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Future of Lendlease’s DesignMake is under review

Future of Lendlease's DesignMake is under review

It might be premature to think another prefab timber construction facility is about to bite the dust, but the signs aren’t good. This time it’s the much lauded Lendlease owned factory DesignMake at Eastern Creek in western Sydney, which has delivered some of the most high profile timber buildings in Australia.

Lendlease told The Fifth Estate on Tuesday that the company wascurrently reviewing” the operation of its DesignMake manufacturing facility.

“The review, which is examining the most efficient factory operations, in no way diminishes our broader commitment to sustainable and innovative building solutions through the use of CLT and prefabrication,” a spokesperson for the company said.

“In the past two years alone, our in-house expertise has resulted in the successful delivery of five market-leading mass timber buildings.

“Given the review is ongoing, it would be premature to speculate about its outcome.”

It’s pretty much the same review story The Fifth Estate heard from Xlam, which manufactures cross laminated timber about its operations in New Zealand before it wound them back to the point that they would become a distribution centre for products manufactured in Australia. That was in April.

A statement in early May from Xlam said the company’s operations are no longer considered commercially sustainable and that “a new business model” would “usher in a more commercially competitive and sustainable way for the company to supply CLT to the market.”

The news came after the shock collapse of the Strongbuild business in Sydney late last year and the failure of the voluntary administrators to find buyers for the business at Bella Vista as a going concern early this year.

So what’s going on?

First, DesignMake team and Lendlease have no shortage of admirers in timber construction – definitely leadership material.

The company’s DesignMake website says it invests in “smart design and advanced manufacturing processes to make pre-fabricated building components for our customers.”

And it’s done some fabulous buildings, most notably, two CLT buildings in Barangaroo – International House and Daramu House (meaning “tree house” in the local Indigenous language).

DesignMake itself was launched in 2015 – after some high profile starts in CLT construction, most notably Forte Living in Melbourne which it finished in 2012 and Library at the Dock in Melbourne, completed in 2013.

The business was also responsible for 25 King in Brisbane, a ground plus nine-storey tower designed by Bates Smart.

Last year the company delivered the Jordan Springs’ Community Hub. It currently has three engineered timber buildings under construction as part of the Australian National University precinct redevelopment.

Unfortunately, beautiful buildings may not be enough.

Australia might be simply too small and too nervy to see through an exciting new and sustainability challenge. At least without some early trauma. As Christian Criado-Perez from UNSW showed us with his PhD work, this industry too averse to evidence based thinking to take the plunge into new building systems that are proven performers elsewhere, no matter what the science says. Much better to do what the guy down the street just did and what the real estate agent sagely advises.

This goes for architects, engineers and developers alike.

That’s the high view. Down at the business end, it’s simply a case of not enough business to go around and keep the machines and systems churning. It’s also a bad time in the cycle when nerves are frayed from a severe residential downturn and concerns about the broader economy – even though the Reserve Bank and the stock market keep indicating the reverse.

Any industry observer will say the prefab and timber industry boomed so fast it was too much too soon. So easy to say in retrospect. But when the The Fifth Estate visited a prefab conference in Sydney in 2016 the mood was one of unusual excitement. There was talk among the crowd of people dumping their old business and jumping into this new field holus-bolus. The kind of thing older wiser folk perhaps see as a warning sign, evidence based thinking notwithstanding.

Industry observers say if there are issues with Lendlease it’s because this country is so large geographically and so small by relative population and economy. In Europe, where prefab and the CLT industries are doing very well the customers are close the source. Same in the US.

Sources say DesignMake might have absorbed $10 million from the parent company, with a core staff of 15-20 people. It’s understood the factory ramps up to handle big contracts and logically is underutilised in between jobs.

For Lendlease, the subject of a huge “what went wrong” story in The AFR this week, it’s not brilliant news and the official statement is far from a “nothing to see here” fob off.

The “what went wrong” report refers to the mooted sale of the engineering business. (There’s also been talk of a takeover of the company from a Japanese suitor).

But there are many people who are big fans of Lendlease. Despite its often monolithic and highly controlled structure (at least it seems that way), there is widespread approval of its work in major urban regeneration projects such as Barangaroo in Australia and Elephant and Castle in the UK.

With Barangaroo, there were many misgivings about handing such a huge site to a single company: the precinct would be boring; it would fail to have the interesting “fine grain” atmosphere that a somewhat messier development program would have if it were to more closely mimic the organic growth of a city.

But despite everything, take a walk down Barangaroo and you can’t help but be impressed – the place is thriving. Not the least for its ambitious sustainability that extends to social sustainability, something backed by Indigenous “Auntie in Residence” Glenda Merritt at Barangaroo after a Reconciliation Week event at International Towers recently.

Put its successes down to the people, there are so many passionate and highly talented individuals who really want to outperform on sustainabilty (clearly they can’t help if the corporate culture is somewhere less sharing and caring, as the critics in the AFR article say.)

– With Poppy Johnston 

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Comments

5 Responses to “Future of Lendlease’s DesignMake is under review”

  • Very nicely put Tina. Indeed there are several factors that we will have to overcome for more innovative and high performance buildings. Among them, an individual disposition to learn and build our expertise, an organisation that clearly supports evidence-based decisions, and an industry that embraces, expects, and maybe even demands evidence-based practices. For the moment, fear of thinking differently and the easiness of replicating what has always been done often dominates

    • Tina Perinotto says:

      Thanks Christian, we need to get your work out there Christian. And make it stick!

  • Steve Christo says:

    Your comments about ‘… industry too averse … to take the plunge into new building systems’ is bang on the money unfortunately.
    There are myriad of new systems available in europe and america that are superior to bricks and mortar but as a population we seem to be stuck in that 2000 year old mindset.
    As a small humble builder in Sydney, I believe we’ve had it good for a long time here in the land down under, with regards to energy costs. The europeans and americans understand what it means to spend up to a third of your income on heating or cooling your home. I am regularly ridiculed for installing double glazing in my projects with the regular comment being “.. ours is a temperate climate, we don’t need to waste money on that stuff … it doesn’t snow here.”
    But I regularly here people from abroad tell me the houses they’ve stayed in are ‘cold to the bone’.
    If we don’t embrace technology like CLT and make it more mainstream, how are we going to grow as an industry.
    Blessings to Lend Lease and the men and women in management with the vision to continue pursuing the dream of a better building landscape.

  • Dear Tina,
    I don’t think they are closing down. Rather, I think they are most likely streamlining and conducting a study in order to attempt to become more efficient.
    That’s just my guess, but I work for their direct competition, so this is just a guess.
    Hope all is well.
    Jim Murray-Parkes

    • Tina Perinotto says:

      Thanks James, yes we are all hopeful it doesn’t close… those timber buildings Lendlease and others have done are beautiful and bring hope that the future of the built environment can indeed be more kind to nature and us than it has in the past. The point I guess is that road to anything new and fabulous in Australia is fraught with our structural impediments of vast spaces and not enough population to support innovation. Then there is a really annoying habit that Christian Criado-Perez UNSW found in a big indepth survey of developers, architects, engineers and a range of other people in the built environment – a deep-seated aversion to evidence based decision making in property. So not what is proven best in a scientific way but what the guy down the street built last year or what that cool savvy agent said will sell or lease fastest. For an innovative country we are incredibly conservative.

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