1 00:00:10,880 --> 00:00:13,880 Speaker 1: Hello, and welcome to the Australians Money Puzzle Podcast. I'm 2 00:00:13,960 --> 00:00:17,479 Speaker 1: James Kirkby. Welcome aboard everybody something different today. I'm coming 3 00:00:17,480 --> 00:00:20,120 Speaker 1: to you from the Gold Coast at the National Property 4 00:00:20,160 --> 00:00:24,680 Speaker 1: Conference here and marvelous hunting ground for finding good guests. 5 00:00:24,720 --> 00:00:26,920 Speaker 1: Someone I have wanted to have on the show for 6 00:00:26,920 --> 00:00:30,120 Speaker 1: a while is Shane small And of the Central Element Group. 7 00:00:30,360 --> 00:00:33,080 Speaker 1: Shane's owned a real estate chain and more recently is 8 00:00:33,080 --> 00:00:36,760 Speaker 1: doing some very interesting property developments, mostly around Sydney. You 9 00:00:36,840 --> 00:00:39,559 Speaker 1: might know them the Minerva Building at King's Cross and 10 00:00:39,600 --> 00:00:45,000 Speaker 1: a very interesting hotel he's doing on Paddington Street in Sydney, 11 00:00:45,200 --> 00:00:46,960 Speaker 1: which is going to be the first twenty five hours 12 00:00:46,960 --> 00:00:50,279 Speaker 1: hotel in Australia. And they're very interesting. But what I 13 00:00:50,360 --> 00:00:52,800 Speaker 1: like about this is these developments in particular is that 14 00:00:52,840 --> 00:00:56,040 Speaker 1: they are thoughtful and they actually improve the fabric of 15 00:00:56,080 --> 00:00:58,639 Speaker 1: the areas. Often they are art deco. He's somebody who 16 00:00:58,640 --> 00:01:02,200 Speaker 1: can really articulate of what matters to investors in today's market. 17 00:01:02,240 --> 00:01:02,840 Speaker 1: How are you, Shane? 18 00:01:02,880 --> 00:01:05,240 Speaker 2: Thanks you great, James, Yeah, thanks thanks for the chat. 19 00:01:05,360 --> 00:01:07,720 Speaker 1: Lovely to have you. Many of the listeners of the 20 00:01:07,720 --> 00:01:11,039 Speaker 1: Money Podcast, they're at the starters there where you were 21 00:01:11,080 --> 00:01:13,400 Speaker 1: once upon a time, right, So they're interested in properly, 22 00:01:13,400 --> 00:01:16,240 Speaker 1: they might have some investments they might start, and residentially 23 00:01:16,240 --> 00:01:18,880 Speaker 1: they might be thinking of subdivisions, that sort of thing. 24 00:01:19,000 --> 00:01:23,480 Speaker 1: Just basically they're just getting going. You're at a very 25 00:01:23,480 --> 00:01:29,560 Speaker 1: advanced stage in it. But I imagine calculating risk is 26 00:01:29,600 --> 00:01:31,000 Speaker 1: the core of what you do. Am I on the 27 00:01:31,080 --> 00:01:33,080 Speaker 1: right tracker is a fair assessment. 28 00:01:32,760 --> 00:01:35,720 Speaker 2: Yeah, definitely, and more so than ever in the post 29 00:01:35,800 --> 00:01:38,640 Speaker 2: COVID environment. It's been a really interesting journey just trying 30 00:01:38,640 --> 00:01:40,920 Speaker 2: to stay on top of course of construction environment and 31 00:01:41,760 --> 00:01:45,040 Speaker 2: effects on program and it's really interesting the off plan environment. 32 00:01:45,040 --> 00:01:48,360 Speaker 2: It's an interesting place to be as well. So yeah, 33 00:01:48,400 --> 00:01:52,040 Speaker 2: calculating is probably an understatement. There are many inputs and 34 00:01:52,160 --> 00:01:53,480 Speaker 2: it's constant working progress. 35 00:01:53,600 --> 00:01:56,840 Speaker 1: You say COVID, you mean the inflation kick on the 36 00:01:56,880 --> 00:01:57,840 Speaker 1: building materials? 37 00:01:57,880 --> 00:01:58,560 Speaker 3: Is that what? Yeah? 38 00:01:58,640 --> 00:02:01,960 Speaker 2: Definitely the effect on cost and I think what's been 39 00:02:02,040 --> 00:02:04,760 Speaker 2: probably not promoted in the same way we all know. 40 00:02:04,840 --> 00:02:07,840 Speaker 2: It's been an inflationary environment for construction, which is which 41 00:02:07,880 --> 00:02:11,280 Speaker 2: has made a lot of sectors quite tough, particularly the 42 00:02:11,360 --> 00:02:13,800 Speaker 2: lower market sectors, which is certainly one of the reasons. 43 00:02:13,919 --> 00:02:17,520 Speaker 2: It's predicated our move to the ultra luxury area. 44 00:02:17,560 --> 00:02:21,160 Speaker 3: But it really, it really was particularly. 45 00:02:20,600 --> 00:02:23,760 Speaker 2: Compounded by program time that it started with the supply 46 00:02:23,840 --> 00:02:26,520 Speaker 2: chain constraints, and of course, so time in itself has 47 00:02:26,560 --> 00:02:29,000 Speaker 2: been a challenge I think for all developers, because of 48 00:02:29,000 --> 00:02:31,160 Speaker 2: course time is money, and any compounds. 49 00:02:31,560 --> 00:02:35,200 Speaker 1: This is why all these development seemed to take ages. Yeah, yeah, 50 00:02:35,400 --> 00:02:38,920 Speaker 1: I mean I drive past that looks started in COVID. 51 00:02:38,919 --> 00:02:39,840 Speaker 1: It's still not finished. 52 00:02:39,919 --> 00:02:40,560 Speaker 3: Yeah, that's right. 53 00:02:40,600 --> 00:02:44,280 Speaker 2: I mean there's all types of delays that are potential delays, 54 00:02:44,320 --> 00:02:46,520 Speaker 2: and of course it all starts in the planning area, 55 00:02:46,560 --> 00:02:49,799 Speaker 2: and that's that whole sort of red tape area, bureaucratic 56 00:02:49,840 --> 00:02:52,480 Speaker 2: area that of course is front and the center. And 57 00:02:53,840 --> 00:02:57,079 Speaker 2: still I think the governments are trying in some cases, 58 00:02:57,160 --> 00:02:59,640 Speaker 2: but there are just so many forces at play that 59 00:02:59,720 --> 00:03:03,079 Speaker 2: it's difficult. It's a difficult space to unwind in a 60 00:03:03,120 --> 00:03:05,680 Speaker 2: way that will have a meaningful effect on both supply 61 00:03:05,720 --> 00:03:11,560 Speaker 2: and affordability. So yeah, so's it's a time that you 62 00:03:11,680 --> 00:03:15,239 Speaker 2: have to be more prudent. The one percenters, zero point 63 00:03:15,320 --> 00:03:18,079 Speaker 2: one percenters, and as I said, they all compound through 64 00:03:18,800 --> 00:03:21,120 Speaker 2: and we've worked really hard to make sure that we 65 00:03:21,200 --> 00:03:23,079 Speaker 2: focus on the areas that we think we can be 66 00:03:23,080 --> 00:03:25,280 Speaker 2: best in class at and work to a best in 67 00:03:25,320 --> 00:03:28,560 Speaker 2: the world standard at. It's not without its challenges because 68 00:03:28,560 --> 00:03:32,200 Speaker 2: we're in that very luxurious and more complex end of 69 00:03:32,240 --> 00:03:34,040 Speaker 2: the premier market. 