Taking risks is crucial to innovation. Steve Jobs, Nikola Tesla, Grace Hopper – where would we be if these remarkable risk-takers had played it safe?
Likewise, risk-taking in property development is key to driving innovative outcomes. Sydney Harbour would look very different today if Jorn Utzon stayed within known bounds of design.
However, not all risks were created equal. Risks taken in the early planning phase, while common and entirely preventable, can lead to disaster.
Mismanagement of planning risks can lead to inefficient floor plans, defective buildings, tenant dissatisfaction, budget blowouts and (potentially) irreversible reputation damage.
So, how can we navigate these risks from day one?
Backed by our many decades of combined engineering experience, Neuron's engineering team has selected the top five mistakes developers make in managing engineering risk, outlining simple strategies for avoiding them on your projects.
Let's dive in.
The majority of development applications (DA's) submitted to council are denied.
More than ever before, councils are risk averse. They want to see "the full picture" from the DA stage, not aspirational concepts that were never practical or buildable.
Rejected DA applications provide an opportunity to improve the product and create more value. This is where innovation and design finesse come into play.
Too often, though, additional applications are required due to insufficient initial planning that could have easily been avoided, and the fallout from this is significantly delayed approvals and budget blowouts.
When the focus is taken away from improving apartments and amenity design in order to fix easily avoidable mistakes, design integrity suffers, as does the end value.
Therefore, obtaining accurate engineering input throughout the DA process will result in improved council confidence that your project is not only desirable, but practical, sustainable and deliverable.
Ensure lift cores, substations, fire tanks, and air-conditioning condensers are incorporated into your concept design. Typically, a mid-size residential building will require 50 to 80 engineering items to function. Incorporating these spaces during the DA phase will not only increase your chances of landing DA approval, it will drive developer confidence, better design outcomes, and higher yields for your project.
Your programme is the backbone of a successful development.
Timing to market is critical, as there are costs associated with every aspect of construction - from the moment the first shovel lands, to the final touch up.
Starting the engineering phase early can be daunting, especially if you're already swimming in consultants and are unsure of whether the investment is worth it.
However, if major engineering scope and costs haven't been factored into the planning phase, you can expect programme delays that will prevent your project from reaching completion in a timely and cost-effective manner.
Many developers get caught out by this, taking unnecessary risks by making decisions based on 'gut feel' or 'what we did last time'.
Unfortunately, this approach is rarely a good idea, and more often than not, it leads to underestimating the cost and impact of various engineering strategies.
This can lead to pre-tender budget blowouts and aggressive last-minute value management rework, pushing out tender deadlines and delaying your project going to market.
Therefore, conducting services infrastructure assessments early in the design phase allows you to fully understand the works required for the completion of your project, thereby helping you to develop an informed programme from the start, and reducing ongoing programme risk.
Following the right processes upfront will save a lot down the line.
When is the right time for procuring sub-contractors?
The answers are wide and varied. Some will say, "go to sub-contractors early, they know how to build it and will likely change the design anyway."
This is contradicted by others, who insist on first "getting the design done properly to set quality expectations and reduce variation risk."
So, which one is right?
We know all developers are different, and the right answer will depend on the developer's existing skillsets and the capability and reputation of the head contractors.
In either scenario, you want assurance that you can deliver a development that your company can be proud of.
A key component of assurance is removing unknowns, making effective data-driven design decisions, and enabling your design team to deliver robust documentation that clearly outlines the design intent - irrespective of the documentation's level of detail, i.e. 80% D&C Documentation versus 50% D&C Documentation.
Good engineering forms the basis of good design. Accurate and timely engineering input, correct plant allocation and robust engineering strategies are vital steps in this process.
Resolving engineering strategies early will create a positive ripple effect that will benefit your remaining design team for the entire duration of the project.
Whichever strategy you choose to deploy, ensure you stay ahead of your commercial risk by ensuring your design is built on strong foundations.
This will set up the project for successful commercial outcomes.
Any substantial new development will impact the local utility providers.
But let's face it, connecting your building up to water, sewer, gas, power, and comms, is probably not your top priority in the early stages of design.
This is a big mistake, especially in areas where increasing density is part of the local council's vision, or a developer's vision for the community.
Authority risk is omnipresent in the development programme, and when mismanaged, can catch developers out by underestimating the true impact, cost and time associated with key utility connections.
In some cases, this can dramatically affect the viability of developing certain sites and threaten to undermine any good intentions you have at the beginning.
By undertaking an infrastructure services assessment at project conception, you can turn unknown risks into a group of known risks that can be managed.
Ensure you understand your authority connection requirements early in the planning phase through your technical due diligence. It will help you understand scope, costs, and tasks so you can programme in critical path items and move forward with confidence.
Historically, a DA approval is taken as a green light for apartment pre-sales.
Unfortunately, developers who haven't incorporated lost net sellable space for crucial items like lift cores, on floor electrical and water cupboards, stair pressurisation shafts and the like, risk inaccuracies in product sales, and the dream sold by impressive CGIs becomes a nightmare in reality.
Whilst contract conditions exist to mitigate this risk, top tier developers know they need to stand behind their product to deliver on marketing promises.
It goes without saying that unsatisfied customers are not a good look, and the damage to reputation in these instances can be irreversible.
One key element of managing risk in the early phases of planning your development is ensuring accurate building services engineering requirements are captured in the early planning phase.
Early, accurate information will ensure you know what you're selling, and the customer will know what they're buying into.
Ultimately, this is a win-win scenario, reducing sales risk and driving better outcomes for all parties involved.
Obtaining engineering advice in the early stages is costly, time-consuming, and often inaccurate.
It can take weeks, if not months, for engineering consultants to thoroughly assess all design options, then complete extensive assessments and calculations to fully resolve the design.
Real-time engineering changes this.
As a smart, innovative engineering platform, Neuron allows developers to access highly accurate advice and guidance in minutes, enabling these five major risks to be managed with ease and well within budget.
Neuron was created by world-class engineers, who were all too aware of the roadblocks created by relying on consultants to keep up with innovative design solutions.
Developing strong risk mitigation strategies with your engineering consultants will provide the foundation for profitable, sustainable and innovative developments that positively impact the community at scale.
To run a pilot project through Neuron's software, or to find out more on how real-time engineering can help your next residential project, visit www.neuron.build