Shaping the Melbourne Skyline

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-By Claire Suttles

In the midst of a construction slowdown, Buildcorp Commercial is busy remaking the Melbourne skyline and drawing record profits. What is the secret to the company’s remarkable success? “We aren’t your average builder,” Director Scott McVilly explains. “We are mindful that it is a very competitive industry and we aim to set ourselves apart from the pack.” Unique development capabilities – along with a solid commitment to clients, subcontractors and employees – give the company a leading edge.

Mr McVilly and Director Ross Clarke founded the company in 1995. “I guess we started off with humble beginnings,” Mr McVilly remembers. “Our first job was worth about a million dollars and our first year of turnover was about two and a half million.” Today, the company has an annual turnover of over $150 million and boasts a development arm in addition to its building division. “I can’t emphasise enough how important [it is that we are] wearing the builder’s hat and the developer’s hat,” Director Ashley Levin reports. “That really does set us aside from our competitors.” Through their development expertise, the team “adds significant value to [the client’s] bottom line.” Buildcorp can advise and guide clients through all stages of a project – from preliminary planning, to the design and building process, all the way through completion.

Five years ago, Mr Levin was so impressed with Buildcorp’s competitive advantage that he joined the team. As a key player in many of Melbourne’s highest profile building projects, he had been heavily recruited by other companies – and turned them all down. Mr Levin explains that, while a number of companies “consider themselves developers, they really don’t have the developer expertise and can’t offer the same value to clients. No competitor comes close in that regard. And that was the one thing that tipped me over the edge to come here.”

With a history of regularly building in the $100 million plus range, Mr Levin brought a high level of expertise into the new relationship as well. Mr McVilly calls the newest director a “very strong catalyst in the growth of our business,” and reports that Mr Levin “gave us the confidence to procure larger projects to the point where we are now building jobs with a construction cost of $70 to $80 million per project.”

Buildcorp specialises in commercial and multi-residential construction. In the past, the firm focused on office buildings and educational facilities, and has recently begun to work more heavily in multi-residential construction. In addition to several significant retail projects, Buildcorp has plans to build over 1,500 apartments over the next two years. The company recently completed the 158 unit, $47.5 million Pinnacle Apartments at Doncaster. The 12 story tower is the tallest building in that area of Melbourne, and is already an iconic feature of the local skyline. Mr Levin reports that previous development plans by another firm were “unsuccessful,” but that Buildcorp was “able to turn an unfeasible project into a feasible project.” Mr McVilly explains that, while Buildcorp was not the developer for the project, the team’s development expertise was invaluable. “The developer came to us with a marginal project and… we improved the apartment yield by 40-odd apartments and made it a viable project for the developer [and] we ended up with a very economical build cost.” Furthermore, the developer only spent $50,000 on variations – a fraction of a per cent of the total budget. “Typically, a developer would allow five per cent of their construction cost for contingency, so he would have had 2.4 million embedded in his feasibility,” Mr McVilly explains. “That [unspent contingency budget] reverts to development profits.” In addition, the company completed the project five months ahead of schedule. “We had an extremely happy client,” Mr McVilly summarises.

One of Buildcorp’s most notable current projects is the $110 million Vantage Highett retail and apartment complex. The team is developing and constructing 130 apartments over a 4,300 square metre Woolworths supermarket, a Woolworths Liquor, and around 2,000 square metres of specialty shops. The company has partnered with Woolworths in the development of Vantage Highett, and with a very successful outcome in sight, the team is “optimistic that future joint ventures” with the retail giant will result. The project has had its share of challenges, however. “We are building on every square inch of the 11,000 square metre site,” Mr McVilly explains. Furthermore, “We had power lines on the two street elevations and there were delays in getting the power lines underground so we had to innovate in terms of how we built it.” The team planned carefully and made up for delays. “We fast tracked certain areas,” Mr McVilly explains, and managed to keep productivity levels high. In spite of the constraints, construction is now “well ahead of program,” and is likely to be completed two to three months early, by May of next year.

Buildcorp is highly committed to its clients, subcontractors, and employees, which, Mr Levin says, leads to “a win-win outcome” overall. “We really make [client] satisfaction our priority,” Mr McVilly adds. This dedication also benefits the company “because our reputation is the reason we get projects… so even at the expense of our bottom line we make sure we get 100 per cent customer satisfaction.” Maintaining strong relationships with subcontractors is also key. Again, this commitment leads to a “win-win outcome” because, as Mr Levin explains, “We need them to be successful so that they survive and are around for the next project. By having a good relationship and a trusting relationship they perform well for us. So when we need them to go that extra [step] they are prepared to do it because of that relationship.” As an example, Mr McVilly points out Buildcorp’s payment policies. In contrast to standard payment schedules, the company pays some subcontractors weekly, “particularly those that are labour intensive where they have a huge wages bill every week. We help them out because we see them as partners in the project.” Mr McVilly also believes that quicker payments encourage subcontractors to put more men on Buildcorp jobs, rather than on competitors’, contributing to the company’s ability to finish jobs ahead of schedule.

Mr McVilly reports that Buildcorp promotes from within because the team believes in “developing our own talent instead of importing it.” The directors aren’t looking for “aggressive growth” made possible through acquisitions or outside recruiting. Instead, Mr McVilly explains, “We employ smart people from a young age and train them up… We try to give them a high degree of autonomy and empower them to take on responsibility and become leaders in the industry.” Buildcorp also incentivises staff by inviting them in as equity partners in some of the company’s developments, allowing them to “make improvements in their net worth rather than just working for wages.” Investing in employees is also part of a long term strategy. “We cut them in on a couple of deals,” Mr McVilly explains, “because that is part of the succession planning as well.” Future company leaders need to “understand how to put a development deal together and understand how to design and build a very cost effective building. So it’s part of their training.” Mr McVilly adds that these employee benefits have led to a “generally happy staff” and high levels of retention. “It’s not the sort of training that they would get from any other organisation that we’re aware of in the Melbourne construction industry,” he explains.

Buildcorp has enjoyed continued success in spite of a “tightened” Melbourne construction market. “There have been a significant number of builders and sub-contractors go into liquidation over the past 12 months,” Mr McVilly reports. But, with numerous high profile projects in the pipeline, the team isn’t concerned. “We actually see it as a bit of a shake out,” Mr McVilly explains. “There are going to be fewer competitors around in 12 months than there are currently.” Business is going so well, if fact, that Buildcorp is currently investing $1 million into remodelling its own headquarters. “It is an investment in our branding and an investment in our staff,” Mr McVilly says. The result will be a “contemporary, pleasant environment to work in” and a showcase of the team’s construction ability.

The company plans to maintain, and increase, its turnover and profitability by staying focused on the Melbourne construction market. “We are not interested in moving interstate and losing our influence,” Mr McVilly explains. “Margins are fine enough as a contractor and we don’t want to trip up by not knowing our market and not having adequate control.” Instead, the team will stick to existing strategies. “We’ve relied on doing an outstanding job on the project and word getting around,” Mr McVilly says. Mr Levin reiterates, “We really do offer something that no other company offers.”

Home Automation

Call it ‘domotics,’ and you are likely to receive a blank stare, but refer to it as ‘smart home’ or ‘home automation,’ and you will get a nod of acknowledgement. For the past few years, consumers have heard the word ‘smart’ attached to countless products and services, from food and drink to snacks like popcorn and mobile phones, which no one seems to refer to as a ‘cellphone’ anymore. Yet what, exactly, constitutes ‘smart’?

July 27, 2021, 3:32 PM AEST