\u00deorvaldur Gissurarson started working in the construction industry 26 years ago, then 22 years old. Since then, he has built numerous structures and buildings, large and small. He has now embarked on one of the most difficult and ambitious projects of his career: the construction of Hafnartorgsreit.<\/p>\n
“I started in 1990. Then we were two who founded a company with two empty hands. I was then in a master’s degree in carpentry, 22 years old, and only had the hammer in my hand. We started by taking on small projects and then bought a plot of land to produce apartments and sell, “says \u00deorvaldur. Four years later, they parted ways and \u00deorvaldur continued his studies in business. However, he continued to operate along the course. “The business grew and prospered and the course was on the back burner. In 1998, I founded \u00deG-verk, which took over the projects and operations that had hitherto been on my own ID number. This had then become a fairly extensive operation without him being in a separate company.<\/p>\n
Own works and tender works a good mix<\/strong><\/p>\n “In 1998, I made a big deal with Orkuveita Reykjav\u00edkur, or Hituveita Reykjav\u00edkur, as the company was then called, in Nesjavellir. It was my biggest tender until then. In the future, the company grew very fast, both the contractor and the work for his own account. \u201d\u00deorvaldur says that the growth has been very steady and steady from 1998 to 2008. He says the contractor has usually been about half against his own work.<\/p>\n “It is a mixture that suited us very well. The tender works with a safe and predictable cash flow and then the other half where the income came irregularly. In this way, it was possible to optimize loan financing and risk, and this plays well together in these proportions. It was therefore possible to get more scope for the operation in this way, rather than concentrating on either branch alone. \u201d\u00deorvaldur says that he does not take on bids for everyone. “I took the policy early on to only carry out projects for public bodies and larger companies. We generally do not work for others. We do not enter into a construction contract unless we consider it risk-free in terms of default. We have almost never lost money due to default or customers’ payment difficulties. ”<\/p>\n \u00deG-verk prospered well and the operation became more extensive with each year from 1998 until the collapse in 2008.<\/p>\n The collapse hit the construction industry hard<\/strong><\/p>\n “The collapse was a big shock, but in such a way that we managed to take care of it. I have always taken care to have a high equity position in terms of debt ratio and in itself with relatively little risk in that context. It helped us when this catastrophe hit. The company also had fairly good funds and a lot of unencumbered assets. All operating assets were unencumbered and we were able to use them for settlement. \u201dHe says that we have had difficult times. “All housing demand disappeared completely. After all, we put all the housing projects on the shelf. It helped us that at the beginning of 2008 we decided not to start a new housing project. I saw that there were some bad signs in the air and when the collapse happened, we had completed all the housing projects and had sold most of them. \u201dHe says that the company did not own any semi-built apartments at that time. “That situation worked out well for us. We had a large commercial building at Ur\u00f0arhvarf under construction and it was the heaviest of our projects. We also had construction contracts with public bodies where the works were stopped because the buyers negotiated with us so that the works were put on hold. In a very short time, the company’s operations almost stopped. \u201dHe says that this has hit the staff hard.<\/p>\n “The number of employees went down from 200 to 30 in just a few months. A huge number of employees had to be laid off. We were only looking for key employees, but we had to lay off a lot of people we missed a lot. These were pure and simple disasters. The construction sector fared very badly out of all this. This happened so fast that it can best be compared to emergency braking. The sector actually stopped overnight. It took us a very long time. ”<\/p>\n \u00deorvaldur says that the company has had minimum operations for the next four years. “In 2013, we will start a large housing project in Stakkholt. It was one of the first things that started from scratch, design and construction. ”<\/p>\n He says that the activities that the company had set up in the Faroe Islands and Norway have softened the blow. People and equipment were sent there and the projects generated income for the company. \u00deorvaldur says that the consequences of the collapse were serious for \u00deG-verk.<\/p>\n The wheels began to turn again<\/strong><\/p>\n \u00deorvaldur says that the Stakkholt project has been successful and the market has welcomed it. “We built a lot of small apartments there, which the market welcomed at that time. There was a shortage of them. ”<\/p>\n He says that things have gone very well since the construction started again. “There has been steady growth and the years 2013, 2014 and 2015 turned out to be good years. This year is also very good and we have come to the place we want to be now. We have 4-5 large projects running at the same time and that suits us well considering how the company is set up and its form of operation is ensured for the next two to three years. It is unusual in this activity to see so far in the future. During this period, our turnover will be approximately ISK 10 billion a year. It is only beyond what was before the crash. ”<\/p>\n \u00deorvaldur says that the company has about two hundred employees on its payroll. “We then use the services of subcontractors significantly. Even more than other companies in the business. All in all, there are about 4-500 people working for the company. We have project managers, carpenters and construction workers on our payroll. Other work components such as masonry, electricity, plumbing and paint are mostly purchased work from us that we outsource. ”<\/p>\n He says they have not used temporary staffing as many in the industry do because it does not suit them.