Here’s what Govt needs to do to give building sector best shot at survival

1586521329244OPINION: The impact of Covid-19 is incalculable. The immediate impact on physical and psychological health is immense.

Governmental planning has been driven by modelling that predicts mass infections and substantial mortality. Not unreasonably the New Zealand government instituted a countrywide lockdown. The effect has been monumental. Movements stopped, businesses closed, all bets are off.

It is too soon to say whether we are through the worst of it. What can be said is we need to plan for “the morning after”. At some point we need to get back to work, otherwise inevitable recession could metastasise into depression.

Construction is the commercial canary in the economic coal mine. First to tip into decline in a downturn. First to show green shoots of recovery. The reason for this is the industry is driven by cashflow volume rather than percentage earnings. Builders have low reserves and run out of cash quickly in a downturn. But new construction can start relatively quickly with financial resource availability.

“Nice to have” projects, such as Skypath, may have to be put lower on the priority list. Economists and politicians recognise we build our way out of recession. In the decade since the GFC, we have seen continuous sectoral growth. Yet it has taken all those ten years to grow a housing sector that is still yet to match housing demand. Recently we have seen feelers from Government via Mark Binns at Crown Infrastructure Partners (CIP). The request was for “shovel ready” projects Government could potentially invest in as economic stimulus for construction and the wider economy.

However describing projects as “shovel ready” tends to imply a relationship to dirt, clay, excavation and civil engineering type projects – i.e. horizontal infrastructure. Whilst infrastructure investment is generally laudable, this may have relatively limited economic benefit in the current situation.

Infrastructure isn’t synonymous with the entire construction sector. It is one part of an industry comprising three distinct subsectors – horizontal (roads, water etc), vertical (commercial and multi-storey) and residential (housing). The skills and trades in each subsector do not move between them. Residential uses much more labour; horizontal construction much more plant machinery. Vertical construction is somewhere between the two. Horizontal constructors particularly have skills with limited application elsewhere.

If the intention of Government is to restart the economy, focussing only in horizontal construction would be a missed opportunity. Post-pandemic planning for construction should be focussed on maximising employment across the country. In terms of labour utilisation, residential and vertical constructions use vastly more tradies and subcontractors to deliver their outcomes compared to horizontal construction. Typically up to 50 per cent of all expenditures on a vertical or residential project is in the form of direct labour. Materials and other services have further labour costs associated.

Money going into the hands of tradespeople starts immediately at commencement of projects rather than filtering through later. By contrast horizontal construction has typical labour values of 25 per cent to 30 per cent. Stimulus investment in vertical or residential construction can potentially have twice the employment bang per stimulus buck. We need to think beyond “shovel ready” towards “workforce ready”.

Government needs to take balanced investment approach across the three subsectors if employment is a key focus. Identifying and funding vertical and residential projects we can leverage to rapidly mobilise employment opportunities is essential. This implies we may need to defer “nice to have” projects, such as Skypath and light rail, in favour of health, education and social housing investments.

We should be considering the asset condition of health and education infrastructure across New Zealand. All Governments like to make marks by building impressive new buildings. Regrettably they have all neglected prudent asset management as equally essential to the health of the nation. Estimates put the current health capital building programme at $10 billion to $14b. Countrywide backlog maintenance is $4b to $5b.

The well-publicised poor condition of Counties Manukau health facilities is symptomatic. Similarly backlog maintenance for education from preschool to tertiary is likely of comparable magnitude.

Maintenance backlogs could be unleashed immediately when buttons were pressed. Tradies and SMEs would respond without delay. Better yet, most work won’t be tied up with RMA and consenting. “Shovel ready” infrastructure projects are undoubtedly central to post pandemic planning. However they should be seen as part of a wider tapestry of options. Keeping tradies busy now on backlog maintenance of public sector assets would provide a resilient resource that could be transferred to the private sector after recovery.

We’re in the jaws of a systemic crisis. We need to build our way out through targeted investment. Silver bullet infrastructure spends need to be tempered. We need to retain key skills, maximise employment outcomes and enhance resilience in critical assets. Starkly put – Government should decide whether its policy is to maintain construction employment or construction machines.

Dr John Tookey is professor of construction, director of Centre for Urban Built Environment (CUBE-NZ) at AUT University and Dr Tony Lanigan MNZM is director major projects – estates group at AUT, distinguished fellow of Engineering NZ, former director of Infrastructure Auckland, NZTA and Watercare, director (and former chair) of NZ Housing Foundation and a member of the Ministry of Health’s governance group for Christchurch Hospitals’ redevelopment.