70 00:03:34,920 --> 00:03:37,520 Speaker 1: And there's always been there, right, but I imagine it's 71 00:03:37,560 --> 00:03:41,680 Speaker 1: of recent times it's become more defined in the market. 72 00:03:41,920 --> 00:03:44,360 Speaker 1: Like if someone was a starting and property they they 73 00:03:44,440 --> 00:03:47,680 Speaker 1: might almost be afraid. You say, oh, well, it's really tough. 74 00:03:47,720 --> 00:03:51,720 Speaker 1: It's very uncertain, there's some inflation, we don't know where 75 00:03:51,720 --> 00:03:55,000 Speaker 1: we're going at rates, planning regulations are very severe. But 76 00:03:55,320 --> 00:03:57,480 Speaker 1: tell me, I imagine it's always tough. Right, If it 77 00:03:57,520 --> 00:03:58,920 Speaker 1: was easy, everyone would do it. 78 00:03:59,000 --> 00:04:01,200 Speaker 2: Everybody be doing it. That's exactly right. And if you 79 00:04:01,240 --> 00:04:05,120 Speaker 2: stick to the proven things of sticking to what you understand, 80 00:04:05,160 --> 00:04:07,760 Speaker 2: sticking to what you're best at, having the best possible 81 00:04:07,800 --> 00:04:11,280 Speaker 2: people around you. And I think for busy people we 82 00:04:11,400 --> 00:04:15,040 Speaker 2: talk about part time investors or even sophisticated investors, and 83 00:04:15,080 --> 00:04:17,440 Speaker 2: most of these people listening right now have. 84 00:04:17,400 --> 00:04:17,960 Speaker 3: A day job. 85 00:04:18,400 --> 00:04:22,840 Speaker 2: Yes, So whilst it's very tempting to look at more 86 00:04:22,839 --> 00:04:26,240 Speaker 2: complicated strategies in terms of the development of a property 87 00:04:26,240 --> 00:04:30,080 Speaker 2: et ce, a lot of times there's an opportunity cost 88 00:04:30,240 --> 00:04:33,000 Speaker 2: and I think it's super important for all of all 89 00:04:33,040 --> 00:04:37,120 Speaker 2: of us to really think about that opportunity, cost and risk, 90 00:04:37,839 --> 00:04:41,120 Speaker 2: and if you're normally bring your strategies back to simplicity, 91 00:04:41,480 --> 00:04:45,440 Speaker 2: staying with quality, taking a longer term view. Most people 92 00:04:45,640 --> 00:04:48,480 Speaker 2: that embark upon that making sure that their investments are 93 00:04:48,560 --> 00:04:52,000 Speaker 2: underpin by sustainable income flows. Obviously the better at the 94 00:04:52,000 --> 00:04:54,719 Speaker 2: position normally, the lower the return and finding a balance, 95 00:04:54,839 --> 00:04:58,039 Speaker 2: and oftentimes that's certainly dedicated by what type of cash 96 00:04:58,040 --> 00:05:01,360 Speaker 2: flows that the investor enjoys outsid part of their property investments. 97 00:05:02,000 --> 00:05:03,599 Speaker 2: But I think there's a lot to be said for 98 00:05:03,960 --> 00:05:04,719 Speaker 2: keeping it simple. 99 00:05:05,160 --> 00:05:07,960 Speaker 1: Yeah, right, Yes, like you're looking at as I was 100 00:05:07,960 --> 00:05:11,680 Speaker 1: saying when you mentioned the market now in a way 101 00:05:11,680 --> 00:05:14,360 Speaker 1: you might say it's deductive, really right, So the richer 102 00:05:14,400 --> 00:05:16,440 Speaker 1: getting richer. This is the point I was trying to 103 00:05:16,440 --> 00:05:18,520 Speaker 1: make at the start. So you would think you can 104 00:05:18,560 --> 00:05:21,000 Speaker 1: see how it happens in every industry. You look at 105 00:05:21,040 --> 00:05:23,159 Speaker 1: the hotel industry. I'm sure you know the hotel industry 106 00:05:23,240 --> 00:05:26,679 Speaker 1: very well. You're developing hotels, some hotels are actually getting 107 00:05:26,880 --> 00:05:28,800 Speaker 1: Some of these hotels in Europe that are famous old 108 00:05:28,800 --> 00:05:31,679 Speaker 1: hotels once upon a time they would have got bigger 109 00:05:32,200 --> 00:05:36,120 Speaker 1: now they're getting smaller. They're actually redeveloping and they're smaller 110 00:05:36,120 --> 00:05:40,600 Speaker 1: and they're consciously moving up market. You did that strategically 111 00:05:40,600 --> 00:05:44,279 Speaker 1: in your business. Is it a crowd becoming a crowded space? 112 00:05:44,320 --> 00:05:47,279 Speaker 1: But will it always be that sort of eleaset level? 113 00:05:48,320 --> 00:05:52,120 Speaker 2: Well, I mean, certainly, Europe's very interesting tourism. I don't 114 00:05:52,120 --> 00:05:55,160 Speaker 2: know where it sits in terms of the eurozones leading industries, 115 00:05:55,200 --> 00:05:58,919 Speaker 2: but there's no doubt that the more exclusive European hotels 116 00:05:58,960 --> 00:06:04,080 Speaker 2: have been able to increase their premium significantly, and that's 117 00:06:04,120 --> 00:06:07,640 Speaker 2: always going to suit a more boutique luxury experience. In 118 00:06:07,720 --> 00:06:10,160 Speaker 2: terms of our business moving up market, I think it's 119 00:06:10,200 --> 00:06:13,760 Speaker 2: a combination of what we enjoy, what we believe we're 120 00:06:13,760 --> 00:06:17,000 Speaker 2: good at, and also where the market opportunity is at. 121 00:06:17,120 --> 00:06:20,000 Speaker 3: I mean, it's an area that does have a. 122 00:06:19,920 --> 00:06:23,120 Speaker 2: Close relationship to the prestige housing market, which has been 123 00:06:23,160 --> 00:06:27,080 Speaker 2: a star performer. It's an area that is closely influenced 124 00:06:27,080 --> 00:06:30,080 Speaker 2: by the overall baby boomer and downsizeer evolution. 