More and more construction projects are becoming profitable again. The rise in costs has leveled off and even decreased, and now there are skilled professionals available. In the future, the ones with a competitive advantage will be those who are able to launch their projects right now, encourages HTJ's Samuli Virtala.
It is currently a buyer's market in the construction industry. This is how Samuli Virtala, Regional Manager of HTJ's building construction unit, summarizes the situation.
– There are good professionals available, and the price of projects can be up to a fifth cheaper than a year ago. It is therefore time to launch the projects that have been put on hold in recent years.
– Turku has strong operators and industries that don't take a hit from small setbacks. It would be great if they started implementing their projects now. That would kickstart a good momentum again, Virtala reflects.
Good momentum is needed, as the construction industry has been struggling with various difficulties in recent years. The COVID era punished the sector with, among other things, operational restrictions, while the war in Ukraine drove up costs and caused material shortages. On top of that came inflation and rising interest rates. Many construction projects have been put on hold due to costs that spiraled too high and uncertain future prospects.
– When prices rose sharply after the start of the war in Ukraine, many developers waited for them to come down. However, the leveling off of price increases took perhaps longer than expected, which meant that many one-time builders, in particular, remained to observe how the situation developed. That was when uncertainty began to arise about when it would be a good time to start again.
“The appeal of the Science Park is only growing.” Samuli Virtala
The delay in project preparations is now beginning to manifest as the number of projects under execution decreases. The planning of new projects dipped in the last couple of years, because for some projects, it has not been possible to properly prepare plans, and thus it is not possible to proceed to the construction phase.
However, it would be worth acting now, as contract prices have fallen significantly.
– I have a project on my desk that was put out for tender a year ago. At that time, the tender prices received were interpreted to contain so much pricing uncertainty that it was not worth starting the construction. Now, at the beginning of the year, a new tender was conducted, with costs about 20 percent lower than a year ago, Virtala says. He outlines that a similar trend is now visible in other construction projects as well.
There are many reasons why prices have finally turned downward. Virtala speculates that new supply chains have been found for products and services, for example. In addition, the risks at different stages of the supply chain have normalized, and products can now be obtained more affordably. Part of the reason is also that competition has tightened so much that operators have been forced to adjust their prices.
According to Virtala, the outlook for the construction industry in the Turku region is currently hopeful. Numerous large projects are in the pipeline, and the industry is waiting for them to materialize.
One of the significant new openings is the Kupittaan Kärki project, which will create high-quality and diverse urban space in Turun Tiedepuisto.
– Kupittaan Kärki is a huge opportunity for the entire Tiedepuisto! The whole entity is so vast that, through side projects, there will be enough work for a great many real estate and construction industry operators.
HTJ, one of Finland's leading construction management agencies, has been closely involved in implementing many construction projects in Turun Tiedepuisto over the last ten years.
HTJ has been involved in the development of new projects in Tiedepuisto, such as InfraCity, the Visitor and Innovation Centre Joki, Kupittaan Palloiluhalli, EduCity, and CivilCity. In previous years, it has also implemented extensive space modifications and improvements in BioCity, ElectroCity, and PharmaCity.
– The attractiveness of Tiedepuisto only continues to grow. Typical for Turun Teknologiakiinteistöt's projects are ambitious environmental goals and an advanced understanding of user needs. These are things and values that fit perfectly with our own work, and have also partly enabled us to develop our expertise.
"Good team spirit guarantees a better result"
Uncertainty should not be feared – what is more important is the open and active promotion of matters according to the best information available at any given time. This is how HTJ's Regional Manager Samuli Virtala summarizes his management motto.
For Virtala, important things include good team spirit, respect for others, and an open atmosphere spiced with humor. A Master of Science in Technology, Virtala has worked in the construction industry, first in the construction company founded by his father and in site management roles, then for ten years in consulting firms. In 2021, he was appointed Regional Manager for HTJ's Turku Building Construction unit. At the same time, he became a member of HTJ's management team.
Operating nationwide, HTJ offers project management, construction management, and site supervision services. In its projects, HTJ acts as a representative, expert, and advocate for property developers. A fundamental principle of the company is that HTJ has no financial ties to design or contracting organizations. Of the company's over 200 employees, about thirty work in Turku.
Virtala describes himself as a manager who wants to support the expertise around him.
“We have a tremendous amount of expertise in our company. One should certainly never imagine that they always know best how things should be handled,” Virtala laughs.
He respects the company's experienced employees and wants to encourage them to pass on their knowledge to younger professionals. Otherwise, there is a risk that when the veterans eventually retire, their tacit knowledge will disappear with them.
“Since you cannot clone yourself, you need to develop new talent alongside you. It is definitely possible when people are encouraged to do so.”
Virtala emphasizes that the most important aspect of management is creating a good team spirit. This affects job satisfaction but also ensures better results. When the spirit is good, schedules are met and operational reliability improves.
“Good leadership is about forming common goals and knowing how to communicate them to all parties. We are often a hub between different actors, so our specific role is to make things work!”
HTJ
Industry: Construction management
Founded: 1999
Employees: approx. 200
Revenue: approx. €26 million (2023)