What are some of the biggest advantages for the development industry in undertaking adaptive reuse, especially when compared to demolishing and starting with a new design?
It was actually Perth’s ‘knock down and rebuild’ mentality some two decades ago that motivated my business partner and I to start our company.
At the time we witnessed the constant dilapidation of magnificent structures throughout the City to make way for bland ‘cookie-cutter’ builders, with no foresight for the visual impact or surrounding aesthetics.
We believe the development industry has a responsibility that extends far beyond built structure. It’s about maintaining the integrity of our streetscapes and understanding that the built form is something that is enduring and plays a significant role environmentally and culturally.
Adapting heritage form for modern-day use captures a story from the past and creates a unique and unreplaceable space, and this makes good sense socially and commercially.
What are some of the biggest challenges involved with the process?
Certainly, the biggest challenges when taking on an adaptive reuse project are those that can’t be immediately identified. This is largely the reason why so many developers have historically shied away from taking them on.
While X-ray technology has improved our capacity to assess a building’s structure, in most cases issues are only uncovered during the development process, which can impact significantly on the budget.
It is an incredibly rewarding challenge to explore ways of introducing modern day requirements into early design, when items such as electricals, plumbing and energy efficiencies had not been a consideration during construction historically.
We introduced a false floor methodology in our Heirloom building to accommodate services in order to maintain the ascetics of the Jarrah beams and exposed timber throughout.
Do you think the process of adaptive reuse is undertaken enough in Western Australia? If not, why not and what more can be done to encourage it?
We have come a long way from the early days when buildings were deliberately left so derelict that demolition was ultimately the only options. It is devastating to think of all the lost opportunities.
We are in different time now and I believe the industry is well across the intrinsic value heritage fabric can bring to a project and its surroundings.
That said, not every heritage property can be justified in a competitive marketplace, and returns need to be factored into each project. It is unquestionably more expensive to take on heritage work and navigate the development limitations.
Financial and process incentives would certainly compensate the developer and encourage more work in this area.
Of the projects you have worked on, from an adaptive reuse basis, which is your favourite project and why?
Without question, “Heirloom by Match” in Fremantle holds such significance as a community icon with an incredible depth of history. Being able to reactivate this site for modern-day use after so many decades of deteriorations truly an honour, and our success in retaining over 85% of the heritage fabric is an incredible achievement by my team.
However, “Home” in Perth represents a real turning point for adaptive reuse in Perth. We were more or less the only company taking on projects of this magnitude at the time and it really allowed us to demonstrate what could be achieved.
When we started this project, the building was locked up and covered in graffiti. Our work uncovered an architectural masterpiece that was nothing short of impressive. It created streetscape presence that helped to shape the west end of Perth’s CBD.
After its opening, there was a real industry shift towards our cause. I will always be very proud of our work on that property.
Aside from the heritage/historical significance of utilizing existing buildings, what other benefits to adaptive reuse are there?
While there is a a great deal of benefit affiliated with historical significance and heritage features, any project must also make financial sense.
We find that people ultimately buy into these projects for their uniqueness. There is no comparison to a modern building and these factors allow for a pricing model that can adequately cover additional development costs.
The boutique nature of these projects mean they hold a strong market value, and as consumers are are buying a piece of history, it is perceived as priceless.
Any further comments you would like to make around adaptive reuse and its benefits for the Western Australian development industry?
I truly believe Perth now fully realised the value of our heritage structures.
The City is extremely fortunate to have such a strong Heritage Council body to partner with developers and ensure each project has the best outcome, and local government stakeholders appreciate the significance of our work within their jurisdiction.
The level of collaboration required to bring these projects to fruition cannot be understated.
Comments for UDIA attributed to Lloyd Clark, Managing Director of Match parent company M/Group
Read UDIA’s full article here
A Wall of Cash is Coming: This is How to Invest ItRead more
With the wall of cash dividends hitting investors’ accounts over the coming months due to surging iron-ore prices, there is one question top of mind: What to do with the cash?
Industry analysts are predicting the dividend windfall from BHP Limited (ASX: BHP), Rio Tinto (ASX: RIO) and Fortescue (ASX: FMG) could top $65 billion over the year, in addition to the $7 billion from the Big 4 banks. With the current cycle of almost zero cash rates, the race is on to find sustainable income-producing investments.
Amid the noise of an exciting investment market, there are solid, high-yielding investment opportunities in the periphery of the action that offer both security and good returns.
