Managing a $350M Project in Melbourne with Property Development
Matt Khoo is the managing director at ICD Property. His ambition in high school was to study medicine and become a doctor, but after not receiving the required marks, he decided to study property and construction. He soon found himself developing a deep passion for property development and managing a $350 million project in Melbourne, which has influenced him to excel at working with million-dollar projects.
Join us in this episode of Property Investory to hear how Khoo got hands-on experience at JLL before completing his master’s, how he developed his skills as a financier that has ultimately allowed him to be the successful managing director he is today!
We find out what Matt Khoo’s day to day role is as well as the projects he is currently working on.
I’m the managing director at ICD Property. We’re an Australian based property development company. So Australian based, but we have projects across four States in Australia. Actually, I should correct myself, three States in Australia. I’m actually kind of thinking of four projects. We’ve got one in Geelong, but it’s not a different state, unfortunately. It’s very close and very easy to access. But yeah, so we’ve got four projects across three States in Australia and also a project in Auckland, New Zealand. Projects are largely mixed use projects. Three of which CBD projects in Melbourne, Sydney and Adelaide. In Melbourne, we’ve got a close to 600 apartment tower going up on King street and that’s just starting construction now. We have a Sydney project, which is a land joint venture with the City Tattersalls Club. 125 year old under 25 year old Tattersalls club. You know, big part of the community there. And a really centralised project sits on Pitt Street, Pitt Street mall. You’re from Sydney, so you know.
And it’s really exciting. We’ve achieved stage 1 of the DA on that project, which sees us redeveloping the Tattersalls Club, the commercial space. That’s sort of the first few levels and within the heritage frame fabric as well. And then above that developing a boutique hotel and then above that a residential tower. So it’s a really exciting project, actually we just commenced a design competition phase as of last week. So we’ll soon have an architect assigned to it as well for the tower.
Due to the DA process being time-consuming and difficult in Sydney, Khoo explains the process it took for this particular project.
I think my celebrations when we got to stage one of the DA probably says it all. We’ve had that project since 2014 and it’s gone through a number of challenges and hurdles. We actually were knocked back in our first attempt to get the stage one of the DA and then worked really closely with the council to finally get there. So it was not a quick process.
I totally understand. Nothing’s quick with council any day, to say the least.
Interestingly, during this challenging time with COVID and all they’ve looked at how they can actually expedite processes and streamline. And we’ve seen that we’ve benefited from a bit of that already. Especially through this stage two process, it usually requires physical models and all that which are very practical with the circumstances. So that’s been able to shorten a bit of the timeframe and hopefully, you know, there are other areas that are questioned and challenged and especially because we are wanting to build or bring a lot of stimulus to the economy. The construction industry and development industry is a big part of that. We’re talking like nine, 10% of GDP just directly through work sites. And then when you look at the flow on to other consultants and material supplies and all that, you’re looking at more like an impact of 40% of the economy. And that’s with looking at sort of mining materials, material suppliers, developers. There’s a really wide-spanning sort of impact.
Khoo delves into what a typical day in his life looks like.
In my particular role a lot of my focus is around business strategy, which is definitely ramping up a lot more as the climate and the uncertainty into the near and medium term future. But it’s also supporting you know, with the large challenges for our delivery team. So in terms of the development team, identifying big problems and challenges and hurdles but also problem solving with them. I’ve never liked to take that autonomy and management of that away from them, but being really sort of a standing board, and dealing with those challenges. And we do that sort of as a leadership director group with our development teams at least on a monthly basis, but more frequently as the large challenges arise. I am also a big advocate of getting involved in things that you’re passionate with. And for me, I like to get quite involved in new acquisitions and partnering as well. So a lot of our projects, actually all of our projects, are in some form of a partnership. I mentioned it before with the Tattersalls club.
In Adelaide, I didn’t get to speak about that before, but with the PPP, it’s in Adelaide over there. And that’s a redevelopment of a landmark project central market arcade. And doing it with them and with an (inaudible), which is a large Chinese group basically focusing on the manufacturing, but it also has a really strategic system type relationship.
What does PPP stand for?
It is public-private partnerships, so really working with the government and to develop critical community infrastructure but with a sort of a private aspect of it.
Matt Khoo Shares his Early Beginnings
Before delving into his property journey, Khoo shares a bit about his upbringing.
