Archive | Margins

Greenland & Golden Horse start 1400-apartment job on old Goodman industrial site

Chinese state-owned developer Greenland Group & Golden Horse Group of Hong Kong turned the first sod on Thursday for a 6.9ha 1400-apartment joint-venture project at Erskineville in Sydney’s inner-west, on a former industrial site which Goodman Group sold to Golden Horse in 2014.

Construction partner for stage 1 of the Park Sydney development is local family-owned builder Richard Crookes Constructions Pty Ltd, which has worked on several Greenland projects.

Image above: Park Sydney masterplan, highlighting amenities.

The masterplanned residential community will be developed in 5 stages and will ultimately feature 9 development blocks ranging in height from 2-8 storeys.

Park Sydney, 4km from Sydney’s cbd, will have a 7446m² public park, a supermarket & specialty shops, a fresh food precinct, eat street, medical centre & childcare centre.

Greenland Australia managing director Sherwood Luo said: “Together with Golden Horse Australia, we’ve been planning Park Sydney since 2016, so it’s particularly exciting to see major projects of this scale starting to take shape and watching how they transform the local area.

“We are converting this large former industrial precinct into an engaging & inclusive residential community that will ultimately become home to some 3000 residents.”

The value to Goodman of its exit

Golden Horse Group expanded into Australia in 2013 and bought the former industrial site in Erskineville from Goodman Group the next year. For Goodman (owner of NZX-listed Goodman Property Trust’s management company & cornerstone investor in the trust), that deal was among many as the group sold $A1.9 billion of mostly industrial assets in a year, and reinvested the lot to generate higher development returns.

Builder with long list of staff support programmes

On a different tack, the builder on this project has a lot to say about how it treats its staff – an eye-opener at a time the New Zealand construction sector has been grumbling about contract arrangements, and this government (like the last one) is talking about increasing training for & numbers in the construction industry.

Richard Crookes Constructions says on its careers page: “RCC believes the success of every project depends on the ability of their personnel and the synergy of the project teams… RCC’s business is based on maintaining long-term relationships with clients, partners & subcontractors.”

It also lists a number of staff-supporting views that I’m sure would be novelties if espoused in New Zealand:

  • We build a talent pipeline
  • We expect our staff to engage in the business and be part of its success, growth & evolution. In return we invest in their growth & development. We give people autonomy, support & the resources they need to perform at their best
  • We maintain a flat management structure with an open door policy and an honest & collaborative culture
  • Fitness passport gives individuals & families access to multiple facilities (gyms, swimming pools) which allows you to go as often as you like
  • Exercise incentives, health assessments, mindfit programme, access to trainers, $A100 annual rebate & annual flu vaccinations
  • RCC offers corporate rates with BUPA to all employees in an effort to encourage healthy lifestyles
  • Every employee receives one day off every 6 months – employees are encouraged to use the leave for engaging in health & wellbeing activities, spending time with family & friends or to relax
  • Each employee has the ability to purchase an additional 2 weeks of annual leave/year
  • Maternity & paternity leave is offered when members of the RCC family start or expand their own families
  • We would like your salary to work as hard as possible; for this reason, we offer salary packaging options such as novated leases (a lease arrangement, usually for a vehicle, where the employer takes on the obligations of the lessee to the financier, which ceases if the employee leaves the job)
  • Our staff can access a range of discounts from partnering retailers
  • RCC has a financial advisor in-house who is available to meet with staff one on one
  • We believe in & support females at RCC; one of the programme offerings is our women’s leadership lunch & learns
  • We offer an array of learning & development for our employees through coaching sessions, formal mentoring programmes, external training, role-specific technical training & leadership development programmes across all levels.

Links:
Park Sydney
Greenland Australia
Golden Horse Australia
Richard Crookes Constructions

Earlier story:
17 August 2015: Urban renewal lifts Goodman Group

Attribution: Joint venture release, Greenland, Golden Horse & Richard Crookes websites.

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UK accountant says contractors’ margins too tight

Contractors should demand higher profit margins from clients for their work, the head of construction at PricewaterhouseCoopers LLP in London, Jonathan Hook, wrote in the construction finance report published by the UK Building magazine this week.


His argument was sparked by PWC research that showed the profit margin of major UK contractors averaged 2.4% in 2003, almost identical to the previous year. Housebuilders’ average margin was up 1.5% to 17.1%.


Return on capital employed among UK contractors dropped from 166% to 112%.

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