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    Woods Bagot rejects merger offers, but other practices see benefit of global alliances

    Nathan Johnson

    Australia’s largest architecture practice Woods Bagot says they have rejected merger offers from overseas firms looking to establish themselves in the Australian market, The Australian reports.

    Speaking from the Woods Bagot 2015 Developers Conference, managing director Ross Donaldson said that merger and acquisitions activity in the architecture sector was lively, however his firm is performing "very well" without the aid from cashed up, particularly American, architecture firms.  

    The Woods Bagot strategy, which also includes increasing their large-scale residential projects, has seen the commercial-specialist firm grow at an exponential rate in the Chinese, Singaporean and now American markets.

    In 2015 Woods Bagot is expecting to collect $40m worth of revenue from residential projects. Compare that with 2006 figures which saw the firm collect $60,000 worth of residential revenue, and the scale of their transformation can be seen.

    This is benefited by the relationships the firm has made with Chinese and Singaporean developers after setting up offices overseas.  

    “A huge amount of our work is for Chinese and Singaporean developers in Australia,” Donaldson told The Australian.

    “Chinese clients are very strong negotiations, very tough.

    “But we’ve learned how to work with Chinese clients because we’ve had a very substantial business in China for 10 years now and they are about 25 per cent of our business.”

    However, Woods Bagot is not the only Australian firm increasing their global presence, and although they are openly rejecting international offers for mergers deals, other Australian firms are taking the merger and alliance approach in a bid to boost international reach.

    In 2013 Sydney’s PTW was bought by China’s China Construction Design International (CCDI) and according to Director John Bilmon the purchase made it possible for the firm with 230 staff to meet its cash flow requirements at times when work is tight, as well as expand the firm’s scope:

     “The real reason was professional – to expand into the Australasian region and within China in particular,” Bilmon told Business Review Weekly.

     “By joining the CDDI machine, we’ll be able to have our credentials put forward to a vastly enhanced number of client groups and sectors.”

    Also in 2013, Sydney’s Rice Daubney merged with USA-based global architecture firm HDR, forming HDR | Rice Daubney and has since admitted that the merger gave their clients access to a deeper pool of specialised global knowledge and a better position to compete more effectively for larger and more sophisticated tenders in existing and new markets.

    Australia’s i2C also recently formed a strategic alliance with global firm Ryder Architecture and says that technology such as BIM software will facilitate a more integrated and streamlined international service.

    Donaldson says Woods Bagot and other firms should expect to see a lot more interest from American players in the Australian architectural sector but says his firm will continue on their own path to doubling their size over the next three years.

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