At 177 High Street in Christchurch’s city centre is a magnificent new version of what was once described as one of the most architecturally beautiful buildings in the city.

The historic Billens Building, built in 1906 and originally called England Bros House, was destroyed by arson in 2012 leaving the building, along with the hearts of locals, in ruins.

It had been described as a masterpiece and was a cherished part of the city centre. For that reason, Sean Stockman of the Stockman Group Limited, took it upon himself to restore the old girl to her former glory. Construction was completed earlier this year and the end result has seen Sean and the team that pulled it all together being heralded as heroes by the local community.

White Associates provided bank funding on the development and Director Darin Bayer says the end-result has really struck a chord with locals, and for good reason.

“We have a huge admiration for the Stockman Group’s dedication to celebrating the city’s historic roots. Through their meticulous attention to detail they’ve managed to create a spectacular new, art-deco building that really has that heritage feel.”

“I’ve been involved in construction for 25 years and I’ve never seen a better finish on a commercial building. I was blown away. The contractors, Canform Structures, have done an amazing job.”

“We’re really proud at White Associates to have been involved in such a well-managed and executed project.”

The new Billens Building will have four boutique tenants on the high street while the upper floors will have multiple offices catering for one to five people along with a number of meeting rooms.

Be sure to pay it a visit next time you’re in the area!

Fletcher Building’s woes are well documented but what effects are they going to have on the rest of the construction industry? Here’s our take on how the ripples will be felt for some time to come…

When this country’s biggest construction company announced in February it would stop bidding for any big, new commercial projects, it represented a seismic shift in the landscape of the industry. It followed the last two sets of astonishing financial losses which while surprising to some, came as no surprise to others. We, like others, warned of the perfect storm brewing last year that was eventually going to take down a major player.

There’s a lot of uncertainty in the market at the moment. Now that we know Fletchers won’t be bidding for any new work, here are the big questions surrounding the industry.

• Who’s going to fill the void?

When large projects come up, which contractors will bid for them? The questions around capacity are intriguing. Fletchers was long seen by many as the default option for big projects and now that’s gone. Will it be the existing top-tier ones or will we see a mid-tier contractor expand and move up the ranks?  

We’re already seeing that overseas contractors are finding New Zealand appealing. With Australian and Chinese contractors already operating here, we will see them expand and potentially have more offshore players setting up camp here. It will be interesting to see what impact that has on the culture of the industry and the level of responsibility foreign contractors are willing to accept.

• Will contracts come under increased scrutiny?

In recent weeks we imagine just about every contractor in the country will have been reviewing the contracts they’ve committed to – trying to unearth any cost liabilities they may have initially overlooked. With all the amazing people they had and the wealth of resources available to them, if Fletchers could get it so horribly wrong you’d have to imagine there will be other contractors out there who may have got it wrong as well.

When making new bids and reviewing new contracts put on the table, contractors will really be putting them under the microscope to a whole new level. There’s been a feeling amongst contractors for a while that too much responsibility is being put on their shoulders. The Fletchers case may well prove to be a watershed moment for the industry that sees contractors become even more particular about the contractual terms they’ll agree to which may also require changes to the regulatory environment.

• Will design and build’s popularity decline?

Given that contractors aren’t going to be prepared to accept the same levels of risk that we’ve seen, the future of design and build comes into question. Under design and build the weight of responsibility falls largely on contractors and in the current climate many will take the position that it’s just not worth the risk. I think we’re moving back to centre ground and how things always used to be done whereby the client is in charge of the design and the contractor is responsible for the build.

What all of this points to is an even more pressing need to have a QS on board who is going to robustly challenge costs and variations.

Cost certainty

So for those project sponsors that had previously tried to shift as much responsibility to their contractor as possible, they’re now faced with the challenge of achieving project cost certainty in a constrained, low-risk appetite environment.

Engaging external comprehensive cost management services, and doing so early, is the best way to give your project the financial confidence it needs. For many of our clients at White Associates, the cost estimates we provide can often come as a bit of a shock. But they soon find out these are realistic appraisals and that we were absolutely right in our assessment. Finding out early gives you the ability to make informed decisions to keep your project within your chosen budget, avoiding cost blowouts further down the line.

Any competent cost planner should be able to accurately forecast costs in the current market, not last year’s market. There’s talk in the industry at the moment of tenders coming in over budget. That should never happen. Full stop.

So if you want to give you project financial confidence from day one, have a chat to us at White Associates about what we can do for your project. Email us at: info@whiteassociates.co.nz

 

An exciting new project is underway that’s set to attract thousands of people to the western end of Christchurch’s retail precinct.

Riverside Farmers’ Market will be a high-end retail development on the site of the Re:Start Mall -bordered by Cashel and Lichfield streets and Oxford Terrace. It will include a farmers’ market, restaurants, food stalls and retail shops.