Source: Stuff.co.nz

$703m Convention Centre to be ‘world-first’, opening to streets on all sides

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The new $703 million NZ International Convention Centre is said to be a world-first because unlike similar giants in other cities around the world, the huge new convention centre here will be open on all sides. John Coop, principal of Warren and Mahoney which was one of the architects, says: “This will be the first convention centre in the world with no back door – open on all four sides to the street and the city that surrounds its highly urban site, presenting an open face to all who approach.” But developer/owner SkyCity Entertainment Group says it will be much more than just open. It will enhance the rejuvenation of the CBD’s western edge, being a catalyst for more development in Victoria Quarter and Federal St. “Once up and running, it is expected to attract more than 33,000 new international visitors to New Zealand, generating $90 million of economic benefits to New Zealand annually and 800 jobs. The hotel development will create a further 150 jobs,” that business says.

With a total gross floor area of 85,000sq m, the centre is one of the biggest building projects undertaken in Auckland lately.

Project

This will be this country’s largest purpose-built convention centre, able to host meetings for about 3000 people, or one-off events for 4000 in its grand exhibition floor. That new hall alone will be five times larger than the current largest exhibition hall in this country: the existing Convention Centre’s New Zealand Room, in the existing SkyCity property between Albert St and Federal St. That hall is column-free, with a soaring 9m stud, able to be configured into three individual halls, all accessed from the surrounding street network. Theatre and plenary spaces, areas for trade shows, banqueting facilities – this place is set to be a hub of activity, all with extensive city views and near the City Rail Link’s Aotea Station. The project is part of the estimated $6 billion five-year building boom which the national construction pipeline report says is now going on in Auckland.

Horizon Hotel

This new 300-room five-star elliptical-shaped glass-clad hotel is beside TVNZ at the seaward end of the site. SkyCity at one stage considered selling it, well before it was finished, but changed its mind and instead plans to sell the thousands of its underground car parks, maybe to Wilsons or Tournament although no deal is yet announced. The hotel will have an underground gym and porte-cochere or entrance way accessed off Nelson St. It will accommodate guests at conventions as well as other visitors. When this opens, SkyCity will have nearly 1000 beds at three hotels on its Auckland CBD sites.

Laneway

A cut-through pedestrian link between Hobson St and Nelson St, to be lined with retail and dining outlets, flanked by the high dramatic walls of the new hotel and centre, expanding the public entertainment precinct, a nod to the popular Vulcan Lane.

Car Parks

SkyCity has 1960 parks below its Auckland casino/hotel site and another 1327 beneath the convention centre site, giving it control of 3287 spaces.

Art

Two of the largest pieces of public art created in this country will be the centre’s exterior, including 2400sqm of glass and 13,500 terracotta tiles for all to see. Works by New Zealand artists Sara Hughes and Peata Larkin were specially commissioned to span 5760sq m once installed on the outside walls.

  • Sara Hughes has made a glass artwork to cover 2400sq m on the southern or Wellesley St wall. It is 105m long and 1.5m wide, varying in height from 1.2m to 3.6ml. Installation was under way last month. She has used 60 different colour tones, inspired by her upbringing in rural Northland near the Waipoua kauri forest so that the piece reflects the experience of walking through our bush and looking up through a canopy of trees to see the unique light and colour of the forest.
  • Larkin’s terracotta tile wall is 3360sq m: 105m long and about 31m tall, comprising 13,500 tiles. She says she wanted to create an art work “that described the multiple waterways and fertile soil Tāmaki Makaurau (and Aotearoa) possesses, as well as connect strongly and aesthetically to Sara Hughes’ glass work. I wanted to soften the long wall and achieved this by creating an undulated geometric pattern inspired by traditional Maori weaving; a subtle three dimensional presence that would visually change dependent on the angle it was viewed from.” The work will be installed this year at the cut-through dining/restaurant lane way at the TVNZ end of the site.

In the neighbourhood

The NZICC is not the only change in the area. SkyCity is pushing ahead with plans to expand Federal St’s food, drink and entertainment offerings with more outlets around the SkyCity Grand and The Depot, and next year open a new attraction with West Workshop to showcase the All Blacks Experience.

Source:

  • Anne Gibson
  • NZ Herald

International hotel group buys Cathedral Square site for new hotel

cath

A major Japanese hotel and tourism group has bought land in Cathedral Square for just over $7 million to build a big hotel. The 2000sq m vacant property runs from Cathedral Sq to Gloucester St. It is part of the former Press site.  The deal has been called a vote of confidence in Cathedral Square, which has been a slow starter in the rebuild. The project will bring the number of existing and planned hotel rooms in the central city to about 2500. Christchurch lost more than three quarters of its 3700 hotel rooms in the earthquakes.