125 00:06:30,320 --> 00:06:32,240 Speaker 1: You think that's going to keep going, there's nothing to 126 00:06:32,320 --> 00:06:32,839 Speaker 1: stop that. 127 00:06:33,200 --> 00:06:37,400 Speaker 2: I can't see why. It also is an economic strategy 128 00:06:37,520 --> 00:06:41,560 Speaker 2: to dilute increasing construction costs, because even though you're increasing 129 00:06:41,600 --> 00:06:45,320 Speaker 2: construction costs by way of reducing a much more high 130 00:06:45,440 --> 00:06:49,440 Speaker 2: quality product, in all ways, as a proportion of the 131 00:06:49,480 --> 00:06:53,680 Speaker 2: overall investment, you're actually increasing land component and decreasing the 132 00:06:53,760 --> 00:06:58,120 Speaker 2: relative input of construction. So it is a strategy to 133 00:06:58,160 --> 00:07:00,920 Speaker 2: actually combat increasing construction costs. 134 00:07:01,080 --> 00:07:04,720 Speaker 1: Just to simplify this for our listeners, I'm imagining cutting 135 00:07:04,760 --> 00:07:09,280 Speaker 1: back to basics. If a brick costs ten dollars, it 136 00:07:09,320 --> 00:07:11,560 Speaker 1: costs ten dollars, whether you're around a two million dollar 137 00:07:11,720 --> 00:07:14,560 Speaker 1: side or a half a million dollar side. Yeah, that's 138 00:07:14,720 --> 00:07:15,600 Speaker 1: the economics of it. 139 00:07:15,680 --> 00:07:16,440 Speaker 3: That's exactly right. 140 00:07:16,520 --> 00:07:18,560 Speaker 2: So if you've got a ten dollar brick that goes 141 00:07:18,560 --> 00:07:21,960 Speaker 2: into a two million dollar apartment, we will probably spend 142 00:07:22,720 --> 00:07:26,280 Speaker 2: for example, eleven dollars fifty so it's better profile and 143 00:07:26,320 --> 00:07:28,560 Speaker 2: a more interesting finish. But it might go into a 144 00:07:28,720 --> 00:07:30,120 Speaker 2: ten or twenty million dollar apartment. 145 00:07:30,320 --> 00:07:33,560 Speaker 1: Yeah's it. Economics there for example, very interesting. Just tell 146 00:07:33,560 --> 00:07:35,640 Speaker 1: me one thing before we go to the break. I 147 00:07:35,760 --> 00:07:38,480 Speaker 1: like what you do those buildings, and you see, I've 148 00:07:38,560 --> 00:07:41,240 Speaker 1: late you seem to be specializing, if for want of 149 00:07:41,280 --> 00:07:45,160 Speaker 1: a better word, with our deco and restoration and heritage. 150 00:07:45,320 --> 00:07:48,600 Speaker 1: Most people find that most people would find that it's 151 00:07:48,600 --> 00:07:51,200 Speaker 1: such a headache to do and such a challenge to 152 00:07:51,200 --> 00:07:55,120 Speaker 1: do property development anyway. It must take all your diplomatic 153 00:07:55,160 --> 00:07:58,360 Speaker 1: skills to get the heritage side of things done. Yet 154 00:07:58,400 --> 00:08:01,840 Speaker 1: harder than it as hard as it sounds. 155 00:08:01,680 --> 00:08:04,120 Speaker 2: It is it is well first of all, because we 156 00:08:04,160 --> 00:08:08,480 Speaker 2: work in inner city blue ribbon areas. Naturally there are 157 00:08:08,520 --> 00:08:11,840 Speaker 2: going to be more more properties that are of heritage importance, 158 00:08:12,680 --> 00:08:17,520 Speaker 2: and we genuinely, we generally do want to work to 159 00:08:17,600 --> 00:08:20,960 Speaker 2: the line unlucky remarkable places. And there have been times 160 00:08:21,000 --> 00:08:27,080 Speaker 2: where we could have proposed to local council's demolition and 161 00:08:27,080 --> 00:08:30,880 Speaker 2: clean skin approach and we elected to restore, which we 162 00:08:30,920 --> 00:08:33,720 Speaker 2: did most recently in an ord witting development in kuji 163 00:08:34,240 --> 00:08:38,240 Speaker 2: and development called and another development we're doing in Kujie 164 00:08:38,240 --> 00:08:40,640 Speaker 2: at the moment called Baalomack House. It's the original Lord 165 00:08:40,679 --> 00:08:43,359 Speaker 2: Mayor's House from the eighteen sixties with a new build 166 00:08:43,679 --> 00:08:47,439 Speaker 2: in front, enjoying beautiful views back over the ocean and 167 00:08:47,480 --> 00:08:51,280 Speaker 2: converting that beautiful mansion into two heritage style apartments and 168 00:08:51,880 --> 00:08:54,120 Speaker 2: we seek a lot of enjoyment. The twenty five hour 169 00:08:54,160 --> 00:08:57,280 Speaker 2: Sydney which is due for opening a little later this year, 170 00:08:57,520 --> 00:08:59,080 Speaker 2: a property well known to many people. 171 00:08:59,200 --> 00:09:00,160 Speaker 1: Yeah, what was it? 172 00:09:00,200 --> 00:09:04,040 Speaker 2: Originally it was the Olympia Theater, but a lot of 173 00:09:04,080 --> 00:09:07,600 Speaker 2: people more of our general age group probably remember for 174 00:09:07,640 --> 00:09:08,959 Speaker 2: the blue specific room and. 175 00:09:09,800 --> 00:09:11,800 Speaker 1: A lively night spaff it was right. 176 00:09:12,400 --> 00:09:15,720 Speaker 2: So it's been an absolute joy, but at the same 177 00:09:15,760 --> 00:09:18,880 Speaker 2: time it does bring its challenges. We've been blessed to, 178 00:09:19,040 --> 00:09:21,520 Speaker 2: i guess more vertically integrate with some great people in 179 00:09:21,559 --> 00:09:25,040 Speaker 2: the planning and obviously development management and more recently construction area. 180 00:09:25,160 --> 00:09:29,600 Speaker 2: We now we're building Coujie Central. Animal Constructions was birthed 181 00:09:30,280 --> 00:09:33,760 Speaker 2: last year and we've had a really great experience again 182 00:09:33,920 --> 00:09:37,200 Speaker 2: because we've found some very high quality, like minded people 183 00:09:37,360 --> 00:09:41,439 Speaker 2: and so that's that's been a really great process to 184 00:09:41,800 --> 00:09:44,400 Speaker 2: actually enter the construction arena and take a little more 185 00:09:44,400 --> 00:09:45,160 Speaker 2: control in that area. 186 00:09:45,320 --> 00:09:47,480 Speaker 1: I want to ask you one of the things that 187 00:09:47,480 --> 00:09:50,160 Speaker 1: I've seen you see, which is this importance of saying no, 188 00:09:50,640 --> 00:09:52,640 Speaker 1: I reckon. It's important in any career at all, but 189 00:09:52,720 --> 00:09:55,800 Speaker 1: particularly when you're in an area like yours and you're 190 