<\/p>\n “We have managed to man our projects without using staffing services. It has been successful to get staff and we consider ourselves to have extremely qualified and good staff. Many of the people we were forced to lay off have come back to us which is very satisfying and a number of good people have joined the group. \u201c<\/p>\n Lack of recruitment in industries<\/strong><\/p>\n \u00deorvaldur says that there is little recruitment in industries. “It is noticeable that there is little recruitment in some industries, such as the masonry class, and we see in subcontractors that the proportion of foreign labor has in many cases become high. This is one sign that recruitment is not enough in this country. There has been a great emphasis on long-term education in the school system and the Confederation of Icelandic Industries and the business community have pointed out that more emphasis needs to be placed on vocational education because it has been overshadowed, not least in the good years before the collapse. The value of vocational education has been proven and proven well in recent years and indeed at all times. ”<\/p>\n Intolerable circle with building regulations<\/strong><\/p>\n \u00deorvaldur says that the price of apartments does not only depend on construction costs. “There were considerable changes in 2012 when a new building regulation came into force, which led to both an increase in complexity and a huge increase in construction costs. Since then, work has been underway to unwind it with four new versions. \u201dHe says that housing prices are mainly determined by four factors. “First and foremost land prices, public fees, net construction costs and then financing costs. Land prices and public fees, such as street construction fees and building permit fees that accompany new construction, play a large part in housing prices at any given time. When it comes to lowering house prices, the focus is mainly on construction costs, but in that discussion the role of land prices and public fees and interest rates is forgotten. These items usually amount to 25-35% of the cost of building residential housing.<\/p>\n If you just want to lower housing prices based on construction costs alone, a lot needs to happen if the other factors do not change at the same time. \u201d\u00deorvaldur says that in the discussion, people need to put these factors in context.<\/p>\n Concentration of settlements was a saving word<\/strong><\/p>\n “It is positive that there is a consolidation plan in Reykjav\u00edk and there are quite a lot of projects that fall under the consolidation of settlements. I think it is very positive and it is socially viable. There has been talk of consolidating settlements for 10 to 15 years. But it is not until recent years that something has been done about it. Until then, it was a kind of saving word or a fashion phrase with little content, “he says. Now it has changed. In Reykjav\u00edk, the new construction area is primarily in the \u00dalfarsfell area. “But there is a lot in the water in these matters. Transformation of H\u00f6f\u00f0ahverfi into a residential area, Vogabygg\u00f0in and more. These are big projects, but it may take an unnecessarily long time to get this done. The system is heavy, the planning system in municipalities, for example, is very time-consuming and very cumbersome. This is often the case with cleaning projects. It is therefore strange to listen to the discussion that there are not enough building plots and apartments in production when a lot of projects are in progress, but they want to get stuck in the system for a long time. I am not referring to the City of Reykjav\u00edk specifically rather than other municipalities. ”<\/p>\n He says there is no reason to talk about a shortage of plots. “I can not say that it is possible to talk about a lack of plots. There have been plenty of building plots. On the other hand, when we talk about the lack of housing production, we are talking about apartments in the lowest price category, small apartments. What is lacking there is that the zoning plan provides for small and economical apartments. \u201dHe does not say that there is a sufficient supply of them.<\/p>\n “The zoning of plots for apartment buildings usually assumes rather large apartments, and the pricing of the plots, whether in the case of municipalities or private parties, takes into account building square meters, so the possibility of building small flats disappears as a result. It will be unwise for business reasons to produce small, affordable apartments because the cost of land per apartment unit will be too high and buyers will not be willing to include it in the housing price. Municipalities have often been reluctant to change the structure so that the number of apartments is increased and they are kept smaller, and then it is not possible to meet the wishes of the market. ”<\/p>\n He does not say this in unison. “We are building apartments in the Bryggjuhverfi district by Grafarvogur. There are about 300 residential projects. The first phase has come a long way, which is 185 apartments. We have been successful in establishing small apartments that fit well into these wishes of the market. These are apartments in the range of 55-90 square meters. We are producing very good apartments, well-designed and high-quality houses at good prices. Co-operation has been successful with the planning authorities in making changes and increasing the number of flats without increasing the total building volume. \u201dHe says this shows that if the parties work together towards this goal, it is possible to produce flats that are acceptable and in accordance with the market calls for. He says building regulations need to allow for this, the municipality needs to be willing to work with parties and the land price needs to take this into account as well as public fees.