CID discusses the market with members of the Index steering committee
In an effort to ensure that it is firmly in touch with the region’s interior design industry, Index has, for the second year running, established a steering committee consisting of high-profile industry representatives.
And in order to ensure that it was getting a broad and varied view of the industry, Index invited a diverse group of individuals to be a part of this year’s committee.
This included designers that specialise in a range of sectors, clients with a firm appreciation of design, and industry experts with experience of various geographical markets.
Commercial Interior Design sat down with Lu Buchanan, vice president of Index, and selected members of the steering committee, to discuss the key issues and challenges currently facing the industry.
The aim was to get a range of different views from a range of different perspectives. As a specialist in hospitality design, Isabel Pintado of Godwin Austen Johnson (GAJ) was able to provide insight into the challenges that are particular to this segment of the market, while Steven Charlton of Artillery Architecture and Interior Design was able to share his expertise in workplace design, as well as his experiences of working with the Abu Dhabi market.
Meanwhile, Deem Albassam, managing director of Switch Restaurant and Lounge, was able to provide insight into the perspective of the client.
From a business point of view, how is 2010 looking so far and what are your projections for the rest of the year?
Isabel Pintado: We have been really busy. I don’t ever find that it slows down during Ramadan because you normally have to put together presentations for just after Eid. So, your clients commission work before they go on holiday, let’s say in June, and then you are flat out trying to get everything done. Also, a lot of your staff go on holiday over summer so you are balancing out having 30% less staff with the same workload.
Lu Buchanan: We come to it from a completely different angle, from the supplier point of view. And the suppliers are finding it tough. The people that are still here are doing okay, but there are fewer suppliers around now. A lot of our clients are international, mainly from Europe, and they are struggling. They are looking forward to coming here for Index because they see more potential to grow their businesses here.
When it comes to projects, what kind of opportunities are you seeing?
Isabel Pintado: Most of my work is hotel work. I’ve just signed up to do a new hotel in Muscat and we are currently designing two large projects in Libya.
We’ve put a lot of fee bids out in the last three or four months. I don’t think we’ve ever been this busy putting out fee bids. They just keep coming in. Some of my very cynical colleagues say that when people are concerned about losing their jobs, they put out fee bids because it means their jobs will be secured while that whole process is going on. So that might be one reason why there are so many coming in. But there’s also a lot of refurbishment work around, which wasn’t really there in the past. I think refurbishment is becoming the biggest market for us.
Steven Charlton: We are chasing the blue chips, in essence. They’ve got the money and they know how much they want to spend. They’ve already allocated it, so it’s an easier and quicker process to go through.
There are a lot of enquiries right now. There are a lot of people actively looking for office space, so there’s a lot of work, and there’s not really that many companies around to do it – and do it well. The competition is not that strong, in reality. Not compared to the London market, for example.
I think the rates in London are about 3% at the moment; people are winning jobs on 3%. You can definitely get better rates than that here.
Is that specific to Abu Dhabi, where you are based?
Steven Charlton: The Dubai market is actually stronger right now, simply because the quality of stock is much better for the blue chips. And the prices are much better.
I think there’s more consolidation going on, so the Dubai market is still quite active in that sense. Companies with two or three offices are gathering all their resources in one main location, for example. The Abu Dhabi stuff is more in the pipeline – it will probably be more active next year.
Is the market generally becoming more sophisticated in its attitudes towards interior design, would you say?
Deem Albassam: I think in order to make a difference, particularly at this time, you really need to add something to the market. Or else you shouldn’t exist. And design is something that can really differentiate your business. It is the main element of any space. It brands the space, from a marketing point of view.
When it comes to commercial interiors, is there a willingness to invest in modern office concepts?
Steven Charlton: It depends on the client. It depends where they are from, if they are an international company, where their head office is, and so on. We’re starting to push more concepts to the client, so even if they only accept 20% of them, it’s a good start.
This is still not a developed market. We can’t fool ourselves and say it is. It is getting more and more developed, but it has still got some way to go.
Lu, would you agree that this is not yet a developed market, and how does that impact what you are trying to achieve with Index?
Lu Buchanan: I think what’s interesting and, once again, we are coming from a totally different angle, is that our European clients think that the market is over developed. They actually think that the market is flooded and that there is no more work here. What they are now looking to do is use Dubai as a gateway to the rest of the region.
There is a totally different perception coming from the exhibitor/supplier side, particularly in Europe. This is because of all the negative press about Dubai in Europe. They are not here so they cannot see the reality of what’s going on. That’s why we spend half our time trying to send news out to the rest of the world about what is really going on here.
Has the relationship between suppliers and designers changed as a result of the slowdown?
Isabel Pintado: In my particular case, I get approached to receive suppliers all the time, and we do receive them. But whereas in the past we would see everybody, we now ask them to send us a bit of information prior to arranging a meeting.
What we are finding now in the hotel world is that clients don’t buy any originals. That’s the reality. We might get one or two originals in the reception but that’s it. Very rarely do I specify an original and it gets used in the project.