How to find property assets that stack up
Australians love affair with property has become even more pronounced since the initial shock of the COVID-19 pandemic panic set in. We are both staying and investing locally. House prices from the east coast to the west coast have sky-rocketed and commercial and industrial assets are in hot demand with a raft of banks and non-bank lenders ready to lend money.
The level of appetite and competition in this space is highlighted in Stamford Capital’s latest Debt Capital Markets Survey, which tracks lender sentiment and the latest trends in the real estate debt market.
Based on responses from over 100 lenders, including banks, non-banks and private financiers, the survey found a “dramatic swing from the bleak outlook a year ago” when capital dried up, leverage levels decreased and lending criteria tightened.
Carried out in March this year, the survey found lending appetites were back at pre-COVID levels with increasing deal competition from a growing pool of non-bank lenders expected to compete more heavily on price and force down interest margins.
Private capital chasing higher yields in the booming property market has seen a large increase in the number of new non-bank lenders offering construction and investment loans this year.
While the pool of debt is available, and still relatively cheap, the trick is trying to find the property assets that stack up. This is where an experienced property fund manager can sort the wheat from the chaff. Sourcing the asset is one thing, knowing if you are paying too much is another. Selectivity is the key.
Mining the macro and geographical factors
Looking at macro factors and geographical location is also vital. Where are the industrious activities happening? City or regional, coastal/ports or mining? The mining industry for example has seen a significant uptick since June 2020. Mining exploration in Western Australia is almost at record levels and the capital raising pipeline is strong.
The Australian Securities Exchange notched up 42 IPOs in mining-related businesses over the past 12 months to April 2021 and despite the Covid-19 pandemic, is well ahead of other hotspots including Toronto, with 28, and London with two, according to data compiled by Bloomberg.
With the recent news of a $500 million investment in the Kalgoorlie-Goldfields region by Lynas Rare Earths, along with a $400 million commitment from Evolution Mining (ASX: EVN) for the acquisition of a collection of Northern Star (ASX: NST) mines on the western side of Kalgoorlie, and BHP recently revealing it has struck a deal to supply nickel from the region to Tesla, the region is experiencing a level of sustainable economic activity not seen for many years.
So, it appears on a macro level, locations near to, and supporting the burgeoning mining exploration and production sector seem sensible. Resources need resources, including human capital. But accessing large commercial and industrial assets in those regions is not an option for many individual investors.
A golden commercial opportunity
It takes a skilled property fund manager to find the asset and assess it on its merits.
In the case of commercial property, is it tenanted, to whom, and for how long (WALE)? What are the costs associated with acquiring and managing the property? What is a fair acquisition price and how will it be funded? If everything stacks up, then a due diligence process will follow. Lenders are appointed and capital is raised (normally to the tune of 50% debt funding by banks/lenders and 50% by investors).
For both groups, returns need to be negotiated. And in the case of capital provided by investors, a yield or distribution based on the rental income received will be passed on monthly or quarterly, for the life of the investment, which usually stretches to between five and seven years.
Perth-based M/Group has recently gone through that process on a macro and financing level and plans to invest in a large format, fully leased 6000 square-metre commercial asset in Kalgoorlie, Western Australia forming the Boulder Road Property Trust.
In the heart of the Goldfields, Kalgoorlie is home to 30,000 people, swelling to 40,000 in boom times. With three national tenants locked in for a WALE (Weighted Average Lease Expiry) of 8.08 years, the fund is targeting monthly distributions to wholesale investors of 8% pa for a period of seven years (unless the asset is sold prior and capital returned). That’s 7.5% higher than the current cash rate. Importantly, the tenants are high quality and essential to the locals and the resource sector – RSEA, Autobarn and Heatleys.
M/Group’s Latest Investment OpportunityRead more
A brand new opportunity to invest in an income asset fund and partner with M/Group in the acquisition of a newly constructed, fully leased, large format retail property.
Learn more about how this property and its tenants will service their community, while providing investors with a target distribution of 8% p.a paid monthly by visiting: www.boulderpropertytrust.com.au
Four Wins in a Row for M/ConstructionRead more
M/Construction hit a quadfecta at this year’s Master Builders Australia 2021 Excellence in Construction Awards when the company took home its fourth ‘gong’ for ‘Best multi-unit development’; this time for its work on Quest Apartment Hotel, Ascot in the $10-20 million division.