<\/p>\n “It is intolerable for the construction industry and the market, it is the actual home buyers, to have to live with such magnificent changes being made to the regulation as was the case in 2012, without doing so in consultation with all parties. This was run through and people have to adapt in one go. For the next three years, expect this to be unwrapped in small doses. This is neither decent nor acceptable. ”<\/p>\n An ambitious project at Hafnartorg<\/strong><\/p>\n \u00deorvaldur says that \u00deG-verk has recently been involved in the project at Hafnartorg in the center of Reykjav\u00edk. “It is one of our most exciting projects and that is what we are focusing on at the moment. It is in the heart of the city center and in the best place imaginable. We do that project on our own account. Many people are familiar with the field, there were various exchanges of views about the construction and protection of an old harbor that was there and more. We came to this project last spring when we bought the company that was the site owner and had developed the project. We have since worked on preparation and planning and finishing the design. Now it’s done. The appearance of the houses and the area will be broadly as previously announced. ”<\/p>\n He says there will be a combination of shops, offices and apartments. “This will be a large and ambitious settlement. Above ground there will be about 22,000 square meters and then a considerable amount of construction underground. There are floods and tides and there are various design and construction techniques in parallel that need to be considered. This is primarily a narrow downtown project and a lot is being built on a small business area. We are going to build this fast and take good care of it. Although we have participated in many and prominent projects over the years, this is probably the most prominent and one of the most fun projects to participate in and carry out. ”<\/p>\n Has built more than 1,200 apartments<\/strong><\/p>\n \u00deG-verk has built numerous mansions, both as a contractor and for its own account. There, e.g. Phases 1 and 2 of the Hellisheidi Geothermal Power Plant, OR’s headquarters, Morgunbla\u00f0i\u00f0’s printing plant in H\u00e1degism\u00f3ir, Alvogen’s biotechnology and office building and a number of other projects, have more than 1,200 apartments run by the company from the beginning. on behalf of the company close to half a million. ”<\/p>\n He says the company’s operating results are and have been well acceptable. “For the past 20 years, we have had an approximately 12-15% EBITDA ratio of turnover, except for those years around the collapse. In recent years, we have managed to get back to that place. It is one of our operational goals each year to achieve this margin ratio “.<\/p>\n Optimistic about the near future<\/strong><\/p>\n \u00deorvaldur says he is optimistic about the economy and the construction industry. “The sector is very much connected to the size of the economy. It first shrinks when the economy blows and is the last to recover when other conditions improve. I think there are good prospects in the maps. After going through these years after the crash, you are more careful than before and I think that is good. \u201dHe says lessons can be learned from the crash. “I think the government needs to be careful and careful in the whole government of the country. It is now clearly being done. Monetary policy is more constrained. There is little about major public works. There is an expansion in the construction industry and then the public sector has to keep up with the practical construction work on its roads. Major projects should be kept until the effects of expansion begin to diminish. If the cards are held correctly in this, I like the next three to five years. ”<\/p>\n After a boom comes a downturn<\/strong><\/p>\n But he says not to fall asleep on the guard. “There are all kinds of problems around us. There are problems in the euro area and there are problems in the economies of large countries and we will not be an island in that respect if shocks hit the world. Those are the biggest challenges. We must also not forget that the Icelandic economy is volatile. There is a boom now, large wage and purchasing power increases, there are increases in the housing market. However, there is low inflation that benefits everyone. The story goes, however, that the fluctuations are considerable in the economy and after an upswing comes a downturn. It’s just a question of when we get to know her. If the paddles are held correctly, it can be softened. Fluctuations do not have to be so strong if the tools are used to soften them. ”<\/p>\n The key is who is producing an apartment<\/strong><\/p>\n “We have found it a bit strange that when people invest in a new apartment, which is usually their biggest investment in life, buyers seem to have little idea who the producer and seller of the apartment is. Sometimes it seems to buyers that shopping is less important than when buying a TV or coffee machine. It does not occur to anyone to buy a car from a manufacturer that no one knows about. But it’s a bit like that in the apartments. People go and buy an apartment and it does not seem to matter who produced it and guarantees that the buyer gets what he paid for. It’s even as if people think they are buying an apartment from a real estate agent, rather than the one who produces and sells the apartment. “<\/p>\n","protected":false},"excerpt":{"rendered":" \u00deorvaldur Gissurarson started working in the construction industry 26 years ago, then 22 years old. Since then, he has built numerous structures and buildings, large and small. He has now embarked on one of the most difficult and ambitious projects of his career: the construction of Hafnartorgsreit. “I started in 1990. 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