Minister for Planning Matthew Guy says that Melbourne is going through the greatest level of building, interest and growth “since the gold rush”.
Guy made the announcement last week in an address at a client function for national firm Moray & Agnew.
“I have approved 90 buildings in the central city areas since coming into government…and there are more than 70 outstanding applications still to be dealt with in the next few weeks,” he said.
Moray & Agnew is one of many of the firms that have enjoyed the flow on effect of such a busy environment, and its construction practice has experienced a massive 400% growth in work over the past five years.
The firm now has 15 lawyers working exclusively in front end construction and construction litigation, says the Melbourne managing partner and head of construction, Bill Papastergiadis.
“There are a number of reasons for the growth,” he told Australasian Lawyer
. “One is the availability of land – Melbourne is one of the few cities in Australia that is not landlocked…the second reason is we have a very proactive planning minister at the moment that facilitates planning approval.”
Foreign investors also play a significant role in Melbourne’s building growth because they feel comfortable investing in such a multicultural centre, he says.
Papastergiadis puts Moray & Agnew’s ability to take full advantage of the booming market down to the construction team’s increased profile during the GFC, a time he says that on contrast many other Melbourne construction practices were shrinking.
This unusual move was partly a conscious decision of the firm, but also due to the strength of Moray & Agnew’s construction litigation team and the nature of its clients.
“In a transaction slow down there’s always an increase in litigation. It went quiet in one area but ramped up in another,” Papastergiadis says, adding that the firm is on a number of construction and PI panels including the Builders Warranty Scheme, which gave it a buffer during the tough times from a transaction point of view.
“It meant when the boom hit we had the resources to hit the ground running…Growth is phenomenal. Moray & Agnew in Melbourne has I think for a couple of years been the fastest growing firm in Victoria, and a large part has been through our construction and property and planning areas.”
And the firm’s “cradle to grave” model means it generally holds on to the clients all the way through the construction process, he says.
As well as the firm’s strategic position in the market; Papastergiadis says a good client base, team spirit and promotion of lawyers to partnership internally has solidified growth and seen losing a lawyer to another firm become a “rarity” over the past five years. Staff turnover rates currently sit at about 7%.
He doesn’t foresee a slowdown in Melbourne’s property growth in the near future, and says Moray & Agnew will continue to pursue the “best lawyers we can find”.
In the past two years it has recruited a property partner, four property lawyers, a planning partner, two planning lawyers and two construction lawyers.
The appointment of a new construction partner is soon to be announced.
Baker & McKenzie is another firm revelling in the growth of the Melbourne market. Partner and head of the firm’s Australian construction practice, Anthony Whelan, told Australasian Lawyer
that the development of major high-rises and retail areas, as well as an influx of foreign investors, has been spurring business.
Other cities in Australia are also experiencing this phenomenon, he says.
“It gives opportunities for more work, and not just construction. It’s the whole property, construction and finance space…in the past year we’ve done a lot more Melbourne-centric construction work. It will continue – there are a lot of projects still going to happen in the future. It’s not abating anytime soon.”
Whelan says in response to the boom, Baker & McKenzie will be looking to increase the size of its property and construction group to service the demand.