With FY14 looming, it seems that 2014 is shaping up to be an exciting and busy time for property lawyers, according to Vanessa McKay
Reflecting on the legal recruitment market, property continues to be the most active practice area with in-house legal teams and law firms increasingly looking to recruit property lawyers with varying seniority, from the newly qualified to experienced senior associates.
Through the continued need for property lawyers not only in Victoria, but Australia-wide, Mahlab is seeing an unprecedented level of demand for such lawyers. This can be attributed to a number of flow-on effects from events such as the global financial crisis, and the growth of the international investment market, coupled with a steadily increasing residential property market and an appetite to invest amidst a projects/infrastructure boom in some states.
With the economic climate continuing to strengthen in 2014, Victoria is experiencing a property boom, not only in the commercial and residential real estate areas, but also in the public sector as Victorians see the impact of the latest investment in our roads, rail and tram networks.
International developers are also progressively seeking investment opportunities outside of their home countries, and see Australia as an attractive and valuable market. Asian investors and developers, particularly those from Singapore, Hong Kong and Malaysia, are increasingly focussed on Australian residential developments, predominantly in the larger cities of Melbourne and Sydney.
These foreign investors often seek local representatives, such as property lawyers and consultants, to advise them on matters such as site acquisition, and tenancy and lease agreements that are tailored to local standards and conditions. This trend is reflected in the number of briefs for lawyers calling for specific prior experience dealing with Asian investors or offering Chinese language skills.
Similarly, Australia’s regulations surrounding property matters such as development and town planning are becoming more and more complex.
This in turn suggests that greater legal input is necessary while parties, such as investors or developers, are becoming more accustomed to modern intricacies surrounding property related issues.
Further, on the back of the GFC, some perhaps unforeseen consequences stemming from the crisis are continuing to be recognised. As mentioned, the commercial real estate market is prospering, however, big investors are continuing to stall major projects where big price tags are attached.
Instead, investors are opting for the mid-range acquisitions where such deals prove to be more financially viable. Such mid-sized deals enable a broader range of lawyers and firms to advise on such deals, rather than purely retaining those specialist property lawyers who commonly advise on major, high-value projects.
The stalling of such major projects may also be a result of the closing of an election year. In the lead up to a Federal Election, uncertainty often surrounds particular sectors, where a shift in power could affect areas such as infrastructure and property.
It is likely then, that a number of investors deferred any acquisitions, deals or developments, and therefore deferred the need for obtaining advice from property lawyers, until well after the 2013 Federal Election took place last September. There is a notable stalling of recruitment in the lead up to and shortly following an election with a higher level of conservatism taken to recruitment.
Victoria is also seeing growth in high value sectors, such as the health care sector, which is earmarked for continued expansion throughout this year. The sector appears to be in an aggressive acquisition mode, with organisations such as hospitals acquiring land in multiple areas and postcodes, rather than confining themselves to one piece of land.
With increased acquisition comes an increased need for legal advice. A growth and expansion in major infrastructure has also contributed to the continued demand for property lawyers in Victoria.
The current property boom means that Melbourne’s suburbs continue to move outwards, and with this the Victorian Government has implemented projects such as the East West Link and improved train networks to connect our newest suburbs to the CBD, requiring a greater degree of legal advice from Victorian property lawyers.
Another trigger of this spike in activity is a broader trend which involves an increase in in-house activity, where commercial pressures force businesses to look closely at their external legal spend and instead look to grow and diversify their in-house legal offering, rather than briefing their external legal providers as they have done in the past.
With an increase in property projects, we have serviced in-house legal teams seeking to add an additional internal resource. The flow on effect is that firms then need to replace those lawyers who have chosen to move their career into the corporate sphere. As a result, firms are implementing various strategies in order to attract quality candidates in what can be described as a job-rich, candidate-poor property market.
It is clear that we are seeing an active and competitive recruitment market within the property area which is the result of a more global legal market and a prospering economic and property market, particularly within Victoria.
Such demand is welcome in the world of property law, and according to the consultants at Mahlab Recruitment, it shows no signs of slowing in the near future.
Vanessa McKay (pictured) is a consultant with Mahlab