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2019: The bumper outlook report

Photo by AK¥N Cakiner on Unsplash
Photo by AK¥N Cakiner on Unsplash

It’s the end of the year and time for people to reflect, process and gear up for 2019.

We spoke to an engineer (HFM Asset Management’s Bevan Tyler), a consultant (AECOM’s James Rosenwax), an industry advocate (The Property Council of Australia’s Jane Fitzgerald), a stakeholder engagement professional (ERM’s Kathy Jones) and a couple of architects (Sid Thoo & Warren and Mahoney’s Gavin Kain) to get their views on the year ahead.

The industry advocate

According to Jane Fitzgerald, executive director of The Property Council of Australia, NSW, the first six months of 2019 could be quite interesting with a state election and Federal election.

But Fitzgerald doesn’t think a change of government in NSW will see much change in policy. She’s comfortable in the advocacy role and confident her member’s agenda can be put forward logically.

That confidence probably comes from her background which is heavily dominated by government and politics including gigs such as chief of staff for former police minister Paul Whelan and chief executive of the Trade Union Royal Commission among them.

Big issues such as population are probably a furphy. “You can’t lock the gates” on growth, she says. A new alliance under the banner of “good growth” with various agencies including the Committee for Sydney and social and community housing groups are about opening up the dialogue so that people aren’t surprised.

For now, she says, “I feel like at the moment we are marking time. There’s great work to be done to implement the GSC (Greater Sydney Commission) plans and my feeling is that a lot of the concern you hear about is in fact concern about speeding up those plans.

“The reason things go wrong is that people get surprised when there is going to be a 10-storey apartment when they think it should be a 6-storey. And that comes a lot from the under zoning that Sydney has had.”

“True engagement” will help overcome the political issues, she says. “I certainly don’t think putting the Missing Middle [policy] on hold is a solution.”

The consultant

AECOM’s director of buildings and places, James Rosenwax says he thinks his team of 700 will probably grow by this time next year, but nominates 10 per cent as his safe bet.

The focus right now is on transport-oriented development and he’s “very bullish about the continued investment in Australia, in Sydney, Melbourne and Brisbane in particular. But also Auckland where a light rail is going in.”

The company is also investing in healthcare, education and data centre. The global focus is on aviation and it’s project manager representing the federal government on the Western Sydney Airport.

The other big investment is building information modelling with its cloud-based BIM360 under David Foley’s charge.

He thinks the pipeline of big infrastructure work is about three years at least but potentially longer if immigration levels are maintained at current levels.

Right now, infrastructure is playing catch up with demand, he says.

The big trends emerging in 2019 will be more “hyper mixed use” with commercial, leisure, retail and residential uses in projects.

All around transport. And more flexible.

There will also be bigger movements to modular construction – prefabrication.

An interesting angle the company is working on is lightweight timber structures above buildings that are underutilised in terms of the floor space ratios.

“Optimising client assets,” he says. One is underway in Melbourne right now.

“There are lots of opportunities. You don’t have to reskin it and jack it up.”

It’s about saving resources. “You’ve got to be more responsible with resources. Right now there are no restrictions, it’s seemingly endless supply.”

But the day will come, he says.

A change of government to Labor at the federal level will see more support for affordable housing, “which is positive” but there is also bilateral support for mass transport.

Western Sydney is “huge”. “This is the parkland city where 2 million people will be living.”

As for the geopolitical macro risks?

“I’m more comfortable being in Asia Pacific than North America or Europe.”

The architects

The next big frontier for sustainable design, according to Western Australian architect and educator Sid Thoo, is making sure it’s affordable.

“I think there is a belief and misconception that sustainable housing has to be more expensive. But if it‘s integrated into the design from the very beginning, it won’t necessarily be unaffordable. Sustainability has to be affordable in order to be sustainable!”

Key to achieving affordable sustainable buildings is taking a more holistic approach rather just “chasing stars” or “adding more green bling”.

He says a lot of money can sometimes be spent trying to achieve high star ratings just for the sake of it, or on expensive upgrades such as high performance windows just to get the building to achieve minimum compliance. Often it’s easy to overlook the “low hanging fruit” opportunities, such as getting the orientation right, shading the building appropriately and optimising window to floor area ratios.

Thoo says one of the big changes in the world of sustainable architecture is that the focus has shifted to energy.

“Political uncertainty and the absence of federal leadership on energy policy is further highlighting concerns relating to the generation, supply and ever rising cost of electricity.”

