Architects in merger wave
Last week Sydney-based Rice Daubney was acquired by US firm HDR. The deal will allow healthcare and defence-facility specialist HDR to get access to the Australian market while Rice Daubney will take its commercial and retail architectural skills - something HDR lacks - into the vast North American market.
Expanding territorially is an imperative for even mid-large sized operations such as his 120-person firm, managing director John Daubney says. "Australians can't just be Australian," he says. "They've got to be part of a global community."
Australian firms have traditionally expanded overseas by setting up offices and building a presence over time. This is how small specialist Melbourne-based Brearley Architects + Urbanists created a thriving China business since opening a Beijing office in 2001.
Not everyone agrees with the push to mergers. "It leads to increasingly homogenised product, like the high street disappearing. You've got big offices ... and then smaller, more boutique practices. And then everything in between is increasingly disappearing," says Annabel Lahz, a partner at the 10-person Sydney firm Lahz Nimmo.
But it remains a move many are making. Melbourne-based Gray Puksand, a practice with 100 staff, are planning a similar strategy. "That's part of our game plan in the next five years, to have a practice of our own internationally," says founding partner Rob Puksand. "In our experience, the embryonic growth of a company is a very difficult road. It's much easier by synergy. But it's best just to take over another firm."
Frequently Asked Questions about this Article…
Smaller Australian architecture firms are merging with international companies to expand their market reach and become part of a global community. This strategy allows them to access new markets and leverage the strengths of larger firms.
By merging with HDR, Rice Daubney gains access to the vast North American market, allowing them to bring their commercial and retail architectural skills to a new audience. This partnership also provides HDR with a foothold in the Australian market.
Traditionally, Australian architecture firms have expanded overseas by setting up offices and building a presence over time. This approach has been successful for firms like Brearley Architects + Urbanists, which established a thriving business in China after opening a Beijing office in 2001.
Some concerns about the trend of mergers in the architecture industry include the risk of creating increasingly homogenized products and the disappearance of mid-sized firms. This could lead to a market dominated by large offices and small boutique practices, with fewer options in between.
Gray Puksand's strategy for international expansion involves establishing their own practice overseas within the next five years. They believe that growth through synergy and taking over another firm is more effective than organic growth alone.
The merger trend may affect the diversity of architectural practices by leading to more homogenized products and reducing the number of mid-sized firms. This could result in a market with predominantly large and small boutique firms, limiting diversity in design approaches.
Being part of a global community is crucial for the expansion of Australian architecture firms. It allows them to access new markets, collaborate with international partners, and enhance their competitive edge by leveraging global expertise and resources.
Some firms might prefer mergers over organic growth because mergers can provide immediate access to new markets, resources, and expertise. This approach is often seen as a more efficient and less challenging path to growth compared to building a presence from scratch.
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