'Dynamic' Multiplex bulldozes its way into UK

Unorthodox Australian group is shaking up construction and property markets with deals worth £1bn, says Miranda McLachlan
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The Independent Online

Australian-based property group Multiplex, best known for its work on Wembley Stadium, is eyeing another dozen projects valued well in excess of £1bn as it continues to take the UK market by storm.

Australian-based property group Multiplex, best known for its work on Wembley Stadium, is eyeing another dozen projects valued well in excess of £1bn as it continues to take the UK market by storm.

The ambitious construction contractor and property developer already has more than £12bn worth of projects in the pipeline including the White City retail development, The Knightsbridge apartments and the Cricklewood regeneration project, all in London.

However, there have also been questions about whether it can deliver major projects such as Wembley and White City, where it is both builder and joint developer, on time. Speculation persists that both projects are well behind schedule.

Multiplex is currently negotiating on another dozen construction and development projects worth on average more than £100m each, according to a senior company representative.

The company is considering establishing a UK investment fund and may look at a UK listing, although this is less likely.

"We've got a fabulous pipeline of opportunities," said the senior source. "The UK is still a big, attractive market."

Multiplex's bid for the contract to build a new hospital in Peterborough has been shortlisted. However, most negotiations are going on privately rather than as part of a public tender process.

The group's involvement in the three-way acquisition with Westfield and Aldersgate of assets worth £585m formerly belonging to another property company, Chelsfield, is expected to throw up a host of further development and construction opportunities.

Industry sources say there is no doubt Multiplex is shaking up the property market by aggressively competing on price and investing heavily. But the company's representative disputed the claim that Multiplex had been acting aggressively, saying: "We've been dynamic and energetic."

Despite some industrial problems at Wembley, unions have surprisingly praised Multiplex's unorthodox "open-door" policy. The Multiplex representative said British unions were "more sensible and not a disruptive influence", in contrast to the situation in its other markets, but noted the planning process in the UK was more protracted.

One leading property analyst commented: "Multiplex has obviously got a lot of guts. It has been prepared to take ambitious projects which are not everyone's cup of tea."

The analyst described Multiplex's founder and current chairman, John Roberts, as "a remarkable man - and clearly a London bull". Mr Roberts' son, Andrew, is the group's chief executive and is expected to spend seven months in the UK this year as the British market becomes a top priority.

With only a couple of finished projects such as West India Quay in London's Docklands under its belt, the group must now prove that it can deliver on time and on budget.

Controversy has surrounded the Wembley project since Multiplex, which helped secure funding for the project, became the only bidder. Its joint bid with Australian rival Lend Lease, owner of Bovis, had earlier been rejected.

After surviving a public inquiry, it has more recently been engulfed in a high-profile dispute with its former subcontractor Cleveland Bridge, which led to delays on site at Wembley. The two sides are yet to fight it out in the courts.

Multiplex has reiterated that it is confident the new stadium will be ready for the FA Cup final in May 2006. It is likely that its subcontractors at Wembley will have to put its workers on double-day shifts from March to meet the deadline.

Another major contract for the company, the White City retail development, is still in its early stages. Industry rivals say the complex project is experiencing delays, but Multiplex says it is running to schedule.

Multiplex turned its attention to the UK after its construction of Sydney's Olympic stadium, created by the same architects behind the design for Wembley. But it is now putting greater emphasis on property development; this is likely to become the dominant side of the UK business, as it is in Australia.

A recent report by the Australian broker Macquarie Equities described Multiplex as "in an aggressive ramp-up phase" and said "its move offshore is not without risk".

The report continued: "Multiplex's construction disciplines appear well and truly in place and the live retail projects show strong prospects [but] a cautious approach needs to be taken to the amount of 'blue sky' paid for among the development assets, as the business model is yet to be proven."