How the rich invest: forget the industry you made money in, pile into property

There are at least a dozen Rich Listers who have become property developers, surfing the boom times and expanding the wealth they created in mining, transport, education and retail.

Forget sticking to the industry you know best and reaping the long-term rewards. Pile into the property sector and make big money while the market booms.

No, it isn’t a line from a property spruiker presentation. It is a strategy an increasing number of BRW Rich Listers are pursuing, taking the big bucks they’ve already made and making even more in real estate.

It is not as if there were not enough wealthy property developers already.

This year’s BRW Rich List, published in The Australian Financial Review Magazine on Friday featured 53 property magnates.

There are at least a dozen more list members who have become property developers in recent years, surfing the boom times and building upon the already considerable wealth they’ve made in mining, transport, education and retail.

HUGE FORTUNES OF THE ALREADY RICH AND FAMOUS

Take Brian Flannery and Tony Poli, both of whom made huge fortunes from selling their respective mining companies in recent years. Flannery, who was also embroiled in the NSW Independent Commission Against Corruption’s 2013 investigation into the allocation of mining tenements at Mt Penny to Cascade Coal, reaped a $530 million payday when Felix Resources was sold to Yanzhou Coal in 2009.

While Flannery, 58th on the Rich List this year with a $817 million fortune, is still involved in mining as the managing director of the listed White Energy Company, he and his wife, Peggy, have also become property developers.

The couple’s KTQ Developments is building apartments in Coorparoo on the fringe of the Brisbane CBD, subdivisions in Hervey Bay and the Elements of Byron hotel project in Byron Bay. The latter is scheduled to open by Christmas and features nearly 200 villas that will be managed by Accor Group.

Reg Rowe made his fortune in automotive retail, having founded what became the Super Cheap Auto chain with his wife, Hazel in 1972. Rowe took the company public in 2004 and stepped down as chairman the same year.

Though the bulk of his wealth is still derived from his remaining stake in what is now Super Retail Group, Rowe has spent the last decade focusing more on his burgeoning property interests.

‘A-GRADE’ INVESTMENT

He formed Excel Development Group in 2007 with Peter Sherrie, the former head of the Urban Development Institute of Australia. Excel acquires “A-Grade” development sites, upon which it has built a variety of residential and commercial projects.

Excel is currently building and selling apartments in Gladstone, Queensland, and undertaking sub-divisions along the NSW and Queensland coasts, including house and land packages near Mackay.

Rural magnate John Kahlbetzer now lives in Argentina, where his agri-industrial LIAG Group is based. Back in Australia, his family manages a variety of businesses under the Twynham Agricultural and BridgeLane Capital banners.

One of those is Jemalong Property Group, which has is developing and managing about a dozen projects around Australia with an end value of close to $2 billion.

Among those are more than 1000 apartments in Newcastle, Mackay, Brisbane and the Sunshine Coast, as well as residential subdivisions in the NSW Hunter Valley and Southern Highlands.

Miner Tony Poli, meanwhile, is cashed up after his Aquila Resources was taken over by Baosteel and Aurizon in a $1.34 billion deal last year.

Poli, a former accountant, has owned an extensive collection of Perth commercial and industrial properties for several years while he was building Aquila. Now he has entered the residential market.

Earlier this year, Poli’s Aigle Royal Developments paid $13.5 million to buy the long-stalled Port Geographe residential development near Busselton in Western Australia’s Margaret River region, 200 kilometres south of Perth.

OTHER MOVERS

Other Rich Listers that have moved into property include Nutrimetics co-founder Bill and Imelda Roche, whose Roche Group has residential and commercial projects on the Gold Coast and in the NSW Hunter Valley and South Coast.

Kevin Maloney’s Tulla Group is refurbishing a CBD office block into accommodation in Christchurch, New Zealand, and Shesh Ghale, who owns the Melbourne Institute of Technology private education business, is redeveloping Melbourne office blocks into residential apartments.

Paul Little, the former chief executive of transport and logistics company Toll Holdings, now builds, lets and manages residences through his Little Property group, miner Sam Chong owns Felicity Hotels Group and John van Lieshout, the founder of the Super A-Mart furniture chain, has a workbook of about $100 million worth of projects with his Unison Projects development company.

SOURCE: The Australian Financial Review   PUBLISHED: 2nd June 2015
WRITTEN: John Stensholt

@Jurds Real Estate – Cessnock and Hunter Valley Wine Country Property Experts – the place to buy, sell and lease property in Cessnock and the Hunter Region.

The Australian Financial Review
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How the rich invest: forget the industry you made money in, pile into property
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