high-tech and aesthetically perfect workspaces

In the New Realities: Pridex

29 March 2022
How does the fit-out market change in Russia and which companies will create the demand for office real estate?
  • Dmitry Vishnyakov

    Managing Director of Pridex

Name the main challenges facing you today in the new situation.

Today, our main task is the successful implementation of current projects. Maintaining the pace of work, providing sites with required materials and equipment, finding alternative solutions and suppliers if necessary — all those activities that will help to level the consequences of the crisis for our customers.

It is important to understand that in conditions of high volatility of the ruble, logistical problems and closed borders, even the everyday activity of the general contractor in the fit-out sector becomes a challenge, as it requires significantly more resources to fulfill common tasks.

Of course, the planning horizons are significantly limited, which directly affected the activities of many potential customers. Almost the entire market, except for long-term projects of large Russian companies, is put on hold. In this regard, in the process of selecting a fit-out contractor, confidence and reliability will come to the foreground; the client will prefer those partners with whom there is already a proven experience in implementing joint projects.

What new Russian (China, other countries) tenants and from which segments can or will be able to create new demand?

The situation is developing in such a way that the main demand for high-quality office interiors will come from companies with state participation — first of all, manufacturing. This trend has been taking shape over the past five years, and the possible departure of foreign companies from the Russian market will only accelerate its development.

The specifics of such clients are large portfolios of old-fashioned facilities that require comprehensive modernization, which is especially relevant in conditions of competition for high-quality personnel. Many state corporations implement large-scale programs related to the construction of new offices, which were planned in advance and aimed at the medium-term horizon.

Over the past few years, state-owned companies have closely examined the topic of "office as an image and HR tool", analyzed successful cases, developed their own set of requirements for office real estate modernization projects, becoming a qualified consumer of fit-out services.

At same time, a significant share of demand will continue to be formed at the expense of IT companies, large BTS projects of which are in progress.

What new steps are you taking in your activities on current projects?

Our business principles require the early elaboration of purchase plans for long-delivered parts for each project. This document is one of the fundamental in the preparation of the activity schedule as a whole. In the framework of ongoing projects, a risk audit is carried out, during which we assess the situation all-around and, if necessary, offer customers alternative solutions.

If we consider the longer planning horizon, then our actions are aimed at:

  • Expansion of partnership with Chinese suppliers, which now account for about 40% of supplies of component parts for office interiors. Already, intensive searches are underway for suppliers on the most problematic positions: tile carpetings, ceiling systems, electrical lighting and elements of smart office infrastructure;
  • support of Russian manufacture. Under the new conditions, domestic suppliers of finishing materials and engineering equipment become more competitive (primarily due to the weakening of the ruble) and obtain additional space for growth.
Динамика стоимости строительных материалов в 2022

In which segments of the construction and finishing market do you successfully work with Russian/country-specific manufacturers?

Almost the entire range of base materials used at our facilities has been produced in Russia. Among the manufacturers there are both representative offices of international corporations and large Russian business. Under the new conditions, this segment is most stable.

In addition, the positions of Russian manufacturers in the segment of false floors, the manufacture of which was successfully established in the country after the crisis of 2014, as well as in the segments of lighting equipment, ventilation systems, porcelain stoneware, decor elements and in-built furniture, are quite competitive.

Which directions are still difficult to fill in with import substitution?

Among the most problematic areas are equipment for smart office infrastructure: server commutators, video communication systems and multimedia. These are complex and new products in the market, in which the software component plays an important role. Such solutions are very difficult to copy, which significantly limits the possibility of cheap analogues in the near future.

There is also no fully-featured alternative to European electrical equipment, pumping equipment, carpet and decorative materials, construction chemistry.

Difficult-to-replace positions combine a high level of patent protection, quality of products, the need for purpose-built equipment and a high production culture.

Are there opportunities or examples to attract manufacturers and suppliers from non-European markets?

The possibility of using equipment and materials produced in Asia and the Far East exists. In particular, we are working on options for the supply of HVAC equipment from China and are already cooperating with manufacturers of components for structured cabling and access control systems, multimedia systems and video surveillance. The Chinese market is ready to offer a rather wide range of finishing materials: stoneware tiles, porcelain, mosaics, suspended decorative ceilings.

The manufacturers of plumbing devices and metal products (ceilings and facades) from Turkey, as well as suppliers of natural stone and ceramic tiles from India are also in the field of view of Russian fit-out contractors.

Nevertheless, the introduction of new products to the Russian market is a rather long process that requires substantial investments. The need to certify and build reliable logistical channels is unlikely to quickly replace European manufacturers familiar to our market. The successful implementation of the import reorientation program will clearly require the assistance of legislators. It is essential that these initiatives do not go to the detriment of the Russian consumer and help maintain high quality standards for equipment and materials.

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