This high-profile, 112-room purpose-built property is the second Quest apartment building to be entrusted by the apartment hotel giant to M/Construction and has significantly strengthened an already strong relationship between the two organisations.
The project faced many challenges, notwithstanding planning holdups with Covid-19 lockdown restrictions, a complete review of all materials and their delivery timeframes due to supplier delays and being located on a busy intersection where traffic management was required.
M/Construction director, Mr Michael Read, said the sheer prestige of the building and the work that went in to finish it to the highest caliber makes this year’s award win even more gratifying.
“Our work is often likened to that of a well-oiled machine, where all the many components are coordinated with such great precision that result often exceeds expectation,” he said.
“In the case of Quest Apartment Hotel, Ascot, we faced enormous challenges that might have crippled another building company. However, our advanced systems and processes were so well executed that we finished the job on time and to an extraordinary standard.”
The development program saw the company introduce a unique construction methodology whereby one entire floor was competed every two weeks, enabling for services to start work weeks earlier than usual.
In assessing the project, the award judges considered quality of construction, project management, value for money, innovation, and site management – all which M/Construction excelled.
The Master Builders Award accolade is equally reflected in the client’s response of being impressed by the process and end results. Shortly after completion Quest was announced as “Oceania’s Leading Serviced Apartment Brand 2020” in the World Travel Awards further highlighting their strong and consistent brand through their premises.
“Many might query what makes M/Construction so different to other companies within the marketplace and the answer is evident in the way we conduct our business towards achieving outstanding results time after time,” Mr Read continued.
“We are extremely pleased by this latest award win, as it truly cements M/Construction’s credentials not only in apartment buildings, but also serviced apartments where quality and consistency are on show.”
“We thank the MBA for its acknowledgement and look forward to working on many more great construction projects.”
The Quest Apartment Hotel, Ascot is an $18.5 million project built on a 2,211sq.m site with a project area of 8,072sq.m. It was completed in just over 15 months.
Exciting First Steps for Young FamiliesRead more
While nothing might be as exciting as a baby’s first steps, when a child’s early milestones coincide with the security of your own home in a supported family-friendly community, there really is cause for celebration.
The Wedge Wellard is becoming a haven for young families and first home buyers who have successfully escaped rising rent rates to secure their own home.
The growing community is located on the doorstep of natural bushland and next door to a private primary and high school. Its parks and playgrounds have already created a welcoming hub for playdates and get-togethers, and a childcare centre is scheduled for completion at the end of this year.
Director of Monument parent company M/Group, Mr John Wroth, said the estate has everything a young family could need and is providing affordable home options at a time when rental prices and availability are putting huge pressures on our community.
“Perth is undoubtedly in a housing crisis and first-home-buyers are amongst the most disadvantaged. Many developers have continued to focus on moving larger lots in the peaking market and too many renters are facing price increases or eviction.” he said.
“Despite the soaring market conditions, we are not only holding our prices, but creating product that will help create house and land packages for under $300,000 – getting families out of the rental cycle and into a growing community.”
The Wedge Wellard estate is half-way complete with Stage 1 sold out and around 70% of land in subsequent releases snapped up.
Stage 4 is the estate’s newest release and has been specifically designed for families and first home buyers to get a foothold in the market.
“Our new release gives owners the added advantage of being located within walking distance to everything. It screams value at a time when affordable housing is extremely thin and interest rates historically low,” Mr Wroth continued.
“We are one of the only developers providing low-cost packages so close to Perth, so it presents an amazing opportunity for first home buyers to get in on the property ladder, which could mean enormous relief to young families.”
Stage 4 incorporates a range of strategically designed ‘skinny’ lots priced from $130,000. The land will accommodate a 3-bedroom x 2-bathroom home, with house and land packages earmarked to be priced as low as $295,000.
“We are so thrilled to see so many families now settled into The Wedge at Wellard and enjoying this very special place. We know that anyone who visits the estate will fall in love with the prospect of joining them,” Mr Wroth continued.
“We very much look forward to welcoming our new group of residents.”
Lot sizes range from 188m2 to 537m2 and titles are expected by August 2021.
For more information visit www.thewedgewellard.com.au or call Damyn Strang on 0434 070 654.
An Easy Sell For AmandaRead more
As the salesperson at the forefront of boutique property company, Match, Amanda Spagnolo has helped to showcase a countless number of beautiful apartments and terrace homes, ranging in style from urban to heritage and coastal. However, recently one stood out enough for her to make a personal investment.