00:09:55,840 --> 00:09:58,000 Speaker 1: in property investment. We're going to come back after the 191 00:09:58,000 --> 00:10:07,800 Speaker 1: book and talk about that in a moment. Hello and 192 00:10:07,840 --> 00:10:11,120 Speaker 1: welcome back to the Australians Money Puzzle podcast. I'm James 193 00:10:11,200 --> 00:10:14,920 Speaker 1: Kirby talking to Shane Smollen. Now, Shane, as you've heard 194 00:10:15,000 --> 00:10:18,439 Speaker 1: the first part of the show is experienced a developer, 195 00:10:18,559 --> 00:10:22,400 Speaker 1: also under a real estate agency. At one stage we're 196 00:10:22,440 --> 00:10:25,480 Speaker 1: going to talk Shane. I've been listening to some of 197 00:10:25,520 --> 00:10:27,559 Speaker 1: the interviews you've done in the past, and I think 198 00:10:27,600 --> 00:10:30,400 Speaker 1: one of the really interesting things you're talking about in 199 00:10:30,559 --> 00:10:33,560 Speaker 1: being in property is there's some things that you say 200 00:10:33,800 --> 00:10:37,120 Speaker 1: you've already said them there, about having basically a squad 201 00:10:37,760 --> 00:10:40,640 Speaker 1: of your own that you build this people, your people 202 00:10:40,679 --> 00:10:44,000 Speaker 1: around you, knowing clearly who you are and where you 203 00:10:44,040 --> 00:10:46,280 Speaker 1: are and what you want to do. There was a 204 00:10:46,360 --> 00:10:49,120 Speaker 1: quote here which was a terrific podcast you did. By 205 00:10:49,160 --> 00:10:51,160 Speaker 1: the way, Shane is also a racing car driver, but 206 00:10:51,320 --> 00:10:54,880 Speaker 1: you wouldn't have guessed that from his modulated calm tone. 207 00:10:55,000 --> 00:10:57,320 Speaker 1: Or maybe that's what you need, is a racing car driver. 208 00:10:57,840 --> 00:11:00,800 Speaker 1: But he's also a rady car driver, which is not 209 00:11:00,840 --> 00:11:03,160 Speaker 1: as unusual as you might think in the property business. 210 00:11:03,120 --> 00:11:04,760 Speaker 1: And I can tell you I know a couple of them. 211 00:11:05,040 --> 00:11:08,280 Speaker 1: But you mentioned on this podcast with Anthony Denman, which 212 00:11:08,320 --> 00:11:10,959 Speaker 1: was mostly about car racing, that most of your best 213 00:11:10,960 --> 00:11:16,560 Speaker 1: wins come in your ability to say No, it's really 214 00:11:16,640 --> 00:11:19,080 Speaker 1: just going through all of the elements of due diligence, 215 00:11:19,160 --> 00:11:21,959 Speaker 1: being confident, but not to the point where your optimism 216 00:11:21,960 --> 00:11:24,400 Speaker 1: gets the better of you and your numbers are simply wrong, 217 00:11:24,720 --> 00:11:28,480 Speaker 1: in which case you can in which case you chase 218 00:11:28,480 --> 00:11:31,719 Speaker 1: your tail from day one. Now, that's the thing I 219 00:11:31,800 --> 00:11:34,720 Speaker 1: think with property development that this is always this terror. 220 00:11:34,760 --> 00:11:36,360 Speaker 1: I think that people have it if they get it wrong, 221 00:11:36,480 --> 00:11:38,840 Speaker 1: especially on their first one, and never recover. Is it 222 00:11:38,880 --> 00:11:39,640 Speaker 1: as severe as that? 223 00:11:41,320 --> 00:11:44,640 Speaker 2: It's no doubt if people who are ill prepared set 224 00:11:44,679 --> 00:11:47,240 Speaker 2: out on the wrong development, by the time it winds 225 00:11:47,240 --> 00:11:49,880 Speaker 2: itself out, you could be talking about certainly no less 226 00:11:49,880 --> 00:11:52,960 Speaker 2: than half a decade, and then the financial implications could 227 00:11:52,960 --> 00:11:54,600 Speaker 2: take up most of the rest of that decade. 228 00:11:54,640 --> 00:11:57,400 Speaker 3: So the answer yes, But in terms of no, yeah, 229 00:11:57,400 --> 00:11:57,959 Speaker 3: it's critical. 230 00:11:58,200 --> 00:12:00,160 Speaker 1: What were you said, like, what give us an EXAMPP 231 00:12:00,200 --> 00:12:02,320 Speaker 1: And I'm starting, Okay, I'm thinking I'm doing my first 232 00:12:02,360 --> 00:12:06,600 Speaker 1: ever property development. I'm subdividing this suburban block. I've got 233 00:12:06,600 --> 00:12:12,160 Speaker 1: these options. Everyone's suggesting things, Where is the idea where 234 00:12:12,200 --> 00:12:13,880 Speaker 1: you would say, now, where would it make a difference. 235 00:12:14,760 --> 00:12:17,800 Speaker 2: Look, I think it's about just having the right advice 236 00:12:17,880 --> 00:12:20,640 Speaker 2: up from the outset and also really under I think 237 00:12:20,640 --> 00:12:23,360 Speaker 2: when it comes to that level of development, just understanding 238 00:12:23,320 --> 00:12:25,480 Speaker 2: which your fallback position is. I mean a lot of 239 00:12:25,480 --> 00:12:29,680 Speaker 2: people in that space will be embarking upon subdivisions or. 240 00:12:29,679 --> 00:12:31,560 Speaker 3: Adding a duplex to a house side, et cetera. 241 00:12:32,040 --> 00:12:35,600 Speaker 2: But just understanding that if all files in something relating 242 00:12:35,600 --> 00:12:38,719 Speaker 2: to planning, which typically at that level, the risk is 243 00:12:38,800 --> 00:12:41,839 Speaker 2: largely mitigated. I mean, you're normally working. You might be 244 00:12:41,920 --> 00:12:44,439 Speaker 2: trying to build a little bit outside of the constraints potentially, 245 00:12:44,520 --> 00:12:47,080 Speaker 2: but it's unlikely that a developer at that level is 246 00:12:47,120 --> 00:12:51,199 Speaker 2: going to be embarking upon totally non compliance style developments. 