Born and bred in Melbourne. I haven’t moved too far from that. And look, I’ve definitely toyed with the idea of going overseas and working there and I’ve travelled a fair bit. But you know, got to love Australia, phenomenal. There’s a good reason why a number of our cities often get in the top 10 of most livable and most recognised cities. I went to school here as well. Went to a local school, high school and then studied at Melbourne university so really haven’t moved too far.
He reflects on his time at Melbourne University and talks about his field of study.
I studied a Bachelor of property and construction which they don’t have in the system now, it’s moved to an undergrad system, so I’m a bit older. I had a bachelor in construction and then commerce and then later on I came back to study my master’s in finance.
He goes on to share whether he gained first hand experience before returning to university to complete his master’s.
As part of the property and construction course, the requirement was actually to get industry experience before you graduated. And that was really insightful. Gave me a lot of understanding about the practical elements of my course while studying it. I actually worked at Jones Lang LaSalle and did research consulting, that really helped to understand the sort of macro elements that impact the property industry. Also an understanding of our clients who were investors and developers and what they really cared about.
Khoo explains the job description he fell under for this kind of position and how he was hired.
It was a kind of a mixer, I was very fortunate to get a full time role there. So I got a lot of experience and then kind of moved my final two years of my studies into part-time. And so I found that to be really valuable. And so yeah, they treated me as full time, I guess in the first year, essentially.
How long were you there for?
I think it was about three years in total.
He delves into the kind of experience he gained from working in a large development company.
It was a phenomenal base to start with because it wasn’t a specific transactional role in that, you know, if you’re doing leasing and property management or something, you learn a lot about that particular part of property. Working in research and in particular the consulting part. You have specifically tailored investment development questions that want to be answered. And they stem from everything around the macro and micro economics of property and the fundamentals that drive property investment development decisions. all the way through to actually doing feasibilities and understanding, you know, like what values are and how to make decisions from that. So it really gave me a great appreciation and understanding of the real world decisions in property investment and development.
He looks back on the kind of projects he worked on during this period of time.
One that was really interesting, it didn’t actually end up going ahead because of the GFC, that was around the time when I was working there and it was actually a Dubai group that was exploring what is now Melbourne quarter. There’s a large development that sits on the edge of Melbourne CBD and Docklands and they had this grand vision of essentially doing the tallest tower in Melbourne and comprising all luxury sectors of residential and retail and commercial and hotel. And being able to then explore the study of luxury residential, and back then there wasn’t much apartment development even in the CBD to consider. So when you’re doing a study, you’re generally trying to benchmark other examples, that’s your sort of way of knowing it is feasible, it’s like how a valuer would look at other properties to see if this stacks up to that value.
It was really interesting because there wasn’t much around in Melbourne. So you kind of have to look globally and look at what best practice is and take a view then of how Melbourne could evolve. And yeah, 10 years down the track with Sydney and Melbourne, you’re seeing a lot of residential development in the CBD. More and more the apartments are becoming bigger and you’re seeing people accept luxury living and family living in the CBD. It’s really interesting to see how that practice has evolved.
Khoo reflects on what inspired him to jump into property development and construction studies.
To be honest, I can’t say that my parents had any influence in my endeavours into the property and my endeavours probably are a little haphazard and I’ll explain all that. So, my parents, my dad has always been investing in shares. Not so much on the properties base. Probably all they’ve ever owned is their house. And so I never really was exposed to property investment from an early age. And funnily enough in high school, I actually always wanted to be studying medicine and I got to year 12, didn’t get the grades to get into medicine. And so I didn’t really have a backup option, to be honest. I kind of was like, oh, that’s what I’ve always wanted to do and now I don’t know what to do.
I kind of went at it quite logically and I thought well I have decent grades and I could probably do a double degree in commerce and business sounds like, you know, the obvious choice and what should I marry that with? Because I don’t want to waste my grades, I should probably do a double degree. That’s an Asian mentality from my parents. And I looked at all the options available to me and came to property construction and I was like, well, I get that, it’s tangible. It makes sense. I can see how I would utilise it. And I think probably the thing that sold it for me was I was looking at the Forbes 100 or the 100 rich list and I realised 75% of those people made their money through property.