M/31 Apartments by Match is located in DevelopmentWA’s visionary Shoreline precinct in North Coogee. It is the sister project to its neighbouring and highly acclaimed M/31 Terrace Homes by Match, and part of a three-site design cluster that will create an architectural fusion that interacts with the natural surrounds, connection to the ocean and extensive open space.
Ms Spagnolo was instrumental in the sell-out success of M/31 Terrace Homes, so when the apartments were released onto the market, she couldn’t help but buy one for herself.
“I wasn’t really looking for an apartment, although I am always on the hunt for a great opportunity,” she said.
“Having lived north of the river my whole life, I never thought I would venture south. However, as my work has taken me to Perth’s southern coastal corridor, I have really started to see why people find it so special.
“This part of North Coogee borders South Fremantle and is what the locals call ‘South Beach’, but the price tag is vastly different to the South Fremantle property market. I considered the M/31 apartments to be a particularly good purchase as it is also so close to the beach and all the surrounding amenity.
“After viewing the visionary DevelopmentWA video on Shoreline and what is planned for the area, I was excited about getting on board.”
M/31 Apartments by Match comprise of 28 boutique apartments. It is architecturally designed by well-known and respected Cameron Chisholm Nicol Architects and is said to ‘push the envelope’ when it comes to creating signature residences that maximise the location and space.
The apartment architecture is led by the building’s beach-side location with large balconies to capture shade in summer and sun in winter. All materials and colours are inspired by the surrounding coastal environment.
Managing Director of Match parent company M/Group, Mr Lloyd Clark, said the response from the market has been unquestionably positive. He confirmed that in just a few months, the ground floor apartments had sold out and interest continues to increase.
“This is an impressive building. The top-floor apartments are designed to stand out with a ‘floating’ illusion from the exterior and a ‘pop’ of colour to create impact. Inside, this design feature accommodates a limited supply of split-level luxury-living with dual balcony space and additional features, including a study nook,” he said.
“It’s no surprise that any astute sales consultant or property investor would see value in this development. We wholeheartedly congratulate Amanda on her purchase.”
As an ‘off-the-plan’ offer, all apartment interiors and colour schemes can be altered to the buyer’s taste during the construction phase.
Ms Spagnolo does not intend to adjust the apartment in any way as she believes the ground-floor apartment she secured will deliver great flexibility into the future.
“I’ve been living in apartments for around five years and really enjoy the security and the lock-and-leave aspect of the lifestyle,” she continued.
“While my plan is to live in the apartment, down the track I know that rentals on the coast are always in high demand, so I felt that this was a very safe purchase in both regards.
“I’m looking forward to walking to the South Freo Café strip for a Sunday breakfast. Or just bike riding to the local bakery to get a loaf of bread.”
M/31 Apartments by Match have one and two-bedroom layouts available and are priced from $375,000 for the one-bedrooms and $475,000 for the two bedrooms.
For more information visit www.m31apartments.com.au or call 0432 660 066.
Amid unforeseen planning approval delays, strict contract brief requirements and the onset of Covid-19, M/Construction has achieved what many would deem impossible.
The company recently completed its second multi-residential Quest Apartment property, to a standard befitting of its high-profile client, Australia’s largest apartment hotel operator, Quest Apartments.
And despite extraordinary circumstances during the construction program, M/Construction successfully shaved some three to four months off a standard construction schedule to deliver the property both on time and to budget.
M/Construction director, Michael Read, believes few construction firms in Western Australia could have navigated the range of challenges faced throughout the construction of Quest Perth Ascot as well as M/Construction. However, he said innovation and ingenuity is what the company does best.
“M/Construction is today recognised for a range of advanced technologies that we have in place to manage on-site systems and processes to the highest degree,” he said.
“These systems do not merely help us manage onsite activity, they also enable us to evolve as construction professionals. We bring valuable intel from one site to the next, which proved particularly critical in the recent Quest development, where we were working to strict deadlines, unplanned factors and with multiple stakeholders.”
Quest Perth Ascot is a nine storey, 112 room apartment hotel that includes a pool, gym and conference room. It is located on a 2,211sq.m site at 266 Great Eastern Highway, near Perth Airport and enroute to the Perth CBD.
