Builders, Developers, Suppliers & Trades

Articles tagged with Builders, Developers, Suppliers & Trades:

10 Tips for winning your next bid

No matter if you are a construction builder, architect, property developer or independent contractor, securing that next big contract may take time and effort. The good news is that it can be done.

Featuring expert comments from people who send and tender bids in the Australian market, this CoreLogic "10 Tips For Winning Your Next Bid" article features tips on day-to-day routine, customer interaction and technology.

In this article, the experts provide you with 10 tips that they believe may help you to prepare a winning bid that stands out from the crowd.

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Are You Data Smart?

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We are in the age of data.  Data is the ‘new oil’ – able to power new revenue streams and improve efficiencies in existing ones.  With the relentless rise of both the amount of data and our tools to process it and turn it into actionable insights, it is up to all of us to get the benefit or be left behind.

With new technologies from giants like Amazon, Microsoft and IBM that combine data with ‘deep learning’ to create real insights, the challenge now is what to do with those insights.

The property industry has been slow in using data effectively.  There are isolated pockets where data is used to acquire customers, such as listing presentations used by real estate agents, or manage mortgage risk using credit and property valuations data.  In general, though, as an industry we have been poor at execution and slow to change.  The opportunities have been missed because it is sometimes hard to see the forest from the trees. 

We hear about these great new technologies, about ‘big data’ and how social platforms can predict what we want for breakfast, but we can’t seem to find solutions that have real business benefits.

This is an impediment both to our revenue growth and our efficiency as businesses.  Without real insights into our customers’ needs we end up spending unnecessary dollars trying to meet needs that don’t exist.  It is also more than just having insights, it is about using those insights at the point where they can be actioned by someone.  Too often the issue with data is not about getting the insight but using it!

If our industry doesn’t mature in its use of data we risk getting disrupted by those who know our customers better and can effectively meet their needs.  Even worse, we risk becoming a supplier cog in a customer ecosystem run by others – where we are a commodity item that can be switched out.  

And this is already happening, mortgage brokers are one example where using data in customer service is helping get more customers, as are agent ranking sites such as OpenAgent with agents.  On the CoreLogic systems over 50% of all Australian properties are on at least one mortgage broker’s watch list, allowing them to contact home owners pro-actively when they list or sell.  Some advanced agents are also using ‘propensity models’ that predict who will list their property to get listings, using data that includes if their shopping behaviours have changed (indicating a teenager has moved out of the home or that they are renovating because they are buying more at hardware stores!)

This is still lightweight when compared with just how much Google and Facebook in particular know about Australian consumers, but more importantly how they can execute on that knowledge with increasingly targeted adverts.    

The next disruption in data will come from ‘data driven workflows’ where all aspects of service to a customer are driven from data about them and their needs.  Marketing automation systems are already doing this with re-targeting and message shifting depending on how customers respond to adverts.  CRM’s like Salesforce and Microsoft Dynamics are integrating to data and analytics through “API’s” and allowing for advanced customer workflows to be constructed using data to trigger and filter actions.  And most relevant to our industry, the U.S. based fintech SoFi may be coming to Australia as a mortgage provider, using data and a customer focus on ‘High Earnings Not Rich Yet’ borrowers from good universities, the SoFi model may pick the most profitable future customers away from our traditional lending institutions.

And there are even more digital players entering our industry or changing their existing business models to provide digital mortgages, digital sales and rental processes and even automating title transfer, from airbnb to Pexa these players are capturing far more data than our traditional players.  They are also ‘digital natives’ and have built businesses from the ground up where data is part of their DNA.

The lesson for our industry?  Make sure you are collecting all the data you can about your customers and their behaviours, make sure you can store and link it to internal and external data to create insights, and most important know how you can use those insights to get better at service and at pro-actively meeting your customers’ needs.  

If you aren’t, someone else will.  