He sees these issues translating into clients demanding more energy efficient buildings, as well as further accelerating the uptake of small-scale renewable energy systems such as solar PV coupled with battery storage.

Something else Thoo expects to see more of next year is greater interest in cooperative housing and alternative housing models, particularly following the buzz created by the Nightingale Housing model.

And on the year that was? Thoo says there was high demand for his services as an architect, educator and consultant, compared to some of his peers.

“I think that it is because people are placing more importance on quality design, which includes sustainability; I’ve always marketed myself as a sustainable architect, not just playing lip service.”

“People are placing increasing value on building more sustainably.”
Managing principal of Warren and Mahoney’s Sydney office Gavin Kain says sustainability is back in vogue after a hiatus post-GFC.

“Sustainability has taken a secondary role in more recent years. Prior to the GFC it was the number one issue in our industry and then the tighter economic context set back this key component of our work,” he says.

“However, we have noted it is back on the agenda and that is a good thing.”

Kain says there has “definitely been a change in expectations” regarding sustainability and sees this trend continuing into 2019.

The New Zealand-based firm, which expanded across the Tasman four years ago, will have some have some major projects under construction in Sydney and Melbourne in 2019 “which is always a test as a design studio,” Gavin Kain says.

“Success is in the built outcomes so this year’s efforts come into being next year.”

According to Kain, the biggest trend in architecture at the moment is putting users, and the community, at the heart of the design process.

“We have recognised as a community that we have taken up the broader economic benefits of growth without a full discussion on the associated urban issues that have come with this growth,” he says.

“For us this is an exciting period, one where we are playing a role in shaping our cities for the next generation. This won’t be a passing trend it will be a focus for many years to come.”

Kain is also pleased that governments are investing in cities “after a decade of underinvestment”.

“This is in record levels and is influencing all our projects in some way. We are excited by the broader vision being embraced by governments at all levels and this is empowering us as architects to bring forward bolder ideas.”

The stakeholder engagement business

Kathy Jones recently sold her eponymous company to ERM and with a staff of 70 involved in “stakeholder engagement” on major projects she might be expected to have a good pulse of the market heading into 2019.

According to Jones, there are various schools of thought about how much work is left in the pipeline – is it three years, five or 10?

But right now the perception is that several of the big projects are a mess, we say.

That’s the delivery hump.

“When you do the taxi test or Uber test they says, ‘yes it’s fantastic that the state is moving forward but I’m tired of this on a daily basis of having to wait forever for roadworks and tired of having George Street dug up’.”

“In a way it’s like the government is a victim of its own success.”

There’s also the theory we say that too many people have been promoted too far up the ranks of seniority especially in government and that this lack of experience might account for some of the blunders with major contracts say with the light rail or WestConnex.

Jones is clearly circumspect and prefers to focus on the positive, she says. But it’s true she’s not alone praising the work of revamped transport agencies in NSW and the work of the Victorian government with transport and the removal of level crossings.

In NSW she says, transport has been refocused to some positive placemaking opportunities and in

Victoria where Jones also works there is a sense of stability around the return of the Andrews government in the November state election.

Both Victoria and NSW she says, “are great for a business like mine because they both say what they are going to do and they do it”.

“The Victorian government said it was would have 20 level crossings removed in the first six months. They’ve done that, multiplied by 10.

“And that’s impressive. It’s fantastic to have two such governments in Australia at the same time.”

The engineer and solar 

General manager of engineering consultants HFM Asset Management Bevan Tyler said his 15 year old company works on feasibilities for energy systems for buildings with a big focus on solar.

The big news for 2019 will be the growing demand for solar in commercial he says.

“Our work is in looking at feasibility on a case by case basis. You might think you have a large roofspace but load profile might warrant low or no solar.”

By this he means the way you consume power and matching the size of the system to requirements.

It’s going to be a good year, he says.

The company has fielded a rise in inquiries of between 40-50 per cent in the past 12 months from large and small portfolios of buildings and “moreover from industries that are not traditional risk takers such as aged care hospitality and light industrial.”

Cost of energy is the driver but the demand hasn’t been just for rooftop solar it’s been for arrays on the ground as well.

In WA market constraints for more renewables in the grid are being tested by growing inquiries from engineering and commercial teams to network providers.

“We’re hoping to see some change next year.”

It would lead to more business, absolutely he says.

Another trend he thinks will emerge is the redirection of subsidies from solar to batteries.

His outlook overall? “Definitely positive.”

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