247 00:12:51,800 --> 00:12:55,000 Speaker 2: So I would have thought in that case the risks 248 00:12:55,200 --> 00:12:58,760 Speaker 2: are quite mitigated and they generally represent great opportunities. Of course, 249 00:12:58,800 --> 00:13:02,719 Speaker 2: when you start getting into a larger, more complex developments, 250 00:13:02,840 --> 00:13:07,200 Speaker 2: it's a different story. And I guess my device is 251 00:13:07,240 --> 00:13:08,960 Speaker 2: to make sure that we have a large funnel so 252 00:13:08,960 --> 00:13:12,240 Speaker 2: we're building great relationships our acquisitions. Directed does a great 253 00:13:12,320 --> 00:13:14,920 Speaker 2: job in bringing quite a lot of opportunities for that 254 00:13:15,000 --> 00:13:19,319 Speaker 2: initial assessment. But again it's just it's very easy because 255 00:13:19,360 --> 00:13:22,320 Speaker 2: the natural instinct is to want to push ahead. I mean, 256 00:13:22,360 --> 00:13:24,240 Speaker 2: there are a few more it's very exciting when you 257 00:13:24,240 --> 00:13:27,560 Speaker 2: finish a development, but equally, it's extremely exciting when you 258 00:13:27,640 --> 00:13:29,959 Speaker 2: have the promise of a new development. And it's very 259 00:13:29,960 --> 00:13:36,520 Speaker 2: simple to be despite experience. It's fairly simple to potentially 260 00:13:36,600 --> 00:13:38,839 Speaker 2: think that every apartment is worth a little more, or 261 00:13:38,920 --> 00:13:40,920 Speaker 2: it costs a little bit less to develop, or the 262 00:13:40,960 --> 00:13:44,640 Speaker 2: program time can be delivered on a more idealistic time frame, 263 00:13:44,679 --> 00:13:46,960 Speaker 2: et cetera, et cetera. And of course, as it when 264 00:13:46,960 --> 00:13:49,040 Speaker 2: you start to compound all those elements through, I mean, 265 00:13:49,080 --> 00:13:52,920 Speaker 2: another trap can be the larger style development that enjoys 266 00:13:52,960 --> 00:13:55,640 Speaker 2: view corridors from a good chunk of the development stuff 267 00:13:55,640 --> 00:13:58,280 Speaker 2: that start to really price the average per square meter 268 00:13:58,400 --> 00:14:01,880 Speaker 2: rate as if it all enjoys the whereas sometimes could 269 00:14:01,920 --> 00:14:04,800 Speaker 2: be a lack of car parking. It could be just 270 00:14:04,840 --> 00:14:07,840 Speaker 2: that you're not able to deliver the development without a 271 00:14:07,920 --> 00:14:11,200 Speaker 2: high amount of southern south facing apartments or that are 272 00:14:11,240 --> 00:14:13,760 Speaker 2: departments that are view or solar impaired or privacy impaired, 273 00:14:13,800 --> 00:14:16,760 Speaker 2: et cetera, and they have significant per square meter rate impacts. 274 00:14:16,880 --> 00:14:18,720 Speaker 2: So it's just important to make sure you've done a 275 00:14:18,720 --> 00:14:22,720 Speaker 2: reality check on all of that. And yeah, it's of 276 00:14:22,760 --> 00:14:26,920 Speaker 2: course it's challenging to preserve margin. I think for a 277 00:14:26,960 --> 00:14:29,480 Speaker 2: lot of the people that I think that are possibly 278 00:14:29,560 --> 00:14:32,760 Speaker 2: short on time, there's just so much to be said 279 00:14:33,600 --> 00:14:38,280 Speaker 2: for in terms of longer term wealth creation. For just 280 00:14:38,400 --> 00:14:43,720 Speaker 2: focusing and on holding residential income producing property that sits 281 00:14:43,760 --> 00:14:47,800 Speaker 2: in an area that is under redevelopment into a higher 282 00:14:47,800 --> 00:14:52,560 Speaker 2: class and a higher density style of property, and there's 283 00:14:52,560 --> 00:14:55,320 Speaker 2: some of the best outcomes that I see. It's differently, 284 00:14:55,320 --> 00:14:58,040 Speaker 2: we're properly developers that we do we do that, We 285 00:14:58,080 --> 00:14:58,840 Speaker 2: do that for a job. 286 00:14:58,920 --> 00:15:01,600 Speaker 1: It sounds like inter city to property as it always 287 00:15:01,600 --> 00:15:01,920 Speaker 1: has been. 288 00:15:01,960 --> 00:15:03,520 Speaker 2: Well, if you look at if you look at what's 289 00:15:03,520 --> 00:15:05,560 Speaker 2: happening right at the moment in Sydney, if you've got 290 00:15:05,560 --> 00:15:08,640 Speaker 2: what is basically once in a generation type change with 291 00:15:08,680 --> 00:15:11,640 Speaker 2: the with the reforms in terms of mid to high rise, 292 00:15:11,760 --> 00:15:15,440 Speaker 2: and you've got tracts of prime housing and areas as 293 00:15:15,440 --> 00:15:18,560 Speaker 2: salubrious as Rose Bay or Mossman, et cetera that are 294 00:15:18,600 --> 00:15:22,560 Speaker 2: now being option and for that matter sold at twice 295 00:15:22,600 --> 00:15:26,320 Speaker 2: their residential value, give or take. Now that's a great opportunity. 296 00:15:26,360 --> 00:15:27,880 Speaker 2: Now it might have been hard to pick that, but 297 00:15:27,920 --> 00:15:30,520 Speaker 2: in another way, from another point of view, it actually wasn't. 298 00:15:30,600 --> 00:15:33,040 Speaker 2: Because there's been talk for a long time, but a 299 00:15:33,080 --> 00:15:35,080 Speaker 2: lot of people would either be living in as houses 300 00:15:35,160 --> 00:15:38,040 Speaker 2: or that bought those houses as interesting rental investments for 301 00:15:38,080 --> 00:15:40,320 Speaker 2: a long term. For a long term you. 302 00:15:40,280 --> 00:15:42,200 Speaker 1: Have an end in mind which is much further down 303 00:15:42,240 --> 00:15:44,520 Speaker 1: the track, which is a transformation of that neighborhood. 304 00:15:44,880 --> 00:15:48,160 Speaker 2: I think so, yeah, I think there are some obvious opportunities. 305 00:15:48,240 --> 00:15:50,240 Speaker 2: I look at areas of Brisbane. We're sitting here on 306 00:15:50,280 --> 00:15:51,840 Speaker 2: the Gold Coast. I mean, the Gold Coast is a 307 00:15:51,840 --> 00:15:55,360 Speaker 2: great example. I mean there are when you see something 308 00:15:55,440 --> 00:15:57,520 Speaker 2: like the light rail that is moving now at least 309 00:15:57,520 --> 00:15:58,320 Speaker 2: as far as Burly. 310 00:15:58,360 --> 00:16:00,760 Speaker 3: It was supposedly go a little further, but. 311 00:16:01,840 --> 00:16:03,160 Speaker 1: Going through a hell down there at the moment. 