I’m not saying that’s the way you should pick your future career and university courses. Definitely not an advocate for that. But I think as haphazard as it was when I got to university I realised I actually was really interested and really passionate about property. And I think that’s how you should probably choose your university course. Do something that you’re passionate about. I think what I really love about the property and what sold it for me was the tangibility of it. I think of why I always wanted to be a doctor was that you’re helping people and you can see the outcomes of it. And for the property, it’s the same. Like you turn something from something to make it better. Obviously my mindset back then was about making money, but actually, you know, better is about how you are influencing and impacting the community and those around.
He reflects on how his life would have been different if he had studied medicine and became a doctor.
It’s funny because outside of my work at ICD, I do some personal development but you know, developments are quite capital intensive, so I actually do those with a couple of friends from university and from high school. Both of them are dentists. So I guess you don’t necessarily need to study property or even be working in the field to get into it. What is very handy, is in a medical field, those who are practitioners they’re very favourable in terms of finances. That’s very handy, having good cash flow is important.
Khoo goes on to share where he went to after his time at JLL.
I actually was made redundant, that was how I left. But another thing that I reflect on is the positives, it is a very uncertain time for a lot of people right now. People are losing their jobs. And it’s really challenging. I think it’s important to know that there are positives. You’ve got to have a positive mindset to approach every challenge. And the redundancy gave me an opportunity to reflect on where I was at that time. What I really wanted to gain greater knowledge in was actually finance. I had a lot of understanding about macroeconomics and how to look at the fundamentals of property and how that influences specific assets and developments, but actually going through development, I needed a great understanding of finance. And I went back and studied, I was fortunate enough to get a job with a bank as well at the time and navigated my way and eventually got into the property development and investment lending space within the bank.
He explains how long this journey was before he started working for ICD Property.
In total about probably six to seven years all up. And then how I actually got into ICD was…so ICD has been set up by an old school friend of mine and his family. The Mai family and you know, we would catch up when I was working at ANZ in their property division there. And he wanted to understand how to navigate and approach finances for ICD’s first development project in Collingwood. And I wanted to understand more from him, like how they would go about purchasing sites and developing them. So we had a win-win relationship, mutual and beneficial relationship. And one day he called me up and asked me about a particular site in Melbourne CBD and how he would go and approach it from a financier’s perspective.
I sort of explained it and Michael then said, look I actually want you to come over and develop this model. And that was my opportunity, but at the same time I’d never actively managed a development before. So in my own sort of words, I said no to Michael in my own different language because I was like, look, I really care about you. I care about your company. I don’t want to come in and make a mess of it. But this is something that Michael has instilled in me is you have to have a lot of faith in people and their capabilities and if you do that, like it’s self fulfilling in a sense. And so he had a lot of trust, a lot of faith in me.
He said, look I think you know with your experience as a consultant to developers and investors, and as a financier as well. Taking all that skill and knowledge, you can apply it to development management. And he was really right, having that framework, a structure to approach things, it was surprising that it was really efficient and a useful way of developing or managing a project. And so that that project ended up being an extremely successful one for us. It was the EQ tower project in Melbourne CBD, 633 apartments, $350 million project. And it won multiple awards. We managed to secure an institutional joint venture partner out of China. It was our first international project. So from many angles, it was a huge success both for the company and for myself personally.
As the successful managing director was dealing with a hefty amount of money for this development project, he goes on to talk about the extensive process of putting the deal together.
With that particular project, the family that I work for, the Mai family, they do have a substantial amount of wealth. Personally for myself I don’t think I’d be able to do a large project like that, it is very capital intensive. A lot of that is upfront. And so we did have that backing behind us. But there were a lot of milestones along the way that needed to be achieved. One thing that was important for us was the terms in which we secured the project or the site. So we had 18 months of settlement terms that enabled us to secure our DA in that timeframe and in Melbourne at that time we were able to secure that in five months. So that was a really quick process that really helped achieve all the other outcomes. So we were able to secure a builder, finance from a local bank as well for debt and our joint venture partner. As well as sell out all the apartments before we even started construction. So the day we settled, we pretty much started construction, so 18 months.
He talks more about the joint venture partner with the Chinese company and how much they invested in the project.
Breaking it down to the capital stack, you have your equity component which ICD and this joint venture partner contributed. And thinking about it, that was roughly 30% of the total build cost. And then the financier that the bank, or the senior lender in that instance, provided the remaining 70%. But the split was roughly 50% between us and the joint venture partner.
