A survey by the NZ Chinese Building Industry Association shows Chinese-owned developers have completed an average $200 million/year of projects since 2010, and their forward plans are for another $10.7 billion of projects.
In a sector marked for decades by boom/bust tidal waves, the association’s president, Frank Xu, said the projections were exciting because they marked a huge opportunity for Kiwi companies to develop a pipeline of work.
To achieve that better outcome, Mr Xu said Chinese & local construction sectors needed to collaborate more: “It’s no secret that there’s immense pressure on the construction sector in New Zealand at present to deliver new homes, office space, hotels & facilities to accommodate the population growth, all at a time when the industry is facing real constraints in labour & materials.”
“With margins being squeezed, there is a constant need for developers to look for ways to improve productivity and lower costs, while maintaining quality & safe working environments.”
26 developers surveyed
Ahead of a conference looking to grow ties between New Zealand & Chinese construction sectors, a survey by the Chinese association examined investment by 26 property development companies and asked submitters to forecast a future pipeline.
It found $1.775 billion of projects by Chinese-owned developers had been completed in New Zealand since 2010 – 84% in the residential sector, 90% in Auckland. 12% of developments were in the commercial sector, 4% industrial.
The survey showed these companies had $2.156 billion of projects underway now, a list that includes the Park Hyatt Hotel by Fu Wah International on the Wynyard Quarter waterfront in Auckland and the $300 million 690-unit SugarTree Apartments by the Nelson St motorway offramps at the top of the city centre.
The surveyed developers indicated plans for 2.565 million m² of gross floor area over the next 7-8 years, equating to $10.69 billion of investment, again, mainly in the residential sector.
“What the survey shows is now, more than ever, there exists an opportunity for partnerships & co-operation with Chinese companies in New Zealand to work with local industry to produce world-class developments,” Mr Xu said.
“To facilitate this, we will again be hosting the NZ International Property & Building Expo & Summit this year to help build links, gain unique insights, share knowledge and, most importantly, inspire the innovation the sector needs.”
Last year the expo attracted 120 major industry exhibitors and close to 10,000 visitors over 3 days. This year the association expects the expo, at the Vodafone Events Centre in Manukau on 16-18 August, to attract even more companies & visitors.
First steps to collaboration: Conference, then regulatory updates
Mr Xu said events like the conference were just the start of the industry collaboration required. Changes to the regulatory frameworks were also key.
“A significant step has been the signing of the construction sector accord and the launching of public consultation on the proposed reforms in the Building Act. These initiatives mark a much needed sea change in the mindset of the authorities. They signal a clear intent that they are serious about looking at the outdated legal provisions in the building codes such as those related to prefabricated & modular buildings and BIM (building information modelling).
“With some fresh thinking in this space, combined with more collaboration between China, New Zealand & Chinese New Zealanders, there’s every chance we can put this country’s construction sector on a high growth path again.”
Attribution: Association release.