Former owner Canterbury Property Investments had been struggling to develop their own hotel on the site when the company was approached to sell, said director Miles Yeoman. Confidentiality agreements mean the hotel group’s identity has not yet been disclosed. It is understood to be new to Christchurch and will own, build and run the hotel.  “I understand they are going to move fairly quickly to build a big hotel,” Yeoman said. “We’re disappointed we couldn’t make something work ourselves, but this is great news for Christchurch, and for that part of the Square.”

Noel Gilchrist from commercial real estate firm Colliers, who brokered the deal, said the hotel would be “significant”, and would cover the whole site. Council rules mean the building could be up to 28 metres high. “They are working on the hotel plans. They like the site and it will be large-scale,” he expected the hotel would be “at least five-star”. The sale was settled on Wednesday. The $7.1m price was nearly double the $3.598m Yeoman’s company, Canterbury Property Investments, paid for the land in 2014.

The new owner is the properties fourth since the earthquakes. Development plans including an office building, a replica of the former Press newspaper building, and a Quest hotel have been proposed and abandoned in that time. The land is now used for car parking. The news follows last month’s announcement that developer Nexus Point will build new offices for telecommunications company Spark on the former BNZ House site. Gilchrist said the hotel news signaled confidence not just in Cathedral Square, but in the whole central city.

“It’s a vote of confidence of what is happening. We are getting a convention centre, the library is going in, and there are new office blocks going up. It gives the purchaser confidence that they are in the right place. “Add to that the tourism boom, and the fact that we’re short of hotel rooms. This is a good outcome all round.” He said that despite the amount of vacant land in the central city, sites suitable for top-class hotels were scarce as the operators wanted an outlook over a park, square or river. “Christchurch is on the radar of overseas buyers because New Zealand is a popular destination from Asia. We’ve been contacted by a number of hotel chains wanting sites for hotels.”

What about the other Hotels?

  • Already under way in Cathedral Square is the conversion of the former Millennium Hotel into Distinction Christchurch hotel. It should open by early next year.
  • The former Forsyth Barr office building opposite Victoria Square is being redeveloped as the new Crowne Plaza hotel, which is due to open this year.
  • A Holiday Inn Express is planned for Gloucester St between Press House and Cathedral Junction.
  • The Millennium chain is understood to be looking for a new site in or around Cathedral Square.
  • The Peterborough hotel will be built opposite Christchurch Casino.
  • Canterbury Property Investments will build a Quest hotel on the corner of Manchester and Southwark streets.
  • An apartment-style hotel is planned for Colombo St just north of Kilmore St.
  • The former Rydges hotel building may be repaired and reopened, but its owners are in insurance disputes.

Source:

  • Liz McDonald
  • co.nz
  • Photo: Iain McGregor

Christchurch Convention Centre makes progress

convention centre

Artists impression of the convention centre from Victoria Square

Christchurch’s new convention centre could pull in $400 million in its first eight years, its developer says. Crown development company Otakaro Limited released new information and design images of the project on last week. “We want to create an attractive facility for Christchurch, that draws people towards the centre and its associated cafes and shops,” Otakaro chief executive Albert Brantley said.

The design allows the Christchurch Convention Centre to host events with up to 2000 people. It will include a 1400-delegate auditorium, a 3600-square metre exhibition hall, and 1600sqm of meeting rooms overlooking Victoria Square. “Estimates put the direct economic benefit of the convention centre to the Canterbury region at $300m to $400m in its first eight years of operation,” Brantley said.

auditorium

The auditorium is designed to seat 1400

Christchurch and Canterbury Convention Bureau (CCCB) manager Caroline Blanchfield said Christchurch had just 9 per cent of the national conference market, and attracted very few conferences from Australia. Before the old conference centre was damaged in the February 2011 earthquake, Christchurch had 24 per cent of New Zealand’s conference market and 42 per cent of the conferences that came from Australia.

Blanchfield said international organisations had approached her about coming to the city, but would not do so without a fully-equipped conference centre. “We have unmet demand for conferencing in Christchurch.” The new centre is due for completion in 2019, and Blanchfield said Christchurch was already bidding for conferences from mid-2020 onwards. “It’s vitally important that it stays on schedule from now on. We don’t want to lose another year’s opportunity,” she said.