Isn’t that really damaging to your relationships with suppliers?
Isabel Pintado: It isn’t but only because I am honest about it. I tell them, I have specified this, let’s hope it makes it into the project. They are aware that the decision is out of my hands.
I tell my clients that the quality will not be the same with a copy but they don’t care. As far as they are concerned, they can just fit the project out again in four years time anyway, so they don’t need superb quality.
What other changes have you seen in the market over the last year or two?
Isabel Pintado: You really have to fight for your fees. You have to lower them or give additional services. Clients in the past didn’t really try to haggle their fees down. It was not something that you used to encounter here, which was odd. And now, the haggling process takes nearly as long as the design bit!
Also, in the past you could get away with not really staffing a project correctly. You had so much going on that you didn’t have to resource properly. Now, you are resourcing in a completely different way. It’s a strange thing because you are getting smaller fees but the quality of work that you are putting into the project is much higher, because you cannot afford for those projects not to run smoothly.
Payment is also still a problem. Sadly, because of the situation here and the type of clients we have, taking legal action is not really a practical option. It is viable but it is costly. Also, the perception of taking someone to court here is so negative. In Europe if somebody doesn’t pay you, you can take them to court and still have a relationship. Here, you burn your bridges.
Steven Charlton: I think there are still times when you are going to lose jobs because somebody has put something forward that is incorrect, or the fee isn’t realistic, or it isn’t professional and either the client doesn’t know about it, or doesn’t care. So you still lose jobs that way, and you cannot really do anything about it.
Isabel Pintado: Sometimes, losing those kinds of projects is a good thing. One, they’ll probably come back to you in the long term and two, if they are that tight about fees, it is pointless doing the job anyway – unless you know that there is a really big project coming up afterwards, but those projects tend not to materialise anyway.
Steven Charlton: It used to be really difficult trying to understand which companies were looking for a designer because they went straight to the market. They didn’t go down the traditional route of going to the brokers, who helped them find space, and then going to project managers who then put out RFPs. That was my experience in London.
So that was quite a strange thing in the past – trying to work out where to go to find the jobs. The clients don’t tell anybody and then suddenly they’ve already spoken to three designers. Now that is changing. You do find work through more traditional routes, which makes life much easier.
Lu Buchanan: I think the game has changed over the last few years. If anything, the economic slowdown has done some good things because it has raised the bar. Whatever you do, you have to be better at it to survive. Which I think is a good thing.
Steven Charlton: I think you’ve seen who the good companies are and aren’t. You start seeing talent once you strip away how much money you have to play with. It’s easy to specify nice things and spend money on fantastic products, but when you’ve got half the amount of money to do it with, you have to be much cleverer.
Is finding high-quality fit-out companies still a struggle in this market?
Steven Charlton: I struggle to find three good fit-out companies to put forward. There’s not many and even within the companies that you trust, it depends on which individuals will be handling the job for you.
Isabel Pintado: What I’ve found with contractors is that instead of resourcing with fewer but better staff, they’re getting rid of the better staff and keeping the cheaper ones. On some of our sites, I am having an absolute nightmare. Contractors are procuring whatever they want, they aren’t producing samples, and they are doing details the way they want to, rather than the way they’ve been drawn. I’m finding it harder on site than ever.
Deem, as a client, what is the biggest challenge that you face when it comes to working with interior designers?
Deem Albassam: Finding good designers is the main challenge.
And how do you define a good interior designer?
Deem Albassam: To me, a good designer is someone who designs something that is functional and can be implemented.
With many of my projects, I’ve struggled to find people that understand the design but at the same time know how to implement it really well.
Some designers will design something for you with no space for the AC, or without proper lighting. Functionality is really important. Another challenge is finding the right contractors and fit-out people. Most companies, even if we’ve signed agreements regarding schedules and penalties, don’t stick to the agreement. And as Isabel said, going to court is costly, it takes time and it takes energy. You also don’t want to go through that because then the relationship is done. The lines are cut.
What are the biggest and most common design mistakes that you come across in this market?
Isabel Pintado: You see a lot of value engineering. I think that’s something that you can spot very quickly. If you look at projects that were completed here three years ago, you don’t necessarily see that. If you look at projects that were completed over the last 18 months, you see a lot of it.
We need to make clients understand that a cheaper option might look the same, but it is not the same. It’s better to go for a cheaper alternative from a good brand, rather than going for a copy. Copies destroy designs. All of this value engineering, that’s what has taken away the magic of design.
How would you like to see the industry evolve, moving forward?
Deem Albassam: My wish is that the good companies stay and the really bad companies are removed from the market. Before, there were a lot of masks over people’s faces. Now, everything is on show and everything is clear. That’s the positive thing about this recession.
Lu Buchanan: Linking it to the show again, what we are trying to do is bring in better quality. I think Index in the past has had some of the lower range, cheaper products on show and we are trying to move away from that.
We are trying to bring more original, innovative, unusual ideas in to the region. We want to offer more variety and more choice. Quality and innovation are key for us, and for the design industry at large.