Is that where your expertise working in the finance industry was able to help contribute towards putting this deal together?
Definitely, I guess structuring a deal with the joint venture partner as well as knowing how to approach the bank to make sure we had all the information right and the project at the right stage to achieve the finance. Because it was obviously a very large amount of debt. Certain things like ensuring that all of our pre-sales or firstly that our design was correct. Banks don’t usually support below 40 or 50 square metre apartments. The apartments were structured the right way with good natural light and all the other things that are important from a financier’s perspective. Making sure that, you know, the sales rates were within the market range. Making sure that we had also got a good mix of local and overseas buyers as well. That we contracted with a tier-one builder. And that we as ourselves and our joint venture partner were considered a strong sponsor. So all those things are key to what a financier is going to look at. Sponsor, builder, and structuring and all of that. I think that’s where I was able to bring that skillset from being on the financier’s side to know exactly what they would consider important.
Khoo shares where he mainly learnt these finance skills that he has developed over time.
Theoretically you do learn bits and pieces of it at university. Practice makes perfect and I think I definitely let up like 95% of it through work experience both in terms of the feasibilities and expectations on returns from when I was at JLL. But in terms of the more detailed understanding of how to assess a good project, how to de-risk it and all that was through finance and through working at ANZ.
Everything You Need to Know About Property Development
The Courage to Purchase his First Property
Aside from investing in property development, Matt Khoo delves into the very first property he purchased.
The first property was the apartment, which my wife and I purchased when we got married. And the thinking behind it was right, we want something with all the amenities around it that we would use. And also one that we could possibly see as an investment long term once we moved out into our family home. And it’s funny, at that stage of your life, what your interests are very much determines what the house looks like or the property that you purchased. And then now being in a family home, you never sort of see yourself in that.
But just trying to reflect on the emotions of it, it’s really quite daunting actually. When we knew we liked the property, we were very nervous to go to auction. And so we ended up making an offer beforehand. And I think when you make offers beforehand it’s obviously to a point where the vendor will be satisfied. Also the agent is advising, you know, ‘you’re not going to get a better offer than in an auction’. So you do pay. In my mind, especially if the vendor isn’t desperate, you pay sort of top dollar or at least sort of that market. But as a buyer I think you also really want a property that gives you that certainty.
Did you purchase that property in the Melbourne CBD and how long ago was that roughly?
It wasn’t Melbourne CBD. It was actually South Yarra, which is in the middle. But close to the city, and that was in 2010.
After purchasing his first property and working in finance, he goes on to share at what stage he jumped into property development.
I was already working at ICD probably for a couple of years. My first personal development actually came through one of my friends, who was already doing development and he wanted a partner to explore, you know, more complicated types of development than just the simple tenors, which he was doing a fair bit of. And so I came on board and we explored it and did a whole bunch of feasibilities and other considerations and ultimately we landed at the conclusion that we could do all that, but actually doing the 10 houses, the simple form was going to be easier to secure finance, lower risk to sell, lower risk and less capital to develop, to build. And the returns were actually stronger as well. So I was like, look I get you want to do this, maybe you’re kind of bored of doing the simple stuff, but actually it looks like doing the simple stuff is better for you on many perspectives. And that started our relationship in partnership to develop together. And you know, now I’ve done four or five of those simple types of townhouses and it’s just a good one to have on the side. I get probably a little bit more involved in design elements and stuff. Whereas in ICD, you know, we’ve got architects who are the experts in that. And you’ve got a lot of helping hands.
Khoo shares how many townhouses he was developing with his partner at the time.
Most of the sites, or the projects, are generally about three to five townhouses. So really simple. We’re talking about buying a residential block, you know typically 700 plus square metres, corners are the best. And then usually north facing with a sort of a vertical direction, if that makes sense. But obviously it depends on the zoning and planning restrictions on a particular site. But yeah, generally that’s the sort of size.
700 square metres is a small size. How many can you actually fit on there? I guess it depends on the council too, but how many can you fit on a block like that?
Between three to five.
If you get a 700 square metre block in Sydney, most of the time, depending on which council, most you could do is a duplex. They wouldn’t even allow you to build that many on there, which is really interesting. I guess it’s depending on the council, depending on location.