The Government originally planned to finish the centre in 2017, and it missed out on its first contract for a conference in 2018 due to fears it would not be finished in time. Blanchfield said international convention delegates spent twice as much as other international visitors, often extended their visit to other parts of the South Island, and were likely to return for holidays.

convention interior

Artists impression if the convention centre interior

Brantley said Woods Bagot architects and Matapopore Charitable Trust designed the building to reflect the South Island landscape. The main entrance, featuring curves reminiscent of Canterbury braided rivers, will open to Oxford Terrace and the Avon River. The Armagh St and Colombo St sides are straighter, holding to the traditional edges of Victoria Square and Cathedral Square, and the restored Lady Isaac building. The plan incorporates hospitality and retail outlets into the Colombo St side of the centre, and space has been set aside for a potential hotel. The Armagh St side will include areas for public use with a view of Victoria Square.

Earthworks on the site are well under way and a main works contractor is expected to be appointed about July. Archaeologists have found “bear grease” hair product, children’s cutlery, and 1840’s pharmaceuticals among other artifacts at the site. “A lot of the stuff we’re finding at the convention centre is relatively early for Christchurch,” Underground Overground Archaeology’s Jessie Garland said. The artifacts were found among cellar walls, a well, and rubbish pits dating back to the mid-19th Century. Garland said archaeological works would not delay earthworks for the convention centre.

Source:

  • The Press

Number of cranes goes sky-high

The construction boom is seeing an unprecedented number of cranes rise across New Zealand’s cities, according to research released today. The Q2 2017 RLB Crane Index revealed a record 132 cranes towering over New Zealand’s cities, with Auckland alone accounting for 72.

crane

“In Auckland, in particular, strong economic growth driven by high inward migration and increasing tourist numbers, along with solid housing activity, manufacturing and consumer spending, has seen the rock star economy continuing to drive the construction industry, where demand is stretching the current supply,” said Chris Haines, Rider Levett Bucknall’s Auckland Director.

“Auckland continues to dominate New Zealand skies with 72 long-term cranes, 55 per cent of all cranes observed across the seven key centres,” Haines said. “The current index highlights a 13 per cent increase in the number of cranes within the Auckland region since the last count in Q4 2016. Twenty-three new cranes have been erected and 15 have been removed from projects that are nearing completion.” Construction work put in place increased by 20 per cent in the 2016 calendar year, making it the fifth consecutive year of growth.

Source:

  • Anne Gibson
  • NZ Herald

Commercial Bay – Auckland

Source: P Precinct

Auckland pips Christchurch

e2b0b50ef34483e3fa418ce128f8f5293f790d54_620x311New Zealand has 72 large fixed cranes up – 29 in Auckland, 23 in Christchurch, nine in Wellington, five in Queenstown, three in Tauranga, two in Hamilton and one in Dunedin.

Chris Haines, Rider Levett Bucknall Auckland director, said his company’s crane index showed how active the construction sector was because 43 new cranes went up in the past six months, mainly in Auckland and Christchurch.

Construction work nationally last year was up 42 per cent on 2012, Haines said.

Thirteen new Auckland cranes were put up since last year’s third quarter, including on Dominion Rd, Lynn Mall, and city office buildings at Wynyard and Victoria St West.

Further cranes were erected at the Auckland Theatre Company at Wynyard, Rothesay Bay apartments, Hobson St, Summit on Karangahape Rd, Albany’s Rose Gardens apartments and elsewhere, Haines said.

Residential projects represent 37 per cent of Auckland crane work, followed by civil projects at 22 per cent and commercial at 19 per cent.

Source:

  • Anne Gibson
  • NZ Herald
  • Photo: Greg Bowker

Catalyst in the UK

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• Commercial Construction – Buildings
• UK based Client interviews 18th-22nd May
• Fast paced recruitment project

Our client – one of New Zealand’s leading main commercial construction companies is visiting the UK 18th to 22nd May 2015 with the intention of hiring great people to strengthen their already dominant position within the NZ market.

As New Zealand based International Sourcing specialists and as preferred suppliers, Catalyst Recruitment has been asked to assist with finding suitable professionals to ensure their recruitment trip is as successful as possible.

Numerous roles are being sourced and include,

• Project & Senior Project Managers
• Design Managers
• Quantity Surveyors & Senior Quantity Surveyors
• Commercial Managers
• Planner/Programmers
• Construction Managers
• Pre-Construction Managers
• Site & Senior Site Managers
• Service Engineer/Managers
• BIM Specialists

Catalyst is already speaking to candidates in the UK every morning in preparation for the visit and the response so far has been great. We’re always keen to speak to new candidates so if your experience in commercial construction fits any of the roles above you need to get in touch with us straight away. Contact me via pponder@catalystrecruitment.co.nz and include a copy of your CV to know more.

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