312 00:16:03,280 --> 00:16:05,880 Speaker 2: Yes he's going through hell end, going through hell and 313 00:16:05,880 --> 00:16:09,080 Speaker 2: not Palm Beach at the moment. But it goes without 314 00:16:09,120 --> 00:16:11,480 Speaker 2: saying that governments don't invest in these sort of whether 315 00:16:11,520 --> 00:16:13,600 Speaker 2: it be council, state, federal, They don't invest in this 316 00:16:13,640 --> 00:16:17,720 Speaker 2: type of infrastructure without backing it with significant increases in 317 00:16:17,760 --> 00:16:21,640 Speaker 2: nearby density. So there are opportunities at the moment in 318 00:16:21,760 --> 00:16:26,040 Speaker 2: older strata total buildings. Now Queensland doesn't enjoy the same 319 00:16:26,400 --> 00:16:29,000 Speaker 2: or doesn't have the same strata renewal laws in other words, 320 00:16:29,000 --> 00:16:31,120 Speaker 2: it does have a strata renewal law, but it's a 321 00:16:31,120 --> 00:16:36,160 Speaker 2: little more complicated than say New South Wales. But logically, 322 00:16:36,240 --> 00:16:39,160 Speaker 2: if you take a long term view, a decade long outlook, 323 00:16:39,720 --> 00:16:43,960 Speaker 2: there are quite affordable strata opportunities in older buildings which 324 00:16:44,080 --> 00:16:47,760 Speaker 2: inevitably will be amalgamated at some point in the years 325 00:16:47,760 --> 00:16:51,240 Speaker 2: to come. That may not be today, and nor should 326 00:16:51,240 --> 00:16:53,560 Speaker 2: they be assumed to be today, but these type of 327 00:16:53,600 --> 00:16:56,600 Speaker 2: examples are everywhere. And I think it's a way. If 328 00:16:56,600 --> 00:16:58,240 Speaker 2: you take the view that if you just sit on 329 00:16:58,280 --> 00:17:01,560 Speaker 2: a vanilla property in Astra and it'll compound at seven 330 00:17:01,560 --> 00:17:04,800 Speaker 2: percent per year, which seems to be about the historical rate, 331 00:17:05,240 --> 00:17:06,560 Speaker 2: I think it's I think it's a good way to 332 00:17:07,040 --> 00:17:07,480 Speaker 2: double that. 333 00:17:08,040 --> 00:17:08,960 Speaker 3: Yeah, it goes. 334 00:17:08,800 --> 00:17:11,359 Speaker 2: Without saying that a smart development is going to see 335 00:17:11,480 --> 00:17:15,600 Speaker 2: a much higher bounce, but just like with anything without 336 00:17:15,600 --> 00:17:17,400 Speaker 2: the higher return, it comes with a higher. 337 00:17:17,400 --> 00:17:19,760 Speaker 1: You seem to have that faith though, that it will 338 00:17:19,840 --> 00:17:22,200 Speaker 1: keep going as it has for a long time, because 339 00:17:22,240 --> 00:17:25,040 Speaker 1: more recently that that idea you could say to anybody 340 00:17:25,040 --> 00:17:27,240 Speaker 1: on the street, look, you'll double your money every ten years, 341 00:17:27,359 --> 00:17:29,840 Speaker 1: or you'll do your seven percent. There was there was 342 00:17:29,880 --> 00:17:32,480 Speaker 1: also some questions over that of recent times. 343 00:17:32,720 --> 00:17:37,320 Speaker 2: Yeah, look, the under supply issue is not going away quickly. 344 00:17:37,320 --> 00:17:40,080 Speaker 2: There are just way too many constraints for that to 345 00:17:40,280 --> 00:17:44,199 Speaker 2: change anytime soon. There is net migration, it'll the dial 346 00:17:44,240 --> 00:17:46,680 Speaker 2: will be turned from time to time, But overall, Astraight 347 00:17:46,760 --> 00:17:51,719 Speaker 2: has a need for a net migration increase. And there 348 00:17:51,760 --> 00:17:53,840 Speaker 2: are just certain areas as well that are more and 349 00:17:53,880 --> 00:17:58,080 Speaker 2: more attractive, some because of affordability, some because of commercial opportunity, 350 00:17:58,240 --> 00:18:01,760 Speaker 2: some because of the significant and moved to lifestyle. And 351 00:18:02,240 --> 00:18:04,680 Speaker 2: COVID did accelerate in terms of the move north into 352 00:18:05,160 --> 00:18:06,600 Speaker 2: sunnier coastal climates, etc. 353 00:18:07,080 --> 00:18:07,520 Speaker 3: Et cetera. 354 00:18:08,240 --> 00:18:11,040 Speaker 2: COVID accelerated that, and in some cases those trends were 355 00:18:11,040 --> 00:18:13,359 Speaker 2: reversed back to the cities as people sort to find 356 00:18:13,520 --> 00:18:15,320 Speaker 2: work and had to move back to the offices. But 357 00:18:15,440 --> 00:18:17,800 Speaker 2: you know, some of these generational changes are very real 358 00:18:17,840 --> 00:18:19,639 Speaker 2: and I think we'll go on for some time. It 359 00:18:19,760 --> 00:18:22,880 Speaker 2: makes sense to sell the forty or fifty year old 360 00:18:22,880 --> 00:18:25,919 Speaker 2: familyhouse and move to a beautiful boutique apartment with views 361 00:18:25,960 --> 00:18:29,080 Speaker 2: and close to amenity and locked the door and head 362 00:18:29,119 --> 00:18:31,840 Speaker 2: to Sydney Airport. It makes sense to enjoy the last 363 00:18:31,840 --> 00:18:33,639 Speaker 2: thirty or forty years Sydney. 364 00:18:34,240 --> 00:18:37,679 Speaker 1: There's a lot of negative negativity around Melbourne at the moment, 365 00:18:38,240 --> 00:18:42,880 Speaker 1: prices very soft. It's a market that people didn't move 366 00:18:42,960 --> 00:18:46,600 Speaker 1: to in COVID. They moved out of in COVID. What's 367 00:18:46,640 --> 00:18:47,040 Speaker 1: your view. 368 00:18:48,320 --> 00:18:49,960 Speaker 3: I'm positive about Melbourne. 369 00:18:50,080 --> 00:18:54,879 Speaker 2: It's such a big, dynamic city. It's attractive to a 370 00:18:54,880 --> 00:18:58,760 Speaker 2: broad range of demographics and nationalities, and it seems to 371 00:18:58,840 --> 00:19:02,240 Speaker 2: be a real focal point for migrant populations and it 372 00:19:02,400 --> 00:19:02,800 Speaker 2: enjoys it. 373 00:19:02,960 --> 00:19:05,040 Speaker 1: Do you think now? Just now? 374 00:19:05,680 --> 00:19:10,280 Speaker 2: I think my view on the high density market, and 375 00:19:10,560 --> 00:19:13,720 Speaker 2: just a personal view, I think it was somewhat manufactured. 