11/09/2019 - 15:41

MGroup in-house build bonus

11/09/2019 - 15:41

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Commercial and residential developer MGroup is confident it can avoid any scandals around building defects, largely because of its decision almost a decade ago to establish a construction division to carry out its own works.

MGroup in-house build bonus
Michael Read says the establishment of MConstruction has accelerated MGroup’s growth. Photo: Gabriel Oliveira

Commercial and residential developer MGroup is confident it can avoid any scandals around building defects, largely because of its decision almost a decade ago to establish a construction division to carry out its own works.

Established as Match by managing director Lloyd Clark in 2001, MGroup has since evolved from boutique apartment development to offer a full suite of property services – from sales and finance through to project management and construction.

However, it was the move from developer to developer-builder in 2010 that MConstruction director Michael Read said was something of a rarity in Perth, with most developers preferring to engage third-party builders.

Mr Read said it was much more common for Western Australian construction firms to branch out into development, with some of the state’s biggest builders, including ABN Group, BGC Australia and Pindan, having complemented their core operations with development divisions in recent years.

“I don’t know why a lot more developers don’t set up their own construction arms, they may see it as increasing risk,” Mr Read told Business News.

“Whereas we see more benefits through actually mitigating risks and having better quality controls and finishes during the process.

“By having an in-house builder, you get all the costing and programming in-house, as well as the detail in how to build a job as well.

“We have learned over the period of time what type of structures work best for us and how to get better quality finishes.

“A lot of builders are stuck in their ways, but we have embraced new technologies and new things.

“It also reduces time, because you’re only negotiating with yourself and you can rely on in-house experience to say ‘this type of site will need this type of crane’ or ‘it would be faster or better to utilise this form of construction materials’.”

Mr Read said establishing MConstruction had helped MGroup grow at a faster pace, with the company’s “sweet spot” of projects being in a range of $10 million to $20 million.

He said MConstruction was initially introduced to improve building quality and maintenance of MGroup’s apartment and commercial projects, however, the company’s pipeline of work was now 50 per cent populated by third-party projects.

Major projects currently under way include a Quest apartments hotel in Joondalup, which is nearing completion, another Quest in Ascot, which has just begun construction, and a Bunnings Warehouse property in Albany.

MConstruction’s capabilities also extend to luxury homes, while the company has done work for Curtin University, Spotless, several state government agencies, and local government authorities.

“Our preferred model is as a developer-builder, with the option to give our clients the benefit of a developer’s model,” Mr Read said.

“We can mitigate risks, give a high-quality product and finish and assist with value engineering.

“Value engineering doesn’t just mean saving money, when things are over-engineered we can bring them down to something more realistic; but it can go the other way, too, where things are under-engineered and we can show why and where it needs to be increased.”

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