Melbourne’s $3.5bn Builder Taps into Queensland Construction Surge

After reaching the critical mass required to move into a new market, Melbourne builder Kapitol has turned its sights to Queensland. Kapitol director Andrew Deveson and the company he founded with David Caputo in 2018 has come a long way in less than 10 years. It was listed this year as a top five builder for the first time with 17 projects worth $3.5 billion in its pipeline. “We’ve always wanted to have a presence across the country,” Deveson told The Urban Developer . “But we didn’t want to do that until we felt the business was ready. The reality is that we know our local market really well and it’s a lot of risk moving into a new one. “We were tossing up between Queensland and Sydney ... there is obviously a big demand for contract construction work coming in Queensland, which brings its own challenges.” ▲ Kapitol founders David Caputo (left) and Andrew Deveson are launching an upscaled business in Queensland. Kapitol signalled its intentions to grow last year with a rebrand and has invested in scaling up the business, bringing in AI-powered systems and investing in people on the ground. Queensland general manager James Grljusich—formerly of Multiplex, John Holland and TOGA—will head Kapitol’s new office. Getting him on board was “too good an opportunity to turn down”, Deveson said. Kapitol joins other interstate builders taking on the Queensland market including NSW’s Versatile Construction, Roberts Co and Lords Group—all are working on their first tranche of high-profile Queensland projects. Kapitol is currently in confidential tender processes for several Queensland projects. The builder is targeting data centres, having completed projects in Melbourne and Darwin for NEXTDC. Civic infrastructure is also on the cards, as well as hospitals, given its healthcare experience and residential living sectors. Kapitol open for business Kapitol is taking an appropriately laidback approach to working with the local market. “We’ve always been pretty agnostic to how we work with people,” Deveson said. “We see the benefit in doing early contractor involvement and getting on the journey early. Equally we’ve always been happy to do tenders as well. ▲ Higher scale residential is also in the cards. Kapitol built the 18-storey Parkhill project, as well as 161 Eastern [ pictured at top of article ]. “Obviously no one owes us anything and we’re coming into a new market. So we’ve got to provide value for customers. We’ve got to help find solutions to help make projects stack up, or help give certainty so projects can be built. “We will fit into the market and what it expects and wants.” Even fixed price contracts—currently under severe pressure—aren’t off the table, Deveson said. “We want to provide people with as much certainty as we can. And if we can manage the risk, we’ll manage the risk.” Queensland’s idiosyncracies Deveson acknowledged there were considerable regulatory differences between Victoria and Queensland. “But the biggest thing for us to adapt to is the way the supply chain works,” Deveson said. “Historically that has been a challenge in Queensland. The supply chain of subcontractors can get stretched in moments of big growth, and you can be the best builder in the world, but if the supply chain can’t support you, that’s a big problem.” Queensland’s construction industry faces a projected peak shortfall of 35,000 skilled workers by 2027–2028, and an average annual deficit of 19,000 workers leading up to the Brisbane 2032 Olympic and Paralympic Games. ▲ Kapitol projects include the Dr Mark Merry Performing Arts &amp; Media School. Tapping into a national supply chain is critical, Deveson said. “We don’t necessarily have to manufacture every single thing in South-East Queensland if it’s going to put too much pressure on the local supply chain,” he said. Vertical integration has been a strategic move in its Melbourne business and it is part of the Queensland strategy—bringing trades up and in house. “That means we have a little bit more control on our supply chain and we’ll import a few key people up from Melbourne to relocate to Queensland and build a bit of extra capacity that way.” Big growth sector experience Growing capacity fast is something Kapitol has already had to deal with in the rapidly expanding data centre market, Deveson said. “We’re not unfamiliar with supply chains being under pressure by a big growth in work, and it’s really about looking a little bit differently at the problem. How do we tap into other supply chains? How can we reduce the amount of people actually physically required on the site?” Kapitol has also turned its attention to modular, launching a volumetric modular side business with CIMC Modular Building Systems and ICD Property this year, targeting program reductions of 40 per cent. ▲ Kapitol is the construction paertner of Australia's largest publicly owned data centre operator NextDC. “We want to provide a one-stop solution to developers because modular can make building a building—already a hard process—more complicated again. “Everyone can see places around the world where volumetric modular is really positive and adds capacity to the industry. We see the same opportunity in Australia, but it’s an immature industry and it’s an immature delivery model.” There are lots of barriers to cross to bring modular at scale to Australia, Deveson said. “It’s going to be a bit of a bit of a slog to get those first few jobs away and show everyone it’s a good way of working and the product’s good. “It’s not a quick fix,” he said. “But we’re in it for the long haul.”

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Clare Burnett
Thu 12 Nov 26

Melbourne’s $3.5bn Builder Taps into Queensland Construction Surge

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