How to do business in the construction sector in Italy

On Tuesday, February 21, students of MISA, the Master in Imprenditorialità e Strategia, had the chance to hear from a unique guest, Marco Grillo, CEO of AbitareIn. He shared his insight with students in the Finance course taught by Alessia Bezzecchi, Associate Professor of Practice at SDA Bocconi School of Management. It was the second time he spoke to students of the program, following last year’s success.

AbitareIn is a company in the construction industry. It saw the real estate crisis as an opportunity, entered the stock market in 2016 in the Euronext Growth Milan segment, and today boasts a pipeline of more than 20 projects in city of Milan. It is a success story in one of the most complex markets.

“The life cycle of a project in Milan is about five years," Marco says, "from when we complete the preliminary to buy the property to when we hand over the keys to the client. In a business that lasts that long there are so many uncertainties. The construction sector has a very low profit margin in Italy, we need to focus on economies of scale, growth, and efficiency, and it is important to identify the components of the supply chain – which ones should be integrated and which ones outsourced.”

His words reveal the need to industrialize as much as possible and implement technology as an enabler of efficiency: "An entrepreneur who wants to make their business scalable should invest in organization and technology today because tomorrow this capital will return as an element of efficiency and scalability.”

Another important issue for the industry is sustainability: "It is no longer just a matter of communication," Marco says, "sustainability is a key element in raising capital; it does not increase one's business, because at the moment the market is not evolved enough yet to pay more for sustainable solutions, but for the company, it is an investment and it is important to know how to exploit it.” This is a recurring theme in the MISA Master's program. Participants are asked to navigate business transformation by paying particular attention to the sustainability of their business.

"Understanding what the dynamics and size of the target market are is one of the most important aspects of the business," he says. "In our industry, the first buying driver is positive demographics, and we are fortunate to be in Milan, a city that attracts young talent and workers, but not only that. There is the replacement market: those who are unhappy with their homes or those who have children and are looking for a new one, and finally, there is the investor market. These are all growing markets, but we expect that sooner or later the crisis will arrive here too

The experience of AbitareIn is a testament to how quickly the environment can change, something that MISA tries to teach every day. Today's entrepreneurs must be able to interpret change and create new solutions through creativity, strategic vision and entrepreneurial spirit if they want to achieve success and, more importantly, maintain it over time.

SDA Bocconi School of Management