Business | Construction
Hong Kong's architectural firms are first to feel effects of slowdown in development
Previously booming industry saw many professionals flock to area to work on projects such as the Olympics
- By Raphael Minder, Financial Times
- Published: 23:27 November 22, 2008
Hong Kong: In late August, Woods Bagot, an international architectural firm, invited clients to an office party to celebrate the hiring of its 100th employee in Hong Kong. In the following days, the firm started to let go or transfer some of those architects, reducing its Hong Kong head count to 88.
Other leading Hong Kong practices have made similar cuts.
Aedas, the largest architectural practice in Hong Kong, started the year with 650 employees and reach-ed 820 over the summer, before recently cutting back to 750.
"We've had to tell some people who were just preparing to move here not to turn up," says David Roberts, Aedas chief executive.
"This is a profession that acts as a barometer. We're the first ones to grow, but also the first ones to lose out when things go bad."
The profession is facing a downturn worldwide, as cash-strapped developers struggle in a slowing economy, but the impact may be emerging first in Hong Kong following an aggressive recruitment drive.
Woods Bagot, for example, had just 25 people in Hong Kong at the end of 2005. Architects, often fresh out of European universities, flocked to Hong Kong to work on China's urban development, venues for the Olympic Games and Macau's transformation into the world's largest gaming centre.
Hong Kong also acts as a platform for projects across Asia and the Middle East.
Since September, however, thousands of Macau construction workers have been made idle as Sands and other casino operators scramble for cash.
Chinese developers have started shelving or scaling back big projects. Hopewell announced last week that its flagship Hong Kong hotel project would rise to 55 instead of 93 floors.
The boom-and-bust scenario is also exacerbated by labour legislation that offers much weaker protection for employees than in Europe.
"The situation in France is also bad, but there's just no way you can fire as easily as in Hong Kong," said Marie-Pierre Blanc, partner at Archibat, a Paris-based recruitment firm specialising in architecture.
Stephen Jones, Asia managing principal of Woods Bagot, said the biggest risk was payment delays.
"Architect businesses don't typically have cash reserves to carry payroll for long periods," he said.
"In addition many firms have been funding aggressive growth over the last two years and this places them in a weak position when the market slows."
The downturn is forcing practices to switch rapidly to government-backed projects, whether in infrastructure or second-tier Chinese cities.
"I travel more to places like Ningbo," says Massimo Bagnasco, director at Progetto CMR. "We all prefer the main cities, but work has stopped there."
Some Shanghai practices have halved staff since August, according to Samuele Martelli, another Italian architect whose Studio 63 practice opened a Shanghai office in May.
"At the time, opening here seemed like a very good idea," Martelli said. "Now we have to be very careful."
Share this article
More from Construction
More from Business
Popular in Business
-
General
Precious jump
Gold prices at new high as India's central bank buys $6.7b worth of gold
Business Editor's choice
-
UAE companies in full force at WTM
Seventy-eight participants are from Dubai and 50 from Abu Dhabi
-
DIFC committed to high standards
Ensures an efficient process to serve the business community
-
Sweet life in the Middle East
A sweet look at the confectionary industry in the UAE and Middle East
