Middle classes breathe new life into interior design market

Marius Decusara, general manager of the creative studio Signature M, tells Business Review how the middle classes are helping to revive the Romanian interior design market and how, unlike in the wider sector, it is houses, not apartments, driving the company’s growth – despite the poor caliber of graduates and suppliers it faces.

Anda Sebesi

How would you describe the development of the Romanian interior design market in the past two-three years?

I think that now the market is in growth territory. It reached its most critical point in 2009, mainly due to the crisis in the construction sector, but since then we have started to see a slow but constant increase in this field. I think that now we have reached the same level as in 2005-2006, both in terms of investments and investors.

What is the most dynamic segment of the market and why?

In my opinion, the budget segment can’t be taken into consideration for obvious reasons, while the high-end and luxury segments have always posted similar levels of increase. The rise has been constant, but with fewer investors and large investments.

However the biggest growth in recent years was seen in the mid-market segment, as a result of the returning interest of the middle class – for example, young people buying apartments with two or three rooms through the First House program or families upsizing from apartments to houses in more comfortable areas.

The middle class almost vanished completely after 2009 when the level of investments in interior design fell close to zero. But it gradually started to recover over the following years through to 2014, when we witnessed clearly the return of investors from this class.

However, let’s not forget the retail sector, where the mid- and high-end segments saw a constant flow of investors eager to make their mark on the Romanian market despite the economic crisis.

For what types of properties (apartments, studios, houses, new or old homes) has demand for interior design posted the biggest increase?

Because of the rise in demand from middle class consumers, the biggest demand was for new houses, mainly in new residential districts. It came from young buyers who either wanted to move into their first home or upgraded from apartments with two or three rooms to the more generous space and garden that a house can offer.

But although for us, the house segment has increased in recent years, we think that overall, demand for new apartments with two or three rooms has risen the fastest nationwide.

Where are most of your projects?

In the past two years, most of them (70 percent) have been developed in Bucharest and its neighborhoods (Pipera, Chitila, Domnesti, etc). But we also have projects in Pitesti, Ploiesti, Buzau, Brasov and Timisoara which make up 25 percent of the total.

We were also involved in a project in Lyon, France, last year and now we are in the design phase for another one in Innsbruk, Austria. These account for the remaining 5 percent of our total number of projects.

How different are clients from Bucharest from those elsewhere in the country?

Clients from outside Bucharest are in general originally from Bucharest too, individuals who chose to escape the big city. I think that the only difference is the teams of constructors that work on our projects (if the client doesn’t want to work with the teams that we recommend). Regardless of the client, the work designing or supervising the site is the same.

What types of clients do you have in your portfolio?

Most of our residential projects are for individuals. There is an even split between Romanians and international clients looking to relocate to Romania.

On the retail segment only 10 percent of our customers are Romanians, with only three projects being done for Romanian in the last two years. The rest are international clients or people who live here but are foreigners.

What size projects do you manage and how many do you develop annually?

We are involved both in the retail and residential segments. We are working on a hotel in Sinaia and a pension in Mamaia, both of which will be completed next year. The number of projects we are involved in varies from one year to another but it is an average of 13-14 a year.

What is the average price of interior design services?

Prices vary depending on the type of the project (residential or retail) and the level of involvement that customers want. We have four price points: for residential, EUR 13/sqm (without site supervisory services) and EUR 16/sqm (with them). For retail, the price points are about EUR 15/sqm (without site supervisory services) or EUR 19/sqm (with them).

How do you think the interior design market will develop and what will influence its progress?

The market is on the rise now and if we look at the construction sector in Romania we can see an increase in both investments and investors in all the large cities. Slowly and surely this market is overcoming the crisis and this will bring new opportunities and investments in interior design.

In addition we have noticed an increase in the number of middle-class individual investors returning to the decor market and looking for professional and competitive companies able to offer solutions for their projects.

What are the main challenges that the local interior design market is facing now?

The first and most important problem is that both Romanian and foreign suppliers are unreliable. Some 70 percent of both local and external suppliers have a “take it or leave it” attitude.

Second is the poor education level of new graduates. They are totally unprepared for our market and treat every opportunity with an acute lack of interest.

Third is the misinformation of many beneficiaries who don’t know what interior design means, in terms of what they should get and expect. We have many customers that expect us to make them only a 3D proposal and then they are surprised when they see how much they get – from the plans and details of that proposition to price proposals for each object and our high level of involvement.

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