Low cost rehabilitation: Constructors are back to life | in Dinheiro Vivo
The low-cost rehabilitation has made an achievement in only one month: to revive some of the constructors there were in a coma due to the crisis. The impact of the new exceptional rehabilitation regime has simplified the technical requirements for the restoration of buildings with more than 30 years old is already felt in the operation of some constructors, stated Filipe Azevedo, the administrator of Lucios – Engenharia e Construção (responsible for projects like Hotel Intercontinental Palácio das Cardosas and the ongoing rehabilitation of Edifício Castilho in Lisbon). And this regime is attracting investors that had already quit on planned interventions due to their excessive costs.
“Some interventions in historical buildings were almost impractical due to the requirements of new buildings. In business terms, they were not worth it”, explained Filipe Azevedo, who classifies the new law as “the largest contribute to rehabilitation in Portugal.” There were issues like the dimensions of the stairway enclosure, that are not equal for old buildings, which was leading to building a new stairway enclosure or to cutting buildings open for placing elevators.
The truth is that the approval of the new low-cost requalification law itself was enough to attract investors. “We have examples of two potential investors that had already made their surveys for their interventions and that backed out because the costs were really high. And now they are back, asking for a new project assessment”, he stated, explaining that the reduction of costs arising from the new law reaches 40%. Any operation in the historical centre of cities “is easier nowadays, less time consuming and less expensive, which are three key factors to the analysis made by any investor to any operation”.
With more than 30 million of euros gained in 2013, this market segment is worth 60% of Lucios turnover in Portugal (almost 51 million euros last year). Filipe Azevedo admits the tendency is to reinforce these numbers. “With less opportunities among other areas, the rehabilitation will rise”, he noted.
The constructor is expecting a turnover of 54 to 55 million euros this year. The goal is to “maintain the average dimension” of the company at approximately 50 million euros. But, on the other hand, the external markets will rise and will be worth 20 to 25 million dollars at the end of the year against the 7 to 8 million of 2013. Also, despite Lucios’ internationalization process has begun only two years ago, in Mozambique, Filipe Azevedo stated that four to five years from now this market will surpass the Portuguese market.
Internationalization and diversification.
France, Lucios already has a Branch, is another bet. The goal is that in three years this market where the constructor is making their first contract – a rehabilitation in the amount of 12 million euros – is worth 20 to 25 million euros annually. With 290 workers in Portugal and 90 in Mozambique, Lucios is diversifying its destinations. Filipe Azevedo said that he is “especially focused” on Algeria, where they have presented “many proposals”, and Ghana, where it is taking its first steps.
In Portugal? The constructor’s administrator has said that he is “unaware” if Portugal is continuing to offer the opportunities in matter of public works and private investors to keep the operation dimension. And he assumes his difficulty in predicting the events for more than two years. “We have more than 70 million euros of works in our portfolio, which grants us with work for the next 18 months. I would never have predicted this only half year ago. For the last year and a half, we have never gone beyond ten to 12 months of work granted”, he noted. The future of Lucios is not just about construction. Filipe Azevedo has recognized that “The growth in areas other than civil construction is essential, hence our investment in business diversification”. The “opportunities linked to tourism in Portugal” are being analysed, but our most recent focus is the construction of a bottled water factory in Mozambique that will be inaugurated in June.
The investment of 3 million dollars results from a partnership with more four partners. That is why Filipe Azevedo is not going into details, namely concerning the water brand. Instead, he highlights that the new factory will locate 50 kms from Maputo and will allow the creation of about forty new jobs.
