Change, change… and then some
By Tina Perinotto
15 July 2010 – What did we say last issue? It’s all about big sudden changes right now. It started in politics; now that shifty feeling is spilling over into the sustainability business world. Hold onto your hats.
Ructions these past few weeks have been strongest in the engineering sector – the fairly mammoth resignation of Ché Wall, managing director of WSP Lincolne Scott for instance, and then major retrenchments from Meinhardt’s Melbourne offices as the fallout of the failed Dubai Pearl monster development played out.
There are positive moves too. Companies such as Umow Lai, NDY, Cundall, Arup and WSP Lincolne Scott are all gearing up for more work. Others, such as at least one environmental consultant in Sydney, are bypassing regular recruitment in favour of poaching whole teams, with an eye on lucrative regional contracts throughout the country, according to one inside source.
In Sydney even the recruiters are moving, with Mike Skelding – who had notched up quite a name as recruiter of choice for sustainability jobs at Judd Farris – jumping ship for another role altogether.
Generally the mood is upbeat but cautious. Big uncertainties include the upcoming federal and Victorian state elections and the largely unknown attitude of the new Gillard government – or potentially an Abbott government – to climate change and environmental policy settings. Economically, fallout is still coming through from the global financial crisis mark I – delayed by the Rudd government’s stimulus package, but now playing out – and potentially the clouds from the GFC mark II that are gathering globally .
On the upside, among the most confident has been Melbourne-based Umow Lai.
It recently snared Andrew Jenkinson and Warner Brunton from Aurecon to reignite its Brisbane office, which has been in hiatus for some time, and promoted two Melbourne staff, Brian McDonnell and Anthony Marklund, to join them.
But it’s in Melbourne that the heat is starting to build the strongest.
“There are very encouraging signs,” director Ken Loh says. Emerging on the drawing board are new commercial projects – and even retail, which has truly been in the doldrums.
“Developers are moving, putting in place plans to be in a position [so that] when the market turns around they will be in the right place,” Loh says.
So that place has not yet been reached?
“No it hasn’t. But there are a lot of opportunities for developers who are looking to attract tenants, and a lot of tenants looking around.”
In all the projects sustainability is “featuring strongly – as always, and getting stronger”. Especially with one of the company’s favourite clients, Grocon.
Loh just this week attended the launch of Grocon’s famed Pixel building in Melbourne (brought to you first by The Fifth Estate), which is promising to live up to its hype as a sustainable carbon neutral “laboratory” in which to test and demonstrate the most advanced sustainability features possible so that it can inspire Grocon clients to take a deeply sustainable plunge for their own buildings.
The partners in some of the building’s sustainable elements, Melbourne University and RMIT, have helped lift the profile.
The building, says Loh, signifies a new phase in the development of sustainability, helping to shift the benchmark to carbon neutral, just as the benchmark rose from four-star Green Star to five and six-star.
“Grocon is leading the way as developer and constructor and selling the message … expanding the boundaries.”
Loh says his company is working on “quite a number of prospective projects – four or five” with Grocon. And yes, “always in that space”.
“They can’t afford to sit still.”
Umow Lai would “love to do more with them,” he says. “They gave us the opportunities to test things – probably a bit different to a number of the developers, they like to test and push. And Daniel [Grollo, the managing director] is a director of the Green Building Council.”
For Loh, all this adds to the confidence to put on more staff: In Melbourne that figure is now 120 of the 160 nationally.
For Meinhardt, the recovery from the global financial crisis has been realistically anticipated to be delayed, possibly until late this year, mainly because of its exposure to the fallout from the giant Dubai Pearl development and unpaid fees said to be close to $7 million.
Meinhardt’s national director of mechanical and electrical engineering, Janos Baranyai, confirmed this week that his company had retrenched nine staff from the Melbourne office of its 100-strong building services team but strongly denied the entire team would be disbanded as some market commentators had signalled.
Building services was one of the company’s strongest performers in Australia and world-wide, he said.
“We went through the GFC without any retrenchments [in contrast ] to most other companies in the industry, then picked up lots of work through the stimulus packages. But in the end we had to let go of nine people out of 100 we have [in the building services division]. Of course it is not good.”
“We had to do this, mainly because of Dubai.”
However, the turndown would be short lived, he predicted, and the expectation is that output would double within three to four years.
Positive signals on the horizon were coming from the private sector, and it was expected some of this would translate to new work by the end of the year.
“Much more inquiry is coming through, but that has to be turned into projects.”
The impending federal and Victorian state elections would almost certainly put a dampener on those prospects, he said.
The company was recently subject to a management buyout, with the majority owner now Dr Shahzad Nasim of Singapore, who had been a Meinhardt staffer for 30 years.
In Australia, Meinhardt employs close to 300 people, and globally about 3500.
WSP Lincolne Scott
The principal and Victorian state director of WSP Lincolne Scott, Michael Pesch, speaking in the wake of the departure of Ché Wall, said the company was planning to restructure and to build on its 100 year history.
