executive impact

Lend Lease: Creating state-of-the-art buildings

1 Comment
By Chris Betros

With the Tokyo Olympics only five years away, a building boom is in full swing in Tokyo. That’s good news for Lend Lease, a fully integrated, international property and infrastructure group, headquartered in Australia and with a presence in nine countries. Lend Lease works with clients to design, build and manage the construction of properties. It also does a lot of telecommunications work, providing project management services specific to base station construction and the commissioning and integration of the associated equipment into networks.

In Japan, Lend Lease has worked on such projects as the Shiodome City Center, Oracle’s office building, the Merrill Lynch building in Nihonbashi, and some high-end retail outlets in Ginza, including Chanel, Bulgari and Tiffany.

Heading operations in Japan is Andrew Gauci who started his career with Lend Lease as an intern in 1991. He holds a Bachelor of Science (Building Construction Management) from RMIT University in Melbourne and is a fluent Japanese speaker with Level 2 Certification in the Japanese Language Proficiency Test. He was appointed managing director of the Japan business in December 2007. Since then, the company has grown to have over 500 staff across nine cities in the country.

Japan Today catches up with him at the Lend Lease Tokyo office in Akasaka to hear more.

How’s business?

There are always variances due to the cycles in the telecommunications and construction sectors. We look at it in five-year blocks and the last five years have seen sales grow 2 1/2 times. Fiscal 2014 was a very good year.

Where is the fastest growth?

In the construction secto, where we have recorded 20% year on year growth over the last 3-4 years. Have a look at the skyline; there are lots of cranes up, and there is a critical shortage of resources in industry.

How do you work with clients?

Say there is an owner who has some property they want to develop or they may want to build a new property. We help them select an architect, come up with designs, and then formalize a budget. After that, we move forward and help them select contractors and then monitor site activities on behalf of clients.

The old Japanese traditional business model was to dump everything with the contractor. Quality, schedule delivery and safety aspects are very good in Japan but you pay through the nose for it. Interestingly, the contractors prefer to have us on board to help communicate with the client. As the client is likely not to be an expert in technical construction issues, the contractors sometimes have key issues not addressed by the clients, which can lead to confusion, delays and extra cost. These costs could then be items of contention, which escalate causing serious project problems. Having a knowledgeable project manager working on behalf of the client means that these sorts of problems can be avoided. It’s a win-win situation for all, including the contractor.

What trends are we seeing now?

The main one is a sustainable building trend or eco-friendly offices. We are committed to clean building and office design so that clients can get LEED (Leadership in Energy and Environmental Design) certification. In fact, that accreditation is a big thing these days because many large foreign multinationals don’t allow their companies to move offices unless the building has been LEED certified. As far as lighting is concerned, LED is already standard and there is a demand for glass walls to provide natural light and help clients cut back on electricity. Compared to 50 years ago, running costs can be cut by about 50% because new buildings use a lot less energy.

Back-up systems are more important now. A lot of buildings that are coming online learned from the 2011 earthquake when there was no real BCP (business continuity planning). With the BCP, you’re seeing new buildings with generators, gas-fired turbines, so there is support in case of emergencies. Roppongi Hills was a leader and a good example with back-up systems. Many new leading buildings are following the trend.

How do you market your company?

We don’t really need to advertise because we are relatively well known in the industry and about 80% of our business is repeat.

What are some unique characteristics of the Japanese market in your business?

One point is that when you vacate an office, you have to restore it back to the way it was when you moved in, no matter what design changes you made while you were there. This is quite a substantial cost factor. Often we will do just interior fit-outs for some of our clients. They make take 20 floors of a building and we will project manage that.

How many in your team?

In our office here, we have about 100 but in Japan we are about 500 and can usually handle around 20-35 projects running simultaneously. Currently, we are getting a large number of hotel-related projects, such as business hotels.

What effect do you think the 2020 Olympics will have on your business?

It is positive because it boosts the confidence in the market, but I think the Tokyo market was going that way anyway. Lend Lease has a lot of experience with the Olympics. We did the Olympic village in Sydney and London.

How hot is the Tokyo market now?

The cap rate (your yearly income over the cost of the building) is an indication of how hot the office market is. It was 5-6% in Tokyo for a while but currently with some of the buildings being bought, it is under 3%. This indicates that there is a lot of demand for land. I think that going forward, many empty buildings will be renovated into “green buildings.”

What do you think of “Abenomics?”

I think structural reforms are the key. In our sector, the changes that are planned for hospitals and the health care sector could be massive. There is close to $75 billion worth of upgrade work to hospitals in this country if structural reforms take place.

What is your management style?

I prefer one-to-one meetings because you get a lot more out of those concerning the real issues and come up with solutions. I also encourage a work-life balance with no overtime Wednesday and casual Fridays. We try and get staff involved in a lot of activities. If anyone wants to work on weekends, they need director-level approval.

How do you relax?

I play tennis twice a week and go-kart in Chiba, when I can.

© Japan Today

©2024 GPlusMedia Inc.


1 Comment
Login to comment

I do not like buildings where you cannot open the windows.

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites