arrangements with established companies, particularly the large-balance-sheet builders who bring their expertise and their capital to these projects.
Some funds insist that in the future partners will need to bring capital together with their expertise in a true risk sharing arrangement, for example, Rosecorp/AGL site/C+BUS’s 100 hectare residential development in Sydney. While the bulk of the funds are likely to be applied through PPP type delivery and direct investments there will be, according to some funds, a role in the future for the “old developer” - the ideas person with little or no capital - but they will share a much diminished profit share in the process, as funds flex their knowledge and muscle.
The future role of the listed and unlisted property trusts in Australia remains unclear as the GST tax changes, as yet unresolved, will undoubtedly change the modus operandi of these funds in both development and PPP type projects.
The view increasingly held by many funds is that they will add much more value for their stakeholders “if they get the development process right themselves rather than relying on others”.
Recent press indicating that Lend Lease were “getting out of property development” misrepresents the facts. They are becoming more sophisticated and running funds like their “Capital Enhanced Fund Series”, which is designed to provide higher returns, and to utilise their market expertise within the various and extensive elements of Lend Lease. Returns on developments completed in this fashion are maximised through aggressive asset management and optimum sale strategies. Multiplex, Leightons and Grollo are others heading down this route. The Charter Hall/AMP joint venture is another example. So where does high-quality architecture fit into these processes which are directing their interests into health, aged care, education, commercial, industrial and general infrastructure projects?
For the bigger practice, the answer is that we will see fewer, but very large, architectural practices in Australia, which will dominate the market. They will form (and are forming) relationships on a national and international basis, utilising their expertise where most appropriate. This expertise is likely to be management and design expertise, with a blurred line between documentation and administration. The blurred line reflects the fact that architectural skills will marry with the fund provider/developer and with the major sub-contractors and suppliers through the use of internet based software that, of course, takes no account of the traditional boundaries between providers to the development industry. Alliancing type contract arrangements facilitate these new approaches.
| | A current major project example in this field is the National Museum, which has caused a complete rethink of the role of the architect. Major sub-contracted component like “structure” and “curtain wall” have been fabricated directly from design development stage 3D CAD drawings. The architect provides expert design control rather than producing many drawings, a large proportion of which are later replaced by shop drawings. (The museum is, of course, the result of an international design competition.)
In the housing sector, governments are recognising the need for financial and structuring incentives to overcome the deficiency in the supply of affordable housing. Should these matters be adequately addressed there is likely to be a significant increase in interest in these areas by investment funds. Landcom in New South Wales is leading in an analysis of this problem and has involved advisers and industry groups to assist. The problem remains large and unresolved but offers great potential for the architectural profession.
In the health area, where initial capital costs are usually only equal to annual recurrent costs, there are significant benefits to be obtained through better design combined with improved work practices. A new hospital project in South Australia is moving down the alliance process seeking to improve on the costly traditional process.
What is the future for the small practitioner?
Returning to the question of “art in architecture”, the small practitioner will have many more opportunities by applying their design skills and forming internet based relationships with larger architectural practices on a project-by-project basis, as well as winning work through design competitions.
Just as the development industry is changing rapidly, the place of architecture and the role of the architect in Australia is also changing quickly. We need to be freer in our attitude towards sharing ideas and skills and more willing to become partners and leaders in a team based development process.
Notwithstanding any of the above, design competitions that are directed towards best practice solutions should be encouraged and remain the key focus for our profession.
No team member in the development process other than the architect can provide the vital ingredient for our future and present communities - quality design. No other team member is better placed to advise and guide the process on environment and life cycle issues. The challenge lies squarely with the architectural profession and the educators who contribute to it |
