A country the size of Europe with room for growth would tempt any practice. Hawkins\Brown got a toehold
China plans to invest over £1bn to build 100 universities in south China alone in the next five years
In the year it celebrates the silver anniversary of its founding, it’s no surprise that Hawkins\Brown has used the event to hail its expansion into China. Developing skills over the past 25 years in education, mixed-use residential and infrastructure projects (it’s involved with three Crossrail stations), partner Roger Hawkins explains they felt it was time to take their expertise to Asia – and to do it their way. This has been seen most palpably with the firm’s appointment as fit-out designer for the Handan Bank’s new 50,000m2 HQ in Hebei province – bigger in size than the Gherkin.
‘Most architects seek collaborations with local practices. There’s an American model of architects handing a design to a local to deliver,’ he says. ‘We wanted more of an ‘hour glass’ shaped approach, where skills cross over and both parties are involved throughout. It’s an amazing opportunity. For instance, Crossrail is the largest construction scheme in Europe, but China has 20 such schemes that size on site now.’ To establish a toehold in the market, the firm sought out a Chinese director who could act as intermediary, appointing ex-RMJM China project leader Fang Fang as a London-based director for its Chinese arm, HB International. She gives an idea of the potential scale of work when she says that China plans to invest over RMB10bn (£1bn) to build 100 universities in south China alone in the next five years, a type the firm is well-versed in.
But getting in on the design market is the challenge. Fang Fang explains that the lion’s share of the work in China is carried out by local design institutes, state-owned offices that hold all the licences and certificates needed to carry out large-scale works, and act as a ‘one-stop shop’ for private clients. Working in JV with foreign architects they are typically responsible for construction documentation and site management (RIBA Stage E onwards), a situation Roger Hawkins, pushing for greater practice involvement, seems to want to change.
Bucking the trend to set up in the practice-heavy and competitive Shanghai or Beijing, the firm opted for Chengdu in Sichuan, partly because the city’s at the centre of the state’s ‘Go West’ policy. Having spent six months setting up its WFOE (wholly foreign owned enterprises), it is about to start employing local staff. The firm’s first project, the design of the 1.2million m2 Nordic City in the city’s Xindu district, involves seven mixed-use residential towers – ‘each one’, Hawkins notes, ‘bigger than any project we’ve done in the UK.’
The project is already pushing the practice to be propositional. Chinese building codes demand that every room gets a window, resulting in gnarled plan forms and pre-determined and inefficient use of space. ‘We want to convince the authorities to adopt a more flexible approach to layouts that use common cores but allow them to be open plan.’ Its ‘SoHo’ proposal (Small Office/ Home Office) would allow firms and families to buy one or multiples of the 40m2 base units that they can lay out themselves. Hawkins is also pushing off-site manufacture, saying, ‘We were initially shocked at the low level of build quality, and saw MMC as the perfect way to rectify it.’
These efforts caught the eye of local authorities who, having seen their efforts at Nordic City, commissioned the firm to analyse the Development Control Plan for Xindu’s Sanhe Metro masterplan, a 100ha derelict industrial site intended to house over 20,000 people in the next three years. ‘They asked us and Buro Happold to review the plan and put forward proposals, aspects of which are now being implemented as policy. It was all about place making, economics and getting the right mix of uses,’ says Fang Fang. She describes design review here as an open process – all submitting firms can watch each others’ presentations to the authorities, unlike the UK. Hawkins claims the firm is trying to steer away from US clients’ urban typologies for a more European approach. ‘We are challenging the idea of the megastructure: underground car parks and big decks with towers above. Some of our language about urban hierarchy is new to them,’ he says. ‘Local government is selling plots with the new guidance in mind, which is about lower densities and more green space,’ he says. ‘We’re thinking more about place making. Some places have too many shopping malls which are also too far out of town; the oversupply is becoming problematic.’
In all they do, there’s a realisation that as the Chinese get more affluent they are becoming more selective, having seen their cultural heritage disappearing in the unrelenting march of development.’ Fang Fang thinks companies need to respond to this with more nuanced approaches when reintroducing social concepts to this socialist state: ‘It will be a hybrid solution of the indigenous and foreign to accommodate the needs of an emerging and burgeoning middle class,’ she concludes.
SPECULATIVE INVESTMENT IN A COMMAND ECONOMY
As central government guards its own research, so there is no transparency in the private market – we have 40 analysts in China dedicated to researching property trends in office, retail and high end residential. The country is shifting from investment to consumer-led, with developer interest accelerating and the retail sector particularly hot. With a burgeoning middle class, there’s a lot of interest in capturing demand from this new consumer market. Last year 80 malls opened in the top 20 city markets – this year, it’s projected to be 150.
Because the government wants to control price inflation in the sector, it has put restrictions on residential development to control investor speculation, and China is not experienced in the overuse of leverage. In contrast with the West where you could once borrow up to 110%, that figure in China is 70%. Housing is a hot topic, and although the market is geared to the top 20% income earners, the government is aware of the need to maintain social stability and ensure property prices don’t rise unchecked. As a result, the sector still needs to be fully built out, and won’t slow down for 10 years.
For offices we expect annual completions to peak around 2017. We track the top 20 markets, which includes both Tier 1 (Shenzen, Shanghai, Beijing and Guangzhou) and Tier 2 cities. Grade A office annual completions is about 3.5million m2, with lower spec Grade B at 6.8million m2. While demand in Tier 1 cities remains healthy, in Tier 2 cities like Chengdu, Chongqing and Wuhan there are concerns that office build-out rates are outstripping demand.
Despite a crackdown on extravagant architectural projects, due to public perceptions that they were a misuse of public resources and even corrupt, work potential for architects remains strong in Tier 1, 1.5 and 2 cities.
Steven McCord is local director at Jones Lang LaSalle, Shanghai