The development by Peebles Group and partners Kris Inglis and Mike Perkasky is going to become a hub for events in the city as farmers’ markets in central business districts around the world continue to grow in popularity as people turn to healthy eating of local produce.

Investor Richard Peebles says he’s wanted to do a farmers’ market in the city for a long time but finding the right location had been difficult until the Re:Start site and surrounding land became available through Crown company Ōtākaro.

Richard explains;

“The way I see it, there is nothing else in the city that’ll attract people like a market will. The footfall produced by a market is unrivalled, which means that surrounding businesses also win – and nothing attracts people like people.

“The markets also offer the ability for small businesses and entrepreneurs to essentially incubate their businesses – barriers to entry are low,”

A buzzing attraction to light up Christchurch

The farmers’ market will house around 30 ‘ready to eat’ vendors alongside around 40 stalls offering local produce such as fresh fruit and vegetables, baked goods and flowers.

The combined development will also include 15 high-end fashion and retail tenancies, four mezzanine floor hospitality opportunities and an open roof top bar. There will also be a roof top outdoor area and a large internal seating mezzanine floor above the market.  Outdoor seating will spill onto Oxford Terrace, which is being paved and pedestrianised, to create a lively and engaging destination for locals and tourists alike.

White Associates has been providing bank funding representation for the Peebles Group for this development. White Associates Director Darin Bayer says he’s thrilled to be involved in such an exciting and transformational project.

“This development will be testament to what can be achieved from incredible vision, thorough planning and a strong commitment to providing the Christchurch community with an outstanding new precinct,” says Darin speaking of the Peebles Group.

Enormous impact on Christchurch

The development is going to be great news for Christchurch and the developer Richard Peebles says it’s going to be a hub for events in the city. A riverside area will host weekend arts markets and events such as night-time festivals.

Richard says there will be around 18,000 people working within a small radius of the market, meaning it will become a staple morning, lunch and dinner time destination and the place to get fresh produce and specialty meats for dinner on the way home.

Peebles Group has been involved in several other central city projects, such as the McKenzie and Willis development on High Street and a three storey build on the Hereford end of The Terrace that will house bars on the ground and first floor and office space at the top.

“It’s great to be part of the building momentum.  The city is really beginning to take shape and the next 12-18 months are going to be fundamental to the ongoing transformation. The CBD is going to be far more densely populated compared to pre-quake, which is going to make everything a lot more lively and active,” says Richard.

Construction is now underway is expected to be completed towards the end of this year.

White Associates would like to sing the praises of one of our own – quantity surveyor Justin ‘Balboa’ Bearne who raised more than $3200 for Cure Kids after taking part in a corporate fight night recently.

After months of training, Justin emerged victorious from the bout held at the Langham Hotel – much to the delight of everyone from White Associates, especially those of us in attendance.

More important than the win though was Justin’s dedication to supporting Cure Kids and its vital child health research.

Ringside NZ takes mild mannered corporates, both guys and girls, and transforms them into professional fighters – all in the aid of a good cause. All of the fighters on the night were raising money for Cure Kids and together raised more than $56,000 – with Justin being one of the top contributors.

“I really wanted to make a difference. I’m inspired by the work of Cure Kids and wanted to support them by raising money as part of my participation in Fight Night 2017”

As part of the initiative, all of the fighters involved had Cure Kids Ambassadors, Justin met his recently – a young girl named Addison who was diagnosed with a heart defect in 2012. Addison has undergone multiple surgeries to combat a staph infection. Unfortunately the infection caused damage to her heart, which means she will likely need more surgery to correct her condition as she grows.

All of us at White Associates are incredibly proud of Justin for all of the hard work he put and for spreading the word about Cure Kids and the amazing work they do for kids like Addison.

Thanks for doing us proud, Justin!

Work is set to begin on the construction of a new 20-bed Management Unit at Christchurch Men’s Prison, following the appointment of Naylor Love as the main contractor and White Associates to provide QS services for the project.

The unit forms part of the Department of Corrections’ Prison Capacity Programme, which is all about creating fit-for-purpose facilities that add capacity across the prison estate.

White Associates Director Konrad Trankels says:

“We are excited that the main contractor has been procured and that Naylor Love is about to commence on site. It’s great to be working with them – the project is in good shape moving forward.”

By Graham White

Never in my 40 years in the construction industry have I seen contractors be as selective in the work they choose to take on as they are now. Just getting a contractor interested in bidding for work can be a challenge in itself.

The onus is now on developers to come up with more attractive propositions and consider alternative forms of procurement.

Piquing contractors’ interest

A year ago it seemed that contractors had the desire and the capacity to undertake new projects. Finding a contractor was relatively easy: you could go out to market and get several good, competitive bids.

