Could you highlight some pivotal moments in Erbașu’s evolution and its current footprint in the local market?

Constructii Erbasu was established in 1990 by my father, initially focusing on urban infrastructure like sewage systems and district heating. Over 31 years, we’ve diversified our activities, emphasizing civil constructions such as offices, apartments, and retail. Notably, we built Romania’s first Metro hypermarket and the inaugural Ibis boutique Hotel in Bucharest. By 2000, Erbasu had grown substantially with a turnover of USD 10-15 million, 1,000 employees, and a strong real estate focus. Currently, our turnover exceeds EUR 150 million, and we aim to expand our real estate division further in the coming years.

Given your experience, what’s your vision for the Romanian real estate market in the near future?

Opportunities will abound, but construction firms will face challenges due to migrating workforce and escalating raw material costs. Romania presently offers profit margins reaching 40-50%, significantly higher than Poland’s 20%. However, this local advantage is likely to diminish as the market becomes more aligned with Central and Eastern Europe (CEE) and Western Europe (WE). Clients now prioritize not just the initial investment but also operational costs and project quality, preferring higher acquisition costs over hefty maintenance bills.

Despite the pandemic, the construction sector experienced growth. What factors do you attribute to this?

The growth resulted from ongoing projects and increased salaries (from EUR 500 to EUR 800-1000), reducing workforce migration. Automation and robotization attracted more young people to the construction sector, although digitalization in real estate lags behind. The pandemic is expected to positively impact digitalization in construction, transforming the industry significantly in the next decade. With an impending financial crisis, investment in construction will be crucial for recovery, especially as workforce scarcity looms, pushing for automated solutions.

Rising raw material prices have affected the market. How has Erbașu been impacted?

The pandemic disrupted the supply-demand equilibrium, exacerbated by production crises and factory closures. Increased naval transportation costs tripled, significantly impacting material costs, which, compounded by Romania’s dependency on imports, poses future challenges. Erbașu hasn’t faced immediate consequences yet, but anticipates eventual repercussions. NSI Romania’s reporting of decreasing raw material prices contradicts market reality, which reflects up to a 40% increase.

What are Erbașu’s priority plans for the next two to three years?

We’re keen on various real estate investment opportunities across sectors. For instance, the Arbo Residence Mogosoaia project is due for inauguration soon, and we’re eyeing infrastructure and public buildings ventures. Our notable projects in Romania could serve as a springboard for international expansion, possibly in neighboring countries like Serbia or Bulgaria.

What’s your final message about the Romanian real estate market?

Romania will likely become an attractive market for investors seeking average yet secure profits in the coming years. The previous 15 years favored risk-takers seeking bigger but volatile profits, a trend likely to reverse, offering smaller but safer margins. Positioned at the crossroads of Europe, Asia, and Africa, Romania boasts prime investment opportunities in an enviable location.