other real estate segments. Did the pandemic influence your strategy in any way?
CEEREM: You mentioned the pandemic only accelerated the rhythm of change – what are the challenges but also the benefits you drew from this period?
Our business is pro-cyclical and service oriented by nature, therefore must be well calibrated to the general macroeconomic trends. In summary, the momentum carried well into the pandemic and during lockdown many of our sites continued largely unaffected and even managed to get ahead of schedule with greater on-site productivity mainly due to readily available workforce, which was an issue in the past. However, the lagging effect of investment cycles and unexpected surge in commodity prices is definitely a challenge on the construction industry because a half-year ‘wait-and-see’ period weighs heavily when it comes to re-starting a 2-year long average construction timeframe. This year is going to be unpredictable in pricing and decisions on starting new builds due to the postponed decision-making from 2020 combined with massive capital allocated by governments and a flight to real assets by investors, creating a faster-than expected revival of activity which puts high pressure on prices in a period where there is still uncertainty and adjustment in business plans for certain asset classes in the real estate market.
CEEREM: Looking towards the next two-three years – what are the main priorities for Bog’Art?
Going back to what I mentioned before, diversifying our portfolio is definitely one of the most important plans. We’d like to bring balance between projects (residential, industrial, retail and offices) and give equal importance to all of them, not only to the landmark high-rises we are most well-known for. Furthermore, we’re looking to focus more on adding significantly more of our own real estate development projects – from buying the plot of land to managing the final building. We intend to offer an integrated solution that covers the entire life cycle of the building through the group of Bog’Art companies.
CEEREM: Do you have a final message about the Romanian real estate market?
At a macro level, investors can take advantage of all the major benefits found here: economic growth, political context, local assets; but the state of things shows that real success is mainly achievable through collaboration with a local coordinator, entrepreneur or developer. Partnering with a strong local player is customary in many emerging economies and Romania’s real estate market demands direct involvement due specifically to these particularities.