“We had an obligation to meet our client’s operational timeframe. Construction delays were not an option, regardless of the unprecedented circumstances we faced,” Michael continued.
“We pulled out all stops to ensure the property did not merely get completed, but was built to the highest standards possible.”
ONE FLOOR EVERY TWO WEEKS
Perhaps the most remarkable accomplishment throughout the construction program was M/Construction’s capacity to execute a new development model and building process that saw one floor completed every two weeks.
This was achieved by the installation of pre-cast concrete walls and a hollow core flooring structure, together with the integration of construction methodologies and customised design features that had been perfected during the Quest Joondalup program.
Concrete floors and toppings were poured and cured over the weekend to create self-supporting formwork that required no props. As a result, the workspace below was obstruction-free and allowed follow-on trades to progress with the installation of framing and services unencumbered.
M/Construction Project Manager and Master Builder’s Award winner, Joshua Stott, said the process required explicit co-ordination with a large team on site at any given time.
“The onsite activity was electric, with some 100 people on site at once. Where there might usually be a time delay between construction works and the installation of frameworks and services, we were able to coordinate and synchronise these to save time and maximise resources, he said.”
“The efficiency of the exercise effectively knocked up to four months off our construction timeline and helped us make up for time losses incurred at the commencement of the project.”
In additional to pre-cast structures, all openings and frames were prefabricated to meet accelerated time measures. This meant extensive scrutiny of products and materials was required prior to the material’s arrival on site.
ACCOMMODATING COVID-19 REQUIREMENTS
In what would already be regarded as an extraordinarily busy building site, M/Construction was required to shift into an even higher gear to accommodate new Covid-19 procedures.
Newly introduced Government regulations activated the introduction of safety management training to the entire workforce, as well as increased cleaning regimes, additional lunchrooms, scheduled break times and the installation of sinks and hand sanitiser.
As the construction site was considered an ‘essential workplace’, workers were able to continue with their tasks, but needed to adapt quickly to new workplace conditions.
“There was definitely a lot of uncertainty to start with, but we all remained conscious of the job at hand and worked effectively to maintain productivity. Ultimately, over time the availability of our workforce increased as a result of Covid-19 and we were able to leverage this through the construction timetable,” Joshua continued.
MANAGING THE IMPACT ON THE SUPPLY CHAIN
As with many projects of this caliber, Quest Apartments had outlined a strict brief of supply items to be used in the construction of the property.
The impact of Covid-19 saw several of these suppliers close production or become unable to deliver product as previously planned. This occasionally involved critical items and indefinite delays, such as the shipping of building’s lifts from international ports.
“When Australia closed down, it was like starting from scratch in terms of identifying which products could arrive, where there might be obstructions and delays, and what concessions we needed to make to ensure the timely delivery of products,” Joshua recalls.
“What could have been disastrous was made less problematic due to established supplier relationships and systems that enabled us to co-ordinate onsite activities to the availability of materials.
“We ran an extraordinary tight ship, but achieved everything in record time.”
BUILDING ON THE QUEST RELATIONSHIP
The success of Quest Joondalup had established a high level of trust between Quest Apartments and M/Construction with the project attracting a great deal of praise in terms of finish and quality, including a finalist nomination in the 2020 World Travel Awards.
The construction of Quest Perth Ascot has since been instrumental in supporting and building on this commercial relationship, and M/Construction believes its position as an extremely reliable resource that offers more than construction services has been secured.
“It is not enough to be a good builder in this highly competitive and regulated environment. The process needs to be efficient, safe and responsive to stakeholders’ needs” Michael said.
“Quest Perth Ascot is certainly an excellent example where all these factors were drawn on, and it is a testament to the great project team we had working on the job. We thoroughly enjoyed working with Quest Apartments and look forward to assisting them on further developments.”
Quest Apartments has over 43,000 operating serviced residence units in key cities around the world with a further 31,000 units under development. The company’s largest shareholder of 80%, Ascott Limited, is the largest serviced residence provider in Australiasia and is targeting to double its global portfolio to 160,000 units over five years.M/Construction is an award-wining building company that provides design, construction and maintenance services for residential, commercial, retail and government building projects. The company has built a reputation for its work across both M/Group projects and independent third-party initiatives, adding value to all projects.
The Quest Perth Ascot main transfer slab was poured in January 2020 and fully completed by August of the same year, equating to an impressive eight-month build.
For more information visit www.mconstruction.com.au.