He said the market outlook was “starting to pick up” and people were beginning to reassess their position and dusting off the debacle of the canned emissions trading scheme.
“The government has a key role in this in terms of where they stood with emissions trading and the back flip, and now paving the way forward,” Pesch says.
While some commentators have read the Gillard government’s initial soundings on climate change policy as negative because of the Prime Minister’s comment that she would look for broad consensus for action – considered a highly unlikely possibility – not so Pesch.
“If I read Julia Gillard’s strategy or leadership skills, [correctly…in terms of the mining tax] it’s about listening to people and engaging with people, and formulating a response in a way that was clear in terms of the mining tax super profit,” he says.
“While I don’t think there was an option but to negotiate, hopefully she takes a similar approach to climate change. Hopefully this gets traction and we can move on and achieve things.”
In terms of the broader market, and Victoria in particular, Pesch says his company’s response is to position for growth. From a global perspective too, WSP Lincolne Scott views Australia as a growth area and therefore “we can’t be left behind”.
“I’ve been telling my staff and fellow principals there have been some very positive signs in the market in Victoria to start things.
“I think a lot of the developers have been sitting on the fence and the banks have been holding very tight reins of the purse strings, and I think we’ve seen some tentative efforts with development, talking about projects that have been on hold for two to two-and-a-half years.
As with other companies, WSP Lincolne Scott has suffered staff losses – around 12, Pesch confirms – but the signs now point to growth.
“With the severity of the GFC, we had to make some operational cuts. But what we did was … to make sure that when the market [improved] we could be in as good a shape as possible to pick up.”
One of the strongest signs, he says, is in the commercial area.
“I see some of the bigger developers making moves in terms of looking at new projects and, talking to some of the leasing people, there are still big tenants looking for sites.”
In the market are major tenants such as Australian Taxation Office, NAB, BP and Westpac – interestingly, many of them are financial institutions, Pesch notes.
The state government in Victoria is also injecting substantially into the health sector.
“We have a very strong health team.” Among current work is the Olivia Newton John Cancer and Wellness Centre at the Austin Hospital and the Bioscience Research Centre facility at Latrobe University, which was probably a world first in some terms. It was also a project that was “extremely intricate” in technical terms and which had “really tested the team, but the feedback from stakeholders seems to be very promising.”
All this had convinced a key staff member or two to consider coming back to the fold after leaving the company. Sham Thadani for instance (a principal and group director who left in December) will rejoin.
There could be others who would rejoin, says Pesch. Hopefully the restructure would signal that perhaps the “the grass wasn’t greener on the other side, and that this is the winning team”.
Cundall principal Simon Wild has more upbeat views on sustainable building demand nationally. “The outlook in sustainability is very strong we are currently seeking candidates in Sydney Melbourne and Brisbane for sustainability engineers and consultants at all levels,” he says.
“The strong end to the financial year looks like it will continue through the next six months.”
Arup principal Andrew Pettifer, is another upbeat figure on the sustainable buildings front. “We are extremely busy with a very healthy forward order book, particularly in the services team,” he says.
“We currently have five new commercial towers for the CBD in design, mainly in the early stages, and there is no guarantee that they will all go ahead. But it does seem that there is life in the commercial sector. At the top end of the market, where we operate, there is still a healthy demand for 5 and 6 Green Star.”
However, Pettifer doubts that there was much demand for green buildings at the lower end of the tenant spectrum, those looking for buildings outside the A-grade/Premium grade parameters. A view backed by recent research, he says.
Key opportunities in Sydney included NSW Health Infrastructure, which was “starting to push more work out.”
“I suspect that Arup are being a lot more successful than most of our competitors so maybe the story is that the top firm(s) are doing well but things are still patchy for the also-rans,” he says.
Also in Melbourne at least one of the staff retrenched by Meinhardt was snapped up – the same day – by NDY, which is understood to be looking for more hirings.
Peter Szental – sad news
In news just in (15 July 2020) group communications manager corporate affairs for Szencorp Mark Lister has let us know that Szencorp founder and managing director Peter Szental has passed away.
Mr Lister’s message read: “Many of you may have already heard, but yesterday we received the sad news that Peter lost his battle with cancer and passed away at home surrounded by his close family.
“His funeral will be held today in Melbourne.”
Mr Szental will be remembered by The Fifth Estate as a true champion for environmental improvements in the property industry. He was a fierce campaigner and lobbyist for his chosen cause of energy efficiency and not afraid to reveal the negative in the meticulous monitoring of performance of his prized building that headquartered his company at 40 Albert Road, South Melbourne.
Mr Szental will also be remembered by our team as the man who with “no questions asked” provided the first foundation sponsorship for The Fifth Estate, directly enabling its creation not just financially but with his wonderful encouragement and faith.
Peter Szental will be deeply mourned.