Even in the short time that I’ve been developing the councils have changed their regulations. So you do find that what you possibly could have done a few years ago is probably not possible now. And that’s around trying to restrict the density in some of the suburbs.
He goes on to reveal some of his worst investing moments and the lessons he learnt.
A big risk for a lot of smaller developments, actually a risk for any development, is around the builder. We’ve actually had a builder fall over on one of our projects and we’re still completing that project now probably a year after we’d like to have completed it. So that has a real material impact on your outcomes. And sort of reflecting on how we could have mitigated against that. I think it’s really important to do a greater assessment that you’re looking to engage. And I think making sure you understand their financial capacity and cash flow, you know, builders rely heavily on cash flow and when they are in trouble, they start to turn the tap off from their subcontractors and then you get issues there. So digging into that, whether you are asking the subcontractors, whether you are looking out for any court or you know claims against the builder online, and understanding how much work they’ve got on. A lot of builders that go broke are generally ones that are looking to grow really quickly. They have too much debt. As we want to keep doing the same thing, as we talked about before, like it’s hard to stuff up something, you know really well.
He reflects on the process for choosing this builder for the particular project and when he realised things were not going right.
I think that we probably prioritised as an investment, we prioritised price. But also prioritised a gut feeling, they seemed like a good builder. They’re very organised, very structured. But probably didn’t ask the right questions or we didn’t ask the right questions around the capacity and any sort of bubbling issues going on in the company.
I guess that happens when we’re going through the whole process as well, due diligence, we try our best but sometimes it doesn’t hit the mark.
On the face of it, I think people can dress things up really nicely. It seems okay. But yeah, you do need to dig in further.
He goes on to share some of the moments where everything just clicked for him.
For me, I had a lot of doubt in my capabilities going into ICD and when we were able to secure that joint venture partner, an institutional group and a $30 billion company based out of China listed on the stock exchange there. To invest into our project that I was managing, it to me gave a lot of validity that I’m doing something okay. And I think the lesson that I learnt from that is there is no right or wrong way to develop projects. I guess you just have to find your own logic and make sure that your fundamentals make sense. For me, I drew a lot on how a financier would approach property development. I also, where I didn’t know what was the best way of doing things, I benchmarked the best out there. So I looked at what other people were doing globally, locally. And I was like, well if they did it and it works, just copy it.
He further explains how he has been able to put these large property developments together.
It doesn’t matter what scale it is because even sometimes the individual smaller projects, you’re talking big capital, for anyone, for myself included. Their big decisions and it’s easy to focus on the downside. The what if and the negative rhetoric that goes with that. And it’s often that, which really holds you back from making crucial decisions and sort of helping you propel forward. I think something I learnt from both Michael who is my boss and his father who’s had a lot of experience running a large company, you can’t get rid of all risks.
Otherwise you might as well just put your money in the bank or wherever else you can possibly make some risk-free money.
But if you can satisfy yourself that you’re comfortable with the worst case scenario, the exit strategy, if things don’t work out with your decision then you can sleep at night. So if you know that, and go okay, I’m going to buy this site and I’m going to develop it, but if the feasibility doesn’t stack up or the market turns, whatever it is, I can sell this site and possibly lose a hundred thousand or $200,000, then you can live with that, then you can remove the stress. And I think that’s a critical part about making decisions, and sleeping at night.
Having the Right Strategy is Key to Success
He talks about the sort of strategy he and his team implement to ensure they reach a certain stage in the developing process.
It’s worth having more than one scenario. If you think that everything’s going to go this way, then you’re going to be in for a rude shock. But generally we’ll run probably three scenarios. A base case, a target and a worst case or a stress case. And really the focus is more on the base and the stress, like what do we want to achieve and see is realistically possible. And you know, what if we get delays or things cost more than they should and all that sort of stuff. So that’s the process and then really our decisions would be based on, what’s the return we’re getting from the base case? Yep, we’re satisfied with that. Like that’s a good use of our money. And then the stress case is like, okay, what’s going to happen if it’s the worst case scenario, are we going to lose money? Are we going to have enough money? All those sorts of considerations and then where we’re comfortable with that and have the mitigants in place to ensure that is the worst case that’s going to happen, but also less likely than it could if we didn’t mitigate against it.
Due to the current unforeseen climate, he goes on to explain how the changing environment has impacted some of his projects.
