Kaamos Construction expands its portfolio beyond Kaamos Real Estate developments
Greater control over costs and schedules, early contractor involvement, faster decision-making and shared responsibility for the outcome can reduce risk and make project delivery more predictable. These are among the reasons why many large real estate developers in Latvia and elsewhere choose to entrust construction to a company within their own group. The Kaamos Group has adopted this model as well: Kaamos Construction was established in Latvia as the Group’s construction arm and has been delivering its real estate developments for several years. Having built up experience across a range of projects, including technically complex developments, the company is now increasingly expanding into the third-party market, says Ingus Baumanis, Head of Kaamos Construction. Projects for external clients currently account for up to 20% of the company’s total construction volume, and the aim is to increase this share in the future.
Baumanis says the benefits of an integrated developer-contractor model are most apparent during project preparation. By becoming involved at the design stage, the contractor can assess the constructability, cost and potential impact on the construction schedule of the proposed solutions at an early stage.
“Approximately 80% of the materials and technical solutions are selected during the design phase. When the contractor is involved at this stage, we can assess in good time how a particular solution will be built, what it will cost and how it will affect the construction schedule. Individual interior finishing details may still be refined during construction, but the key decisions have already been made,” Baumanis explains.
When a contractor is appointed only after the design has been completed, changes to the selected materials or technical solutions may become necessary during construction. Such changes require additional time and can also increase the overall cost of the project.
“Two of the most important aspects of any project are setting a realistic construction schedule and remaining within budget. When the developer and contractor operate within the same group, both have access to the same information and a shared interest in finding solutions as quickly as possible,” he says.
Savings can be reinvested in project quality
Another important difference lies in how savings achieved during construction are used. The shared objective of the Group companies is not the financial outcome of an individual construction contract, but the delivery of a high-quality and commercially competitive real estate development.
“If we achieve savings through procurement, we can reinvest them in improving the project. Our aim is not to reduce costs at the expense of quality, because the developer and contractor share responsibility for the outcome,” Baumanis emphasises.
At the same time, he acknowledges that working with an in-house construction company does not necessarily guarantee the lowest possible construction price. When there is a shortage of projects in the market, an external contractor may be prepared to accept a contract with a minimal margin to retain its team and maintain its workload. The principal benefit of the integrated model is therefore not always the lowest initial price, but stronger process management, earlier identification of risks and shared accountability.
Looking beyond the handover
Operating within the same group as a real estate developer allows the contractor to follow the entire project lifecycle—from design and construction to building operation and warranty matters. This experience helps the company assess how earlier decisions perform in practice and apply the lessons learned to future developments.
“An external contractor’s role is to construct the building, hand it over to the client and fulfil its warranty obligations. In our case, the responsibilities of the developer and contractor are combined within the Group, and the homebuyer remains the central consideration for both,” Baumanis says.
Consequently, the choice of materials and technical solutions is based not only on initial construction costs, but also on energy efficiency, durability and the building’s future maintenance costs. As one example, Baumanis points to the use of precast reinforced-concrete structures and durable façade solutions that may be simpler and less costly to refurbish after ten or fifteen years.
“A material cannot be assessed solely based on its price at the time of construction. We also need to consider what will happen to the building in ten years, how complex any repairs will be and how much they will cost. The benefits of energy efficiency, meanwhile, are directly reflected in occupants’ monthly utility bills,” he notes.
Seeking long-term partners in the third-party market
Alongside the construction of Kaamos Group developments, Kaamos Construction has also been delivering projects for external clients for the past two years and intends to expand this area of its business. When the Group’s own developments do not use all the available construction capacity, the company can allocate it to third-party projects. This helps maintain a balanced workload, broaden the company’s experience across different construction segments and establish relationships with new partners.
Baumanis stresses, however, that the company carefully assesses both prospective projects and potential partners. The quality of its work on third-party projects also affects the reputation of the wider Kaamos Group.
“We do not want to compete in tenders where the lowest price is the only deciding factor. We are interested in projects where the client also values quality, professionalism, adherence to deadlines and the ability to respond quickly when challenges arise,” Baumanis explains.
The company is open to different forms of cooperation and aims to become involved not merely as a contractor carrying out the works, but as a partner capable of helping the client assess technical alternatives, costs and potential risks. Its experience within a real estate development group also enables it to understand the client’s perspective and the project’s broader commercial objectives.
A collaborative culture is becoming a competitive advantage
Baumanis regards cooperation between the parties involved as one of the construction industry’s key challenges. When the client, designer and contractor each focus solely on their own interests and attempt to transfer responsibility to others, decision-making takes longer and project delivery may become more expensive.
“On many projects, the parties are not aligned—each is effectively in a separate boat. Projects move forward much faster when everyone shares the same objective and is prepared to work together. Construction requires more than professional expertise; it also requires the ability to communicate and solve problems jointly,” Baumanis emphasises.
He also links the company’s growth in the third-party market to its ability to establish trusted, long-term relationships. “Our aim is that, after completing one project together, the client will want to work with us again on the next,” Baumanis concludes.
