More and more construction projects are becoming profitable again. Cost increases have leveled off and even declined, and now skilled professionals are also available. In the future, the advantage will lie with those who are able to start their projects right now, encourages HTJ's Samuli Virtala.
The construction industry is currently a buyer's market. This is how Samuli Virtala, Regional Director 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. So it is time to launch the projects that have been put on ice in recent years.
– Turku has strong operators and sectors that don't take a hit easily. It would be great if they started implementing their projects now. That would kickstart a good momentum again, muses Virtala.
Good momentum is needed, as the construction industry has been struggling with various difficulties in recent years. The COVID-19 period punished the sector with operational restrictions, among other things, and the war in Ukraine raised costs and caused material shortages. On top of that came inflation and rising interest rates. Many construction projects have been put on ice 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 stabilization of price increases took perhaps longer than expected, which meant that many one-time builders, in particular, remained on the sidelines to monitor the situation. That is when uncertainty arose about when would be a good moment to start again.
“The appeal of the science park is only growing.” Samuli Virtala
The delay in project preparation is now starting to materialize as the number of projects under execution decreases. Planning for new projects dipped in the last couple of years, as some projects have not yet been able to proceed properly with planning, making it impossible to move to the construction phase.
However, now would be the time to act, as contract prices have fallen significantly.
– I have a project on my desk that was put out for tender a year ago. The bid prices received at the time were interpreted to contain so much pricing uncertainty that it was not worth starting the project. A new tender was held early this year, and the costs are about 20 percent lower than a year ago, says Virtala. He notes that similar trends are now visible in other construction projects.
There are many reasons why prices have finally turned downward. Virtala estimates that, for example, new supply chains have been found for products and services. In addition, the risks at different stages of the supply chain have normalized, and products are now available at lower costs. Partly the reason is also that competition has tightened so much that operators have been forced to review their prices.
According to Virtala, the prospects for the construction industry in the Turku region are currently hopeful. There are numerous large projects underway, and the industry is waiting for them to materialize.
One of the significant new developments is the Kupittaan Kärki project, which will create high-quality and diverse urban space in the Turku Science Park.
– Kupittaan Kärki is a huge opportunity for the entire Science Park! The whole is so extensive that, through various side paths, it will provide work for truly 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 the Turku Science Park over the last ten years.
HTJ has been managing the construction of new properties in the Science Park, such as InfraCity, the Visitor and Innovation Centre Joki, the Kupittaa Ball Hall, EduCity, and CivilCity. In previous years, it has also been involved in implementing large-scale space renovations and improvements in BioCity, ElectroCity, and PharmaCity.
– The attractiveness of the Science Park is only growing. Typical of Turun Teknologiakiinteistöt's projects are ambitious environmental goals and a deep understanding of user needs. These are things and values that fit perfectly with our own work and have also enabled us to develop our expertise.
"Good team spirit guarantees a better result"
You shouldn't fear uncertainty – more important is the open and active promotion of matters based on the best available information at any given time. This is how HTJ's Regional Director Samuli Virtala summarizes his motto for leadership.
For Virtala, important things are good team spirit, respecting others, and an open atmosphere seasoned with humor. Having studied to be a Master of Science in Engineering, Virtala has worked in the construction industry first in a construction company founded by his father and in site management roles, then for ten years in consulting firms. In 2021, he was appointed Regional Director of 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 supervision services. In its projects, HTJ acts as a representative, expert and advocate for the property developers. The starting point of its operations is that HTJ has no financial ties to design or contracting organizations. About thirty of the company's more than 200 employees work in Turku.
Virtala says he is a manager who wants to support the expertise around him.
“We have a tremendous amount of expertise in our company. You really shouldn't imagine that you 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 expertise to younger staff. Otherwise, when the veterans eventually retire, the tacit knowledge will disappear with them.
“Since you cannot clone yourself, you have to nurture new talent alongside you. It is definitely possible when people are encouraged to do so.”
Virtala emphasizes that the most important thing in management is to create a good team spirit. It affects job satisfaction, but also guarantees better results. When the spirit is good, schedules are met and operational reliability improves.
“Good leadership is about forming common goals and being able to communicate them to the parties involved. We are often a hub between different operators, so it is precisely our role to get things moving!”
HTJ
Industry: construction management
Founded: 1999
Employees: approximately 200
Turnover: approx. €26 million (2023)