[+] Call to Arms: Opportunities on Rise as Defence Beefs Up

“Look after your gear and your gear will look after you.” Defence forces across the world take that motto to heart—and it extends to infrastructure. The Australian Department of Defence has one of the largest real estate portfolios in Australia, valued at $64 billion. It owns 394 properties, including 72 major bases, leases another 530 and has stewardship over 3 million hectares of land across five world heritage areas. Defence funding for 2022-23 is projected to reach $48.6 billion, an estimated 2.11 per cent of gross domestic product (GDP). And according to March 2023 updates, estate and infrastructure programs have been upped by more than $500 million to $3.3 billion this year. In addition to the business of running a defence force, it has major industrial bases and research facilities, and huge contracts and partnerships funding the work of businesses large and small, from the giant BAE Systems down. So, whether directly or indirectly related to defence, the opportunities are ripe for developers and property professionals who know where to look. ▲ HDR has been working on the AIR428 Pilot Training System, a $320-million project to design and construct ADF training facilities. And there are some huge benefits to getting into defence, according to the managing principal of architecture practice Mode Design Corp Rhonan O’Brien. “There are some difficult hurdles to get over, but there are also enormous budgets, particularly in the Northern Territory, Perth, Sydney and Brisbane, as well as Newcastle and Townsville,” he says Planning and engineering firm HDR, led by managing principal Cate Cowlishaw, has delivered defence projects for 30 years. It was part of a design consortium which delivered the first Defence Public-Private Partnership project in 2004, as the department opened up to private sector involvement. “With geopolitical tensions increasing, we are working in partnership with our global counterparts and industry partners to accelerate the delivery of projects,” HDR director Stuart Aslett says. “There is a significant hill to climb over the next few years and we are accelerating our capacity to deliver base redevelopments, capability facilities and operational and training environments that can sustain military capabilities for the next decade.” Developments in the works The process of applying for a defence contract, whether it be to supply one of the services or to build for them, can seemi convoluted, O’Brien explaines. “There are tiers to getting into defence, starting with the lower tier, which is where you go to get your defence work and credentials initiated,” he says. “It can take years to get into even that lowest tier.” It may seem a Catch 22, but often companies need experience to get experience in the defence sector. “The first thing you need is an understanding of the bases, but you can’t get on to a base unless you’re on a job—basically everyone who works on defence has to be an Australian citizen or currently aligned to the country,” says O’Brien. “The security around that and background checks is unbelievable. “Then you have to have base clearance, and you can’t have that unless you work with someone who is already working on the base.” ▲ Defence forces are spread through metropolitan and regional areas, providing opportunities for developers, builders and designers. Operators such as Hansen Yuncken, which has won major contracts in the past such as a $57-million supercomputer centre for the Department of Defence in South Australia, are often considered the next tier up, and bring approved contractors into the space. Throwing the hat in with department project managers is the first step, but relevant experience is a must. “You might have industrial project experience, for instance, warehousing or something, so you might be able to pitch for a storage facility for Bushmaster vehicles,” O’Brien says. But the opportunities in the space are worth it, with the Department of Defence’s Enterprise Estate and Infrastructure Program of approved major projects for 2022-23, which comprises just three projects, have a collective value of $1.4 billion. “It’s interesting work, but obviously a lot of it is confidential. But there are projects you can work on like facilities for radar, unmanned drones, nautical vehicles, you build townships for them to engage in exercises, rifle ranges,” O’Brien says. “We can’t talk too much about it but there is some fascinating work—it’s a completely different world.” “You also get a really good national profile to the work.” In addition, in-house teams can build valuable niche experience. “They do a really serious risk assessment of properties and materials, if it has a 50-year life, a 20-year life, whether it can handle the risk for storms and terrorist activity,” O’Brien says. “We do a lot of corrections work as well so we know a lot about secure environments and ways of dealing with security, which is different from your average architect. There is a lot of cross fertilisation. “There are probably only about 10 per cent that have worked in defence in terms of architecture, it’s a good market in that sense, there isn’t as much competition, every architect can do an apartment building, but not everyone can do a control room for the RAAF.” The bigger picture Across the three services, the Australian Army, Royal Australian Navy and Royal Australian Air Force, there are between 65,000 and 75,000 personnel. If plans by the former Morrison government are carried through, the permanent Australian Defence Force (ADF) workforce would expand by 30 per cent to almost 80,000 personnel by 2040. Gross Value Added to the economy from defence expenditure grew more then $3 billion between 2015 and 2020 to $9.7 billion, and, in addition to personnel and immediate defence requirements, the military families need to be supported with accommodation and amenities. In places such as Townsville, where the brigade that commands all Australian Army aviation units will relocate to, military presence is a major contributor to the local economy and demand for residential housing. ▲ New South Wales has the strongest defence force presence, but Queensland and the Northern Territory also host a number of bases. This has been hugely beneficial to developers such as Sentinel Property Group, according to its chief executive officer Warren Ebert, when discussing the opportunities for developers in Northern Australia . “You have another brigade moving to Townsville in the next three years, with 1500 personnel, multiply that by three or four as they will be bringing family members with them, that’s another 5000 people added to the permanent population. “The defence base in Townsville is the largest in Australia. But there’s a couple of billion dollars in defence activity up there,” says Ebert. “The US has permanent bases here it is spending at Katharine and Japan is putting a base there [for Japan Self-Defence Forces training] in the Northern Territory. “That is billions and billions of funding when you only have 140,000 people in Darwin. “Defence isn’t going away—it’s only getting bigger and bigger.” ▲ HDR has also been involved in the redevelopment of the Australian Defence Force Academy in Canberra. HDR has had a similar experience, according to director Stuart Aslett. “Our work with the US defence force, coupled with the scale and breadth of project types we are working on, is arming us with increased agility in key areas of growth and development for the sector such as cybersecurity and space,” he says “This globalised, multi-lateral approach is particularly pertinent in the current climate, especially in light of the AUKUS announcement this month.” In addition, ancillary and supply industries have also seen the opportunity in large defence budgets, which support major companies such as BAE Systems Australia and Hanwha Defense Australia, and focused on technology-driven projects. HDR is working in partnership with GROUPGSA to design the Riverina Redevelopment Program, a $1.8-billion project that is across three defence establishments. “We are currently developing data-driven design tools that can expedite processes and future-proof Australia’s Defence Estate and facilities,” Aslett says. “Past defence facility data analytics, such as meal pass data used to validate mess capacities, is helping us to simulate how new buildings can be best utilised and configured. “While defence spend is pivoting towards a technology-driven, agile force that enables a reduction in ‘boots on the ground’, attraction and retention of military and civilian personnel, and sustaining a strong, community-based heart, continues to be a key component of Australia’s strategic framework. “With the permanent defence workforce expected grow to around 62,400 over the next decade, the design of operational and training facilities must measure up against those being offered by competing tertiary institutes—and be inclusive, wellness-driven and sustainable.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. 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[+] Call to Arms: Opportunities on Rise as Defence Beefs Up

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