Quality Promotion
Interview with Claudio de Albertis, president of ance – the national association of constructors
Carlotta Oddone
Left: Claudio de Albertis, right: Rome, Residential area at Tor Bella Monaca, project Stefano Cardeschi, photo Andrea Jemolo
CO: This is a period of intense property development in Italian cities: there is a lot of building work going on. What are the main projects?
CdA. There are many important projects under way in Italy. Major urban transformation initiatives have been implemented in Milan, Turin, Bologna and Rome.
However these are individual, separate projects: what we really need is to change the way we look at our cities, to make them centres for creativity, driving development and innovation once more. This is why ANCE is proposing bringing in a special objective-based law for cities: a way of raising awareness of the importance of urban issues, but also a practical tool for speeding up the decision-making process which governs the rehabilitation of our cities.
What we really need is to change the way we look at our cities, to make them centres for creativity, driving development and innovation once more
Alongside the big “symbolic” city projects, we need to guarantee a high quality of building throughout the country, designing and implementing a well-defined fabric of infrastructures and developments, to respond to current demands, not only in terms of housing, but also to address the needs of businesses and institutions, which are increasingly taking into account the context of building work, urban and environmental quality, the efficiency of transport infrastructures and safety.
CO: What do you mean by quality in the property field and what factors are involved in improving it?
CdA. Quality in property means how supply responds to demand, to what is required.
The market has been demand-led for quite a while.
Urban planning must play a strategic role in this context.
The changes in the market entail greater risks for property operations which do not respond to the demands of the sector, with the risk of creating property that the market does not require.
This is why urban planning must be based on market awareness, in order to regulate it effectively, and ensure that what is on offer responds to the new market demands.
The new norms on planning regulations indicate what is required to achieve overall project quality and close the gap between the speed of development of a city and the time required to transform its urban environment.
Internal competition in terms of quality dictates the rationalization of operations, under the “design and build” approach. Aggregation of processes is the only way to tackle the issues involved in a complex project, in order to be able to see the project through from its conception, to urban planning to implementation.
Tower Francoforte Westhafin Tower complex, project Schneider + Schumacher, photo Krase Waltroud
CO. With the growing importance of finance in the building industry, the role of the private sector in the field of public works, and the new norms on property investment funds, construction firms and developers are being forced to address a complex reorganization of the sector. Do you think this process will also help improve product quality?
CdA. I believe in the natural selection processes of the market.
I am also convinced that finance is playing a positive role in selecting development projects to fund, opting for quality of work and management.
Property funds are one positive example: this type of fund is leading the market to create developments in line with European standards.
But in this extremely positive period for the property sector there are also many “hit and run” developers, often backed by the banks themselves. These operators are only interested in property trading with a high added value, which guarantee good short term returns.
Development promoters, on the other hand, take an entirely different approach. Our work generates genuine value for the area, with developments which are increasingly aimed at providing the best response to demand, with in-context infrastructures which aim to improve the quality of life.
Development promoters involved in this type of operation are finding it increasingly difficult to obtain funding, especially for small and medium-sized developments, from 1 to 50 million Euro. There are no intermediaries to deal with when looking for and setting up the most suitable forms of funding for the property operations that firms wish to undertake.
I believe that credit and finance should be driving property development processes and local improvements, rather than representing an often insurmountable obstacle which limits the growth of this sector – a dynamic sector with a positive outlook for the future.
I would also like to highlight the constant growth of the project financing market. Both local government and private investors are very interested in this approach, but this interest is not reflected in the response of the financial world, which continues, for example, to request that developers offer personal collateral for loans, instead of carefully assessing the value of the project and the cash flow generated by the investment, which represents a genuine guarantee for loan repayment.
Residential complex of Salsburg, project Max Rieder, Wolfgung Tschapeller, Hans Peter Worndl; photo Paul Ott; right: Tiscali headquaters at Sa Illetta, project Ara Associati, photo Mario Carrieri & Dona Tore
CO: Do you think that the Italian market is ready to open up more to foreign companies and investors?
CdA: Foreign investors have been present on the Italian property market for some years.
Scenari immobiliari (Independant Institute for Analysis and Research) estimates that between 2001 and 2004 foreign property investments to the value of 5.4 billion Euro were made.
At present foreign companies are above all interested in large-scale operations, opting for partnerships with local firms which know the markets and the area better than they do.
There are however a number of foreign funds which are diversifying their investments in a range of different contexts, from Rome to Milan.
We are extremely interested in these new opportunities to work with foreign companies, as they represent a way of interfacing with other contexts and developing new forms of expertise.
But to be ready for these new opportunities we need to be more willing to address risk, and strengthen current relations with banks, which limit the availability of risk capital.
We must not underestimate the fact that from the Italian companies’ point of view, opening up to foreign players entails establishing complex organizations with ongoing, stable operations which will preserve and handle Italian know-how.
CO: Are there any European examples of excellence in the sector of quality promotion that could be an example for our market?
CdA: There are many examples of excellence in property development in Europe.
In my view, abroad it is easier to bring on innovative projects. Outside Italy local governments are more dynamic, coming up with advanced models for development based on solid strategy. Which is exactly what is lacking here.
One example: Barcelona was shortlisted for “City of Culture 2004” along with Genoa. As we know, it was not successful, but the authorities decided to go ahead with the projects that had been drawn up, to the point of creating a whole new district, Forum 2004, involving leading architects and establishing a new point of reference. This is a strong message which also reached foreign investors.
As proof of this, a number of foreign companies, struck by the dynamism of this area, have already decided to locate offices there.
If the same thing had happened here, would we have had the courage and determination to complete the projects?