376 00:19:14,600 --> 00:19:16,680 Speaker 2: I know, the type of incentives that have been used 377 00:19:16,680 --> 00:19:17,840 Speaker 2: for many years compared to the. 378 00:19:17,840 --> 00:19:19,840 Speaker 1: City that the people didn't Is that what you mean? 379 00:19:20,320 --> 00:19:27,080 Speaker 2: No, it's I don't think the high density developments as 380 00:19:27,119 --> 00:19:31,040 Speaker 2: a rule, and I'm generalizing. I don't believe that they 381 00:19:31,080 --> 00:19:35,240 Speaker 2: were necessarily based on a waiting demand. I think the 382 00:19:35,280 --> 00:19:39,320 Speaker 2: demand to some extent had to be created, and I 383 00:19:39,320 --> 00:19:41,919 Speaker 2: wouldn't put Sydney in the same category as that in 384 00:19:41,920 --> 00:19:43,840 Speaker 2: nor do I put the current For example, the current 385 00:19:43,840 --> 00:19:46,280 Speaker 2: Gold Coast market where we sit, which in days gone 386 00:19:46,320 --> 00:19:48,520 Speaker 2: by was a different story. I think there's a genuine 387 00:19:48,560 --> 00:19:50,840 Speaker 2: market there for the right product. But in terms of 388 00:19:50,880 --> 00:19:54,560 Speaker 2: Melbourne in generally we're seeing increases in the in demand 389 00:19:54,640 --> 00:19:57,560 Speaker 2: in the quality of Melbourne housing market, and there is 390 00:19:57,640 --> 00:20:00,880 Speaker 2: certainly a market there in the boutique again and downsize 391 00:20:00,880 --> 00:20:04,760 Speaker 2: a high quality premium areas close to amenity that people 392 00:20:04,760 --> 00:20:07,720 Speaker 2: have enjoyed for some decades with their families. But I 393 00:20:07,720 --> 00:20:12,000 Speaker 2: think high density is still quite challenged and it's difficult 394 00:20:12,080 --> 00:20:15,679 Speaker 2: to build things in Melbourne, and you don't sell a 395 00:20:15,760 --> 00:20:17,639 Speaker 2: thing in Melbourne for the same price as you do 396 00:20:17,680 --> 00:20:19,920 Speaker 2: in Sydney. So you've just got that element again where 397 00:20:20,040 --> 00:20:22,960 Speaker 2: it's costing as much or more to build in the town, 398 00:20:23,160 --> 00:20:25,120 Speaker 2: but you just simply can't sell it for as much 399 00:20:25,160 --> 00:20:28,040 Speaker 2: as you can in Sydney. Naturally, the land per unit 400 00:20:28,160 --> 00:20:30,680 Speaker 2: is more affordable, but it's still just a really challenging 401 00:20:31,080 --> 00:20:35,000 Speaker 2: place to build high density. And of course there's been 402 00:20:35,880 --> 00:20:38,480 Speaker 2: massive one area where under supply hasn't been so much 403 00:20:38,520 --> 00:20:41,880 Speaker 2: an issue. It's just the broad acre land releases. 404 00:20:41,800 --> 00:20:44,760 Speaker 1: So that so that kind of can dilute demand to 405 00:20:44,800 --> 00:20:45,320 Speaker 1: some extent. 406 00:20:45,640 --> 00:20:47,760 Speaker 2: There's been a lot, yes, there's been a lot, and 407 00:20:47,840 --> 00:20:48,840 Speaker 2: there's still a lot to come. 408 00:20:48,880 --> 00:20:50,520 Speaker 3: And of course Sydney is landlocked. 409 00:20:50,840 --> 00:20:53,240 Speaker 2: Yes, that's right, so city has to build up. 410 00:20:53,400 --> 00:20:56,720 Speaker 1: Yeah, all those lovely national parks, they have a bow 411 00:20:56,760 --> 00:21:00,200 Speaker 1: product of creating intense demand within those sort of that's 412 00:21:00,520 --> 00:21:02,200 Speaker 1: very good. All right, Look we'll take one short break 413 00:21:02,200 --> 00:21:03,800 Speaker 1: and we'll be back in a moment. As a crucial 414 00:21:03,880 --> 00:21:12,879 Speaker 1: question I want to ask Shane. Hello, welcome back to 415 00:21:12,880 --> 00:21:15,920 Speaker 1: the Australians Money Puzzle podcast, coming to you today from 416 00:21:16,040 --> 00:21:18,879 Speaker 1: the AREK Conference are the Gold Cost where there are 417 00:21:18,960 --> 00:21:22,680 Speaker 1: simply thousands of real estate agents and real estate people 418 00:21:22,720 --> 00:21:25,679 Speaker 1: here this morning and we are talking to Shane Small 419 00:21:25,760 --> 00:21:29,080 Speaker 1: and here in the main auditorium. Shane, there is some 420 00:21:29,240 --> 00:21:31,399 Speaker 1: questions I cover every week on property, which i'll do 421 00:21:31,520 --> 00:21:33,040 Speaker 1: with in a moment. Hope you can chip in if 422 00:21:33,080 --> 00:21:35,280 Speaker 1: you wish. You can have completely dodged them if you want. 423 00:21:35,640 --> 00:21:37,399 Speaker 1: But what they I want to ask you was on 424 00:21:37,440 --> 00:21:39,359 Speaker 1: the show. A lot of people talk all the time 425 00:21:39,400 --> 00:21:42,440 Speaker 1: about macro right, they talk about interest rates, they talk 426 00:21:42,520 --> 00:21:46,439 Speaker 1: about the conditions of the market, whether they talk about 427 00:21:47,000 --> 00:21:49,760 Speaker 1: governments and whether they're helping or not helping. But I 428 00:21:49,800 --> 00:21:51,880 Speaker 1: wonder with someone like you, when you've had a career 429 00:21:51,920 --> 00:21:55,480 Speaker 1: where you've built a real estate chain, agency chain and 430 00:21:55,520 --> 00:21:59,400 Speaker 1: soldiers where you do these not just risk developments where 431 00:21:59,440 --> 00:22:03,440 Speaker 1: you have to calculate at risk, but obviously stressful difficult 432 00:22:03,480 --> 00:22:07,520 Speaker 1: developments where there's heritage dimensions. To what extent do you 433 00:22:07,520 --> 00:22:09,679 Speaker 1: look at the macro picture? Does it matter to you? 434 00:22:09,720 --> 00:22:12,320 Speaker 1: Do you start looking at your development and then get 435 00:22:12,320 --> 00:22:14,919 Speaker 1: a surprise that inflation kicked in and all the building 436 00:22:14,920 --> 00:22:16,960 Speaker 1: materials went up a thirty percent? Or do you keep 437 00:22:16,960 --> 00:22:19,359 Speaker 1: an eye closely on macro? How important is it to 438 00:22:19,400 --> 00:22:20,639 Speaker 1: you the big picture? 439 00:22:21,880 --> 00:22:25,159 Speaker 2: I think there have definitely been surprises in terms of 440 00:22:25,280 --> 00:22:29,360 Speaker 2: just to what extent there is inflation in the construction market. Yeah, 441 00:22:29,560 --> 00:22:32,679 Speaker 2: we've obviously seen some stabilization of not decreases in the 442 00:22:32,720 --> 00:22:35,639 Speaker 2: interest rate environment. So it's hard to it's hard to 443 00:22:35,680 --> 00:22:38,080 Speaker 2: pick those changes in the funding environment. I mean, there's 444 00:22:38,080 --> 00:22:41,639 Speaker 2: obviously been a quite a large and burgeoning non bank 445 00:22:41,760 --> 00:22:45,160 Speaker 2: sector that is still very active, and that's provided developers 446 00:22:45,200 --> 00:22:47,840 Speaker 2: with i think greater choice and only wants. 