I’ll probably use the most, not controversial, but one that I think has been impacted the most from this. And I would say that Adelaide project because we were in the very early phases of that, it’s good and it’s bad. I wouldn’t say bad even, it’s good in that we haven’t got everything rigidly in place. It’s a development of a 16,000 square metres office. It’s close to 10,000 square metres of retail space. It’s got a hotel in there. And it’s got residential. So if I was to say if we’re completing that project now in the state of the market, retail is shot, offices have challenges on the horizon. The hotel hasn’t been operating for, you know, the cost of the world. And I think the latest reports, international travel is going to not go back to normal until 2023.
There are a lot of headwinds for a project like that, that’s in design, in the sense that we need to consider and work within a very uncertain framework. What is the office going to look like at the end of this? Like is the new normal meaning that people don’t work in office spaces anymore. I don’t think that’s the case, but how much is it going to change and how do we build into that? And we’ve done part of that by restructuring the way the office is designed. So we were originally going to have two towers. Now we’re combining them with a central core, which enables you to have two separate areas still. So there’s a lot of flexibility in the sizes and spaces. Or we could have a large contiguous space of two and a half thousand square metres.
That’s one element of it. I guess with the office as well, in this challenging time we want to create positivity and we’d like to work with the government, various bodies to potentially firm up demand in that, so I know that there’s a number of government apartments as well as sort of groups associated with government that are looking for space. They want this development to go up and go out quickly. That’s another way of sort of supporting it. So I’m looking at those areas for office. For retail, retail is a big one, everyone’s now gotten used to online. How does that change the retail space? And I think it was already heading in that direction, just probably a bit slower than it has now. So I think the fundamental retail is really making an interactive entertainment focus space. Like it’s not just about buying your goods because we can buy our goods. You’ve got a supplementary source for that. But how do you make it something that is not replaceable.
Khoo delves more into his Adelaide project, and whether they are focused more on residential units as it is predominantly commercial and office space.
It does have close to 300 apartments in there. And you know, that’s another area to explore as well. There’s a sort of rising trend towards build to rent development. So in terms of mitigating potential residential sales risks, you could look at, and the focus on the build to rent is around yield and yield is stronger in Adelaide than they would be in Sydney and Melbourne. So that’s another thing to sort of explore and all these things. You can start to see with a more complex project, there’s a lot of things to consider in the current environment.
He shares with us exactly how he manages all of these projects and how he empowers his team to ensure they get things done.
With the team, we’ve set up a system where the team has full empowerment and it’s then up for them to come to us when they need support. Because we are on regular touch points. I should say like me and the leadership team, we get regular updates from the guys on things that matter. They leave us out on the very specific details that are going on. But we get to understand the key drivers, the things that are fundamentally going to impact the value of a project. And that’s probably like a good lesson learnt for those out there, is that you can focus on the colour of a tap, or something small like that, you know, a tile that’s $30 versus another tile that’s $28 or something like that. But if you take a step back and look at things that are going to make more difference, they’re more fulfilling I think, and you know, it gets bogged down. And they’re obviously going to make a greater impact. So it might seem like I know a lot about the project. I think if you asked me the details of things, I would struggle for sure. But in terms of going back to your question, managing it, having good people around you that you can trust is key.
The Meaningful Reason Behind the ‘Why’
With his impressive achievements as the managing director for ICD, he delves into his biggest why for doing what he does.
I can’t say that I started off with the why, when I started working at ICD, but it’s definitely evolved, especially now in this leadership role at ICD, I’ve realised the importance of the why, the why drives everything. If you don’t have a reason for doing what you do, you’ll fizzle and burn out because you won’t have that drive. If I was to sum it up in one sentence as a personal why, for me, I want to do stuff that’s going to make my kids proud of what their dad’s been able to achieve. And having that really deep, meaningful reason for doing something I think is really important and I’m sharing that with the team. I realised that it’s not an isolated thing.
Everyone that works at ICD has a really deep, purposeful reason for developing what we do. And we don’t want to develop things purely just to make money. The important aspect is a commercial as a corporation. But we’ve actually got a motto, that we want to develop buildings that stand the test of time, beautiful buildings that stand the test of time. What that really speaks to and captures for all of us is this idea of passion. You know, you’re doing something you’re passionate about. It’s developing that sustainability from an investment perspective, from a community perspective. So you’re delivering an end product that you know is good for the people you’re developing for. That feeling of, yep, I’ve done something good for our purchases. We’re not shortchanging them. They’re going to get a great investment themselves. They’re going to get great enjoyment out of the product that we’ve created for them and for our staff as a stakeholder themselves. You know, that sense of pride. We developed a landmark project that I can be proud of, that I can showcase to my family and friends and say I was involved in that. That’s the why.
