Market Pulse: Hotels, student accommodation, build-to-rent and senior living will be hot in 2018, according to Australasian architectural design firm Warren and Mahoney.
The New Zealand practice, which expanded across the Tasman four years ago, is pursuing hotels and student accommodation in particular.
Sydney principal Nicholas Bandounas said the firm was in early talks with a couple of providers in those sectors.
“Student accommodation – they are desperate for more student accommodation buildings – but with the residential market being so hot, it’s very difficult for providers to buy land and make it stack up,” he said.
“Now as interest rates go up and residential starts to drop, you’ll find that the hotel and student accommodation sectors will start to rise a bit quicker.”
Mr Bandounas said potential growth in Australia over the next 5-10 years in those four sectors looked promising.
“Another one we’re about to get into is the build-to-rent sector. We’re in early conversations with a couple of major global providers there as well. So these are the ones you’re going to hear more about in the next 18 months.
“We have strategists and researchers on board, who work out of NZ, who research the markets in Australia and NZ and try to stay one step ahead of the game.”
A New Zealand-esque approach
Established in 1955 in Christchurch, Warren and Mahoney is one of the top NZ firms and has been a key player in the rebuilding of Christchurch following the 2011 earthquake. The firm collaborated on the Christchurch Masterplan blueprint and was awarded several projects, including the Justice Precinct and convention centres.
Mr Bandounas said the firm was working in Australia on the NAB customer experience rollout when the New Zealand directors decided to create a permanent presence.
Typically there’s the scenario of Australian architects going to New Zealand and working in New Zealand, but Warren and Mahoney decided to do the opposite to offer “a New Zealand-esque method of working, design, approach and process”.
The firm is thinking big, with aspirations to become design leaders in the Pacific Rim – New Zealand, Australia, Asia and the west coast of the US.
“That Pacific Rim circle is the ultimate – that would be the icing on the cake.”
In addition to its five NZ studios, Warren and Mahoney opened premises in Sydney and Melbourne, and now employing close to 300 people across its operations.
About two years ago the firm decided to ramp up Australian operations with “a more aggressive approach” to increase market reach, which Mr Bandounas said has been very successful.
He was appointed Sydney principal to bring in contacts as well as commercial and large-project experience.
“That was their first step in that vision of growing to 100 people in Australia in the next five years and it’s come off well,” he said. “We started with retail rollouts for NAB to now doing large $300-400 million projects.”
There’s 27 people in the Sydney office and another 21 in Melbourne. With several big projects in the wings, Mr Bandounas predicts Australian staff numbers will increase to 60 this year.
Major projects include the Landmark Tower, a 43-storey commercial, retail and residential development in St Leonards on Sydney’s lower north shore. The project, which features 455 luxury apartments, will be one of the tallest towers north of the CBD. The team is collaborating with designers A+ design to seek development application approval.
Warren and Mahoney won a design competition for 350 apartments and 400 student accommodation keys in Sydney’s Macquarie Park, which is currently progressing to DA, and they were also recently nominated as preferred scheme for a large prestigious residential design competition in Melbourne.
Other projects include a $600 million data centre, and a $200 million sports precinct for Latrobe University.
Mr Bandounas said Australian developers’ taste for change combined with a risk-adverse approach was reaping benefits for the firm.
“They are wanting to try someone new but don’t want the risk of trying a small firm,” he said.
“So the beauty of our firm is, while we’re very young and fresh, you could call us boutique in Sydney and Melbourne … we have 300 people across the Tasman that we can tap into for these large projects.”
The sports precinct project is a good example.
“We’ve done lots of sports projects in NZ. And so that’s being worked out of Melbourne, but we obviously helped from New Zealand.
“And that’s the beauty of us coming to Australia, coming new and fresh, and having the backing and reducing the risk for our clients because we are one firm working for the one cost centre.”
Auckland is booming
The NZ market is showing no signs of slowing down either. Christchurch and Auckland are the firm’s two biggest studios.
“I believe Auckland is bigger now,” Mr Bandounas said. “There’s a lot of work in Auckland; a lot of recent work is currently under construction. A lot in the commercial sector and masterplanning and also sports stadiums.
“The rebuild of Christchurch is starting to come into its own and I suppose we’re off the peak of that – the buildings are done, designed and under construction.”
However, Christchurch is still very busy. Mr Bandounas said a lot of Asian developers were starting to look at Auckland for residential.
“Auckland is booming – it’s like another Sydney. Residential is huge there at the moment, where prices are nearly matching Sydney prices; it’s quite expensive.”
He said the recent change in government would provide a similar outlook in development.
“Slightly better. They think it will be slightly easier, and more opportunities for development to occur – slightly.”