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Commercial Property: Chinese Capital's Wings Clipped, Others Step In

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The Chinese government's foreign-investment clampdown may have been blamed for cooling Australia's commercial property markets, but optimistic projections suggest that investors from other countries have stepped in to pick up some of the slack.

The office, retail, and industrial market dropped 16.8 per cent or $5.24b from 2015/16 to 2016/17 to be worth $25.94 billion. Foreign investors accounted for just under $10b or 38.5 per cent of 2016/17 figures. 

Despite a drop in the share of foreign investment in the Office market from 59 per cent to 45 per cent, foreign investment in industrial properties increased to 35 per cent from 29 per cent the previous year.ii Last year, many Chinese investors also turned to the hotel sector, purchasing 13 Australian hotels worth a total of $1.12b - well ahead of the $439m in domestic capital put into the hotels sector.ii

Restrictions come into play

Chinese-government moves to bolster the yuan - which have seen it impose tight restrictions on the types and amounts of acceptable overseas investments - have driven a dramatic change in the global investment market.

A recent Morgan Stanley analysis suggested that Chinese investment in overseas residential property markets would drop by 84 percent this year, to $2.15 billion, and another 15 percent next year.

This withdrawal has significantly impacted geographies such as the UK, where Asian investors accounted for more than half of commercial investment and Chinese interests alone comprised 25 percent. Their absence has turned London's once-buoyant property market into a "stagnant" shell.

Yet the demise of London's market does not, forecasts suggest, seem set to be repeated in Australia. A recent Cushman & Wakefield analysis suggested that investors from Singapore, Hong Kong, the US and Germany were stepping in to fill the void left by the clampdown on Chinese capital.

Many are attracted by reports that regularly place Sydney and Melbourne amongst the world's most desirable investment destinations: British investment firm Standard Life, for one, recently predicted the two cities would top the Asia-Pacific commercial real estate leaderboard this year.

Global head of real estate research and strategy Anne Breen noted that "the forces propelling Australian real estate values are global in nature and, in addition to the diversification benefits, investors can benefit from investing in these global trends with conviction." 

"Domestic and international investors regard Australia as relatively low risk and a highly transparent market," Colliers noted.ii Changes on the horizon

Ongoing global interest paints a rosy picture for Australian asset owners and developers, who are well placed to sign overseas capital to support all manner of investments in commercial real-estate developments that continue to enjoy low office vacancy rates and rising values, despite tighter yields.

There were some strong commercial sales highlights in August, with Melbourne's 23-storey 120 Spencer Street office tower selling for over $250m and a four-storey Sydney CBD building selling for $70.5m to a Chinese group; the latter property was previously purchased for $45m in 2014 by another Chinese group, which realised a strong three-year return in its resale this year.

Long-term changes could complicate the situation. DEXUS Property Group warned in its Australian Real Estate Quarterly Review Q1/2017 that with an anticipated easing in the NSW population and weakening employment the state could join Victoria in slowing by fiscal 2019, compared with Queensland and WA. The investment market could also be shaped by a presumed strengthening US economy and rising interest rates.

Nonetheless, investment reviews continue to pinpoint Sydney and Melbourne as strong global performers. AXA Investment Managers recently named Australia "the first port of call" for investors in the Asia-Pacific region, while DEXUS noted continuing surges in office rents and expected "continued positive leasing demand, but a slowing of capital gain". 

Take action

The changing nature of international commercial real estate investment in Australia requires commercial agents change gear to stay ahead of the market and gain leads in the sector. 

  • Cooling Chinese investment is being replaced by investors from other key geographies that see Sydney and Melbourne as high-appeal investment destinations. Turn your attention - and marketing - to espousing the advantages of the local market and providing opportunities for customers from these markets.
  • Clampdowns on residential property investment are driving many Chinese investors towards commercial real estate. Despite the increased formalised restrictions by the Chinese government on outbound investment, there may still be commercial real estate opportunities to attract Chinese buyers to Australia over other jurisdictions.i
  • Changes in the global environment and Australia's market may see growth in the commercial investment market in the long term slow. It may soon be time to consider sales tactics designed to maintain or gain market share in a cooling market.

