The media is awash with stories about apartment developments falling over or asking for more money. We’ve all heard about banks shutting up shop and the desperate need for more houses hampered by the chronic shortage of labour, material delays and their fluctuating prices. Residential developments have been hit the hardest but commercial projects are not immune to these pressures.
The market is not in a competitive state and it’s become a lot harder to secure the main contractor your project needs. There’s now a premium for doing so but it’s about having a pallet for that premium. Your entry price might be higher but your exit price should be better managed. There’s no escaping the fact that building in this market is going to cost you more money and your margins will be affected. However, that doesn’t mean you can’t deliver a successful, financially viable project.
Amidst all of this, our message is a simple one: get your feasibility right and you start to mitigate project risks. With the right structures in place developers can minimise the effects of the current market situation. By carrying out comprehensive due diligence and feasibility processes, engaging a reputable main contractor, with good relationships with sub-contractors, and securing a lump sum price you go a long way to locking in a reliable project delivery. Employing a competent quantity surveyor is crucial part of this process.
It’s clear that we all have to work a lot harder to get projects across the line in this environment and what worked in the past isn’t necessarily going to work today. Staying ahead of market trends has never been more important and at White Associates we’re always trying to do that. We’ve taken a real forward thinking approach in the last couple of years and restructured the way we operate. Looking towards the future we have brought in three company principals to ensure we have a strong succession plan in place. As the industry evolves we’re adapting and growing to strengthen the areas that allow us to add the most value to projects.