On the Matter of Educating Oneself
He goes on to talk about the kinds of resources that have helped him along his journey.
Podcasts are great, but there is one book I’d say, and it’s not even a property book. It’s Benjamin Graham’s Intelligent Investor. What I learnt from that was…and that’s a book that Warren Buffet often refers to. I think Warren Buffett is probably an important influencer in the way I go about looking at investments. One thing is, and this is why I don’t go into shares, is understand what you invest in. Know to the core, the fundamentals of what you’re investing in and that it makes sense to you. And anytime I’ve lost money is investing in shares off people’s recommendations, so that to me is really important.
Know what you’re investing in and make sure that you’re investing in good value, buy at the right time and the right property, so the core. But outside of reading, there are podcasts. Mine are mainly around leadership rather than so much on the property side of things. But EntreLeadership is a podcast that has been really useful for me. And that’s more around actually interactions and leading staff. Because as I mentioned before, like how do you manage all this? Actually for me now, in the way I go about running the business is around how I can interact with and influence staff, and influence consultants and stuff. I guess on a smaller scale it is still important, treat people well and you’ll be rewarded with dedication, loyalty, and results.
I think structuring things to do that is key, so EntreLeadership is one. Actually at work, we’ve aligned with a group called Performance Shift, with Kirk Peterson. He comes in and again, it’s more around self management and team interaction management. From a property side of things, I look up to Michael who is my boss and his father as well who runs like a conglomerate and really understands the fundamentals around property on a global scale. And there are some really wise people outside in the property industry. One is the head of EG Funds management, Adam Geha. Every time I talk to him, I think I get wiser.
And then there’s other people that I’ve come across, my ex boss at ANZ, I still keep in touch with him a lot, Adrian Blake. He’s phenomenal at knowing the property industry and trends and all that sort of stuff. So I think like whenever you find people that really inspire you and motivate you and also give you great insight, you have got to hold onto those people.
If he had some time to reflect on his past self 10 years ago, we find out what he would have said to himself.
10 years ago would have probably been smack bang when I got made redundant. So that would be the perfect time to impart some wisdom. The positive attitude is very important in life. You can look at anything half full or half empty and you will achieve a lot more if you’re positive about any situation at all. I guess it’s sort of a guiding point, I would say that to my former self. I also feel like I got into property development on my own part a lot later. I definitely thought about it earlier, sort of around 10 years ago, but never took the dive into it. It took a friend of mine to influence and persuade me into it. But if I was able to speak to my former self, I would say just give it a go. The worst thing that can happen is you lose your money and you get a really good lesson in life.
What’s interesting as well, you mentioned back in 2010 was when you first purchased your first property, which was that apartment. That’s around that same time, wasn’t it?
The timing, not sure whether it was before or after. I have a feeling I got made redundant before then I got a new job and then purchased the property. Because it was late 2010 when we purchased the property. But I think I recovered pretty quickly out of it.
He looks forward to the future, where he shares what is happening for him in the upcoming five years.
Last year, we picked up all these amazing projects. The one in Adelaide, the one in Melbourne and Sydney, and the Auckland project. I’m really excited to be doing those projects and over the next five years, that’s what’s going to come to fruition as well as the one in Melbourne, which will be completed at that time. And I’m really excited about what’s installed for us in the next year or two. There’s a lot of uncertainty, but I think once we settle down on these other big projects, I’m really keen for our team to be purchasing and getting involved in more projects.
Last question for you is how much of your success is due to your skill intelligence and hard work and how much of it is because of luck?
That’s a good question. Well I’m a dad, I don’t think of myself as very skillful, mainly hard work. My thinking around luck is you make your own luck. You’ve got opportunities, everyone’s got opportunities in their life, it’s what you make out of them. So you want to call that luck, something just drops in front of you, you got to pick it up. And so I would say 90% hard work. And I don’t see hard work as a negative either. The hard work is enjoyable when you get the outcome. I think then five, or 10% is skill.