© Copyright 2018. RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors. All rights reserved. The data, information and commentary, provided in this publication (together, Information) is of a general nature and opinions expressed in this publication are those of the relevant contributors and should not be construed as specific advice or relied upon in lieu of appropriate professional advice. While CoreLogic uses commercially reasonable efforts to ensure the Information is current, CoreLogic does not warrant the accuracy, currency or completeness of the Information and to the full extent permitted by law excludes all loss or damage howsoever arising (including through negligence) in connection with the Information.


References

  • Birtles, B. 2017, China's curbs on overseas property deals could worsen Australian real estate drop-off, ABC News, http://www.abc.net.au/news/2017-08-21/china-curbs-on-overseas-property-deals/8828450, accessed 12 September 2017.
  • Colliers International 2017, 2015 / 2016 Capital Markets Investment Review, http://www.colliers.com.au/find_research/speciality_reports_and_white_papers/2017_capital_markets_anz_investment_review/, accessed 12 September 2017.
  • Wang, Y. 2017, China's Crackdown On Capital Flight Is Claiming Some Of Its First (And Biggest) Victims, Forbes, https://www.forbes.com/sites/ywang/2017/03/16/chinas-crackdown-on-capital-flight-is-claiming-some-of-its-first-and-biggest-victims/#74a633f13da6, accessed 12 September 2017.
  • Edwards, J. 2017, China has suddenly stopped buying foreign property, Business Insider Australia, https://www.businessinsider.com.au/china-overseas-property-investment-uk-2017-8, accessed 12 September 2017.
  • Colson, T. 2017, Here are the factors slowing down the UK's 'stagnant' housing market, Business Insider Australia, https://www.businessinsider.com.au/uk-housing-market-explained-price-2017-7?_ga=2.132364808.761762067.1504871314-858047225.1500690004&r=UK&IR=T, accessed 12 September 2017.
  • Cummins, C. 2017, Singapore now the biggest foreign investor in Australian property, as Chinese investment drops 69pc, The Sydney Morning Herald, http://www.smh.com.au/business/property/singapore-now-the-biggest-foreign-investor-in-australian-property-as-chinese-investment-drops-69pc-20170825-gy4fqj.html, accessed 12 September 2017.
  • Schlesinger, L. 2017, Sydney, Melbourne offices best in class: Standard Life, Financial Review, https://www.commercialrealestate.com.au/news/sydney-melbourne-offices-best-in-class-standard-life/, accessed 12 September 2017.
  • Schlensinger, L, 14 May 2017, Sydney, Melbourne offices best in class: standard life, https://www.commercialrealestate.com.au/news/sydney-melbourne-offices-best-in-class-standard-life/ accessed 12 September 2017.
  • Johanson, S. 2017, Spencer Street tower sells for $250m amid east coast office boom, The Sydney Morning Herald, http://www.smh.com.au/business/property/spencer-street-tower-sells-for-250m-amid-east-coast-office-boom-20170825-gy3zks.html, accessed 12 September 2017.
  • Meredith, B. 2017, Hyde Park's $70.5 million dollar sale, CoreLogic, https://www.corelogic.com.au/news/hyde-parks-705-million-dollar-sale#.WbKBstMjEUE, accessed 12 September 2017.
  • Australian Real Estate Quarterly Review 2017, Upside and Downside risks finely balanced Q1/2017, Dexus Property Group, www.dexus.com/-/media/files/articles/research/dexus-research_areqr_q117.pdf, accessed 12 September 2017.
  • Real Assets Research Team 2016, Asia Pacific - Australia the first port of call, Investment Managers, https://realassets.axa-im.com/en/content/-/asset_publisher/x7LvZDsY05WX/content/asia-pacific-australia-the-first-port-of-call/23818, accessed 12 September 2017.
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