Today however, many are suffering the consequences of overtrading last year and are struggling with resources – both internally and externally. We’re finding a lot of projects are under pressure as contractors battle to meet programme dates and quality standards. As a result, they’ve become very particular about which new projects they take on, and they are turning down large volumes of work.

The solution?

When we talk to contractors, they tell us that they’re busy, but they also say that if you come to them with a good proposition they will be interested. So what does ‘a good proposition’ involve?

1. The ability to negotiate – Go and talk to contractors. And do it early on. If it’s just a straight out negotiation, they’re more likely to be interested.
2. Minimal tender effort – Contractors make money when they’re building, not spending time and money tendering against three other firms for a project that might not eventuate. And from a developer’s standpoint at the moment, for many projects it can be too risky to spend money on going to tender only to find that not enough contractors want to bid for it, the prices aren’t competitive enough or contractors withdraw during the tender period.
3. A reasonable budget and timeframe – More so than ever, contractors are putting project budgets under the microscope, asking themselves if they will be able to make enough money on a job. They’re paying more for materials and for staff – both to get the resources they need and hang on to the resources they have. If the budget isn’t there and the timeframes are too tight they will just pick another project over yours.
4. Funding already in place – Get funding upfront so that when you speak to contractors you can reassure them that funding in place and that the project will definitely go ahead. Come and talk to us at White Associates about how we can help you do your due diligence to help strengthen your bank funding application.

Selecting a contractor in a strong financial position is particularly important given what we’re hearing…

Protect yourself from the black cloud looming over the industry

Several industry experts believe a perfect storm is brewing and it’s just a matter of time until a relatively big player – or players – in the construction industry go under.

The flow-on effects from a contractor, or subcontractor, going into receivership could have catastrophic effects for some developers.

This is why at White Associates our payment policies have so many qualifications to make sure our clients never pay for work ahead of progress. Every month, before we sign off payments for contractors we ensure onsite inspections and quality checks by design consultants have been carried out so that the work our clients are paying for has been completed to spec.

Engage QS teams to make informed decisions

All of this highlights the importance of having skilled quantity surveyors on board to help engage the right contractor for the right price, control cost and minimise risk.

As one of New Zealand’s leading quantity surveying consultancy firms, we’re in a unique position at White Associates to offer solutions to help developers navigate what has been described as the most dangerous time in the current construction cycle.

If you have a project you’d like to discuss with us, please feel free to get in touch on (09) 362 0624 or email info@whiteassociates.co.nz.

We’re all acutely aware that it costs significantly more to build today than it did a few years ago, or even a few months ago for that matter. The rising construction costs driven by material delays, material cost increases, labour shortages and building consent delays across the country are well documented.

However, on average, insurance providers only increase your sum insured 3% per year. We’ve been carrying out insurance reinstatement estimates for some of our commercial clients recently and have unearthed a significant disparity between what a property is insured for compared to what it would cost in today’s market to rebuild. Alongside rising building costs, there are a number of components in the construction process that need to be taken into account.

We’re getting to the time of year when a lot of organisations’ insurance policies are up for renewal.

White Associates Director Darin Bayer says if you haven’t had an independent insurance reinstatement estimate, it could be worth doing so.

“It gives you the peace of mind to know that should some unforeseen event damage your organisation’s assets that your insurance settlement will be enough to sufficiently cover your rebuild costs. This way, you’re not left out of pocket.

“We do work with a range of large organisations and body corporates to ensure that construction cost escalation is reflected in their insurance policies. You want to make sure that you will get what your property is worth.”

A White Associates insurance reinstatement estimate covers everything it would cost to rebuild your assets including the likes of demolition, building consent fees and material increases. The report provided can then be supplied to your insurance provider to ensure your policy accurately reflects your assets’ worth.

For more information, please contact us on (09) 362 0624 or email info@whiteassociates.co.nz

Ground has recently been broken on a new building at Mount Eden Correctional Facility (MECF) following the appointment of Leighs Construction as the main contractor.

The Department of Corrections recently confirmed the appointment after obtaining approval from the Minister of Corrections and Minister of Finance. The work we’ve been doing with the Department included a comprehensive evaluation of the tenders received and financial recommendations to ensure the project is delivered on budget, on time and meets the project’s objectives.

White Associates Director Darin Bayer says the appointment of Leighs Construction bodes well for the project.

“It’s been a real collaborative effort between the Department of Corrections, White Associates and Leighs Construction. To have got to this point so quickly where ground has now been broken is a really positive sign and puts the project in good stead moving forward.

“We are also excited to be working alongside a great consultant team of OPUS International Consultants, Holmes Consulting Group and Beca.”

The new building will provide accommodation for an additional 245 prisoners and forms part of the wider Prison Capacity Programme which includes increasing the capacity of Northland Regional Corrections Facility.

Feature image above is the front entrance to Mount Eden Corrections Facility, courtesy of The Department of Corrections