Architects optimistic about 2011 building prospects

Building and construction activity picked up in November across the whole country, and saw an 18% rise from October, construction industry researcher Pacifecon says.

A total of 114 projects worth over $5.0 million in individual value were reported (not including earthquake damage).

By ownership, 42 were privately funded and 72 in the public sector. There were 23 at the planning stage, 62 out to tender and 29 had reached the contract stage or were about to start. Of this overall total, one was national, 62 were located in the upper North Island (down to Taupo), 24 in the lower North Island (below Taupo and including Gisborne) and 27 in the South Island.

However, by stage, private predominated by 13 to 10 in planning, the public sector outnumbered private by 33 to 13 at tendering, while the two sectors were 13 for public & 16 for private for all commencements.

Building consent statistics released last week indicate the current level for non-residential activity is 8.8% lower than the peak in the December 2008 quarter.
Pacifecon confirm that commercial buildings were the largest contributor to this fall in building activity.

However, Pacifecon says there is a growing sense of optimism among architects about prospects for 2011. This is backed up by the trend for the volume of non-residential building activity increasing for the past three quarters.

Building activity in Christchurch has thus far consisted of demolition, geotechnical assessment and loss adjusters being appointed – with only a fraction of the projects at the commencement stage.

As late as last week the city experienced a 3.1 magnitude aftershock only 20km away. Pacificeon says while this is frustrating to the construction industry and property owners, it is not an unreasonable wait period.

It noted that work in the Pacific Islands has trended up due to international funding made available for various disaster relief projects and other developmental type projects.

In New Zealand companies are having to change strategy and chase after work in the lower price brackets as the bigger (over $5 million) projects are still on hold or difficult to fund. The upper North Island has seen more growth than the lower North Island and the South Island.

Some of the more noteworthy projects are:
Private
- The Crossing: Mixed use development in Highbrook Business Park consisting of an initial five buildings comprising 11 ground floor retail outlets, is now at marketing stage with work expected to start late 2011. $10m+.
- Evelyn Page Retirement Village has had building consent issued for an apartment block. $6.6m.
- Manukau Supa Centre: Large format retail centre consisting of 11 sites at marketing stage. Multi million dollars.
- Parkhill Apartments: 30 apartments in Howick, Auckland. Developer: Southside Group.
- Whangaroa Health Services Trust: At fundraising stage to upgrade and expand an existing health centre. ECC: $6 mill.
- Manfield Park: A land zone change needs to be passed to allow for sale of land for a subdivision to subsidise other improvements to Vehicle Circuit, Equestrian, Motorsport Centre & Polo Grounds. Developer: Manfield Park Trust.
Government
Spotswood College: Proposal for a rebuild of the college. $1ml.
Burwood Hospital: Business case been put to Ministry of Health to relocate older person’s hospital from Princess Margaret Hospital to a purpose built unit at Burwood Hospital.
NZ Police:
Looking at longer term options for new city headquarters in Christchurch as current building does not meet modern seismic standards for emergency services building.

Seven private projects are at tender in the upper North island. These include two apartment projects and tourist, retail and warehouse projects. Some 20 publicly funded projects (ranging from schools [four] to roading, prisons, carpark buildings, hospitals and sport facilities) are at request for proposal, tender or tender awarded stage.

Of note is the Queens Wharf Shed 10 where selected tenders closed last week for refurbishment of this historic building. It is intended for use as a terminal for cruise ships to be berthed for the Rugby World Cup.

There were five private projects for tender in the lower North Island – only one retail but Wellington retains a strong presence of apartment type projects when compared to other areas. There were six publicly funded projects – ranging from health to education & a sports facility. Only one private project, in Nelson, a new diagnostic medical centre was out for tender. There were seven publicly funded projects not earthquake related – of these only one was in Christchurch, a tender for conservation and refurbishment of the town hall.