The construction sector is still struggling, but that has not stopped a raft of confident international players descending on Australia looking for action.
International construction conferences this week in Sydney, Melbourne and Healesville show the overseas interest in Australia, according to Ian Briggs, head of Minter Ellison’s national construction, engineering and infrastructure industry group.
Mr Briggs said Australian construction had not yet fully recovered from the global financial crisis. There was a lack of funds and quality developments on offer. ”A number of larger construction companies are reweighing their porftfolios away from CBD high rises. It’s hard to compete, they are carrying large overhead structures, and are not as nimble as smaller companies,” he said.
They were more interested in large civil public works programs - particularly the big mining and gas projects - not the ”CBD bread and butter”.
Minter Ellison partner and construction lawyer, Phillip Greenham, said the long-term trend was for CBD construction to pick up. ”Demographics will still drive residential apartments, but funding is a constant challenge,” he said.
Mr Greenham said a second driver for CBD activity would be ”green” buildings. More than 80 per cent of buildings were more than 10 years old, and would have two stars or less in NABERS rating.
”The time will come when the demand for tenants will be for a rated building. Non-rated buildings will generate lower rent. This will drive significant refurbishments of buildings to bring them up to green star rating standard.”
Mr Greenham said the carbon tax would push up the cost of building materials, creating a financial incentive to refurbish because old buildings would not be subject to the extra carbon costs.
The budget was neutral in terms of sustainability. ”We are not yet seeing any new regulatory or budgetary support for green buildings. For the time being the momentum towards sustainable construction practices is being left to the marketplace,” he said.
The Australian Industry Group construction index this week highlighted the short-term issues: poor demand and subdued workloads pushed the national construction sector further into the red in April. Engineering construction was the only resilient sector due to resource projects.