447 00:22:47,720 --> 00:22:53,360 Speaker 1: For instance, lending to property superannuation smsfs in property, Yeah. 448 00:22:53,160 --> 00:22:55,120 Speaker 3: For sure, doing it for sure. Yeah. 449 00:22:55,160 --> 00:22:57,120 Speaker 2: And then and look a lot of those non bank 450 00:22:57,680 --> 00:23:00,880 Speaker 2: they're great to work with, and whether they're purely dead 451 00:23:00,960 --> 00:23:03,959 Speaker 2: or taking on a dead equity appetite. But there's some 452 00:23:04,160 --> 00:23:07,080 Speaker 2: very progressive players out there. But look, we made a 453 00:23:07,080 --> 00:23:11,320 Speaker 2: decision some time ago which I think has been vindicated 454 00:23:11,720 --> 00:23:14,720 Speaker 2: to It was a flight to quality, and it was 455 00:23:14,760 --> 00:23:17,879 Speaker 2: a flight to very high quality under occupy a stock. 456 00:23:18,640 --> 00:23:20,040 Speaker 3: We haven't fallen. 457 00:23:19,840 --> 00:23:23,600 Speaker 2: Into the trap of regardless of increasing costs in value 458 00:23:23,600 --> 00:23:28,600 Speaker 2: engineering stock. It's a multi generation business. We're very conscious 459 00:23:28,640 --> 00:23:32,400 Speaker 2: of reputation and brand and so and that sometimes means 460 00:23:32,400 --> 00:23:36,719 Speaker 2: that you might be slightly compromised in the moment for 461 00:23:36,760 --> 00:23:39,320 Speaker 2: the sake of a bigger picture. But our reputation is 462 00:23:39,359 --> 00:23:40,080 Speaker 2: everything to us. 463 00:23:40,240 --> 00:23:41,760 Speaker 3: So yeah, but. 464 00:23:41,760 --> 00:23:44,880 Speaker 2: It goes without saying it's impossible to forecast over three, 465 00:23:44,960 --> 00:23:48,880 Speaker 2: four or five years and get it right. But we're 466 00:23:48,880 --> 00:23:50,640 Speaker 2: probably doing a better job than most governance. 467 00:23:50,640 --> 00:23:53,399 Speaker 1: So you stick as you said at the start, you 468 00:23:53,440 --> 00:23:56,399 Speaker 1: stick closely to and you have a clip, you have 469 00:23:56,440 --> 00:23:57,919 Speaker 1: a cleip of who you are and what you do. 470 00:23:58,080 --> 00:23:58,680 Speaker 3: Yeah, that's right. 471 00:23:58,720 --> 00:24:01,280 Speaker 2: I mean, look, it's very tempting based in this area now, 472 00:24:01,359 --> 00:24:04,840 Speaker 2: so I sort of fly to work, but you see 473 00:24:05,040 --> 00:24:08,159 Speaker 2: opportunities and it's very tempting. But we're trying to stay 474 00:24:08,160 --> 00:24:10,520 Speaker 2: disciplined and to stay at what we're best at. We 475 00:24:10,600 --> 00:24:14,960 Speaker 2: think We're very strong in our perl development in Bondai, 476 00:24:15,480 --> 00:24:19,480 Speaker 2: that is with our good partners, the Family Office of Quaramantha. 477 00:24:20,200 --> 00:24:23,000 Speaker 2: We're about to release that and whilst I can't give 478 00:24:23,000 --> 00:24:25,359 Speaker 2: away the exact prices, but I can say that they're 479 00:24:25,440 --> 00:24:27,640 Speaker 2: well north of one hundred thousand dollars per square meter 480 00:24:28,400 --> 00:24:32,120 Speaker 2: and we're confident and we're excited and it's just really stimulating, 481 00:24:32,720 --> 00:24:33,840 Speaker 2: satisfying work. 482 00:24:33,960 --> 00:24:35,920 Speaker 3: To be able to work at that level of quality. 483 00:24:35,600 --> 00:24:38,359 Speaker 1: Bok to that level and execute at that level very interesting. 484 00:24:38,600 --> 00:24:42,159 Speaker 1: I have a couple of listener questions, as always, just 485 00:24:42,200 --> 00:24:45,280 Speaker 1: two quick ones, the ones from Anton A and Ton 486 00:24:45,359 --> 00:24:49,000 Speaker 1: High Anton. Anyone talking about a legal challenge or a 487 00:24:49,000 --> 00:24:51,840 Speaker 1: class action over a division two ninety six. That's the 488 00:24:51,920 --> 00:24:54,480 Speaker 1: new super tax which I'm sure everyone knows, which is 489 00:24:54,520 --> 00:24:57,520 Speaker 1: going to be applied on on realized gains, creating something 490 00:24:57,560 --> 00:25:00,480 Speaker 1: of a sensation in terms of ulter to cross the 491 00:25:00,520 --> 00:25:04,800 Speaker 1: investment community. Anton, I am not aware of a class action. 492 00:25:05,359 --> 00:25:08,400 Speaker 1: I have asked regularly if someone is going to mount 493 00:25:08,400 --> 00:25:12,360 Speaker 1: a constitutional challenge on it. I wonder if they could 494 00:25:12,640 --> 00:25:13,880 Speaker 1: land tax in its way? 495 00:25:13,960 --> 00:25:14,479 Speaker 3: Is it? 496 00:25:14,520 --> 00:25:16,960 Speaker 1: Would you agree is a tax on realize gains? Shane? 497 00:25:17,000 --> 00:25:19,320 Speaker 1: Would you see it as that. I mean, you own something, 498 00:25:19,359 --> 00:25:22,399 Speaker 1: it goes up. It's a paper game, so I suppose 499 00:25:22,480 --> 00:25:27,040 Speaker 1: in that respect, In that respect there is a legal precedent. Sorry, 500 00:25:27,520 --> 00:25:30,720 Speaker 1: but that doesn't mean someone couldn't contest it, So we'll see. Anton. 501 00:25:30,760 --> 00:25:33,040 Speaker 1: Thank you very much. Always welcome to have questions, and 502 00:25:33,320 --> 00:25:36,840 Speaker 1: remember this is never advice information only. Nathan, thanks for 503 00:25:36,880 --> 00:25:40,119 Speaker 1: your excellent podcast. I listened regularly ever since moving from 504 00:25:40,119 --> 00:25:44,359 Speaker 1: Australia to the Netherlands. Okay, my question is if I 505 00:25:44,359 --> 00:25:46,399 Speaker 1: own a property in a self managed super fund, can 506 00:25:46,440 --> 00:25:48,720 Speaker 1: I move into that house in a tax effective way 507 00:25:49,000 --> 00:25:51,199 Speaker 1: once I enter the pension phase. Nathan, you can do 508 00:25:51,280 --> 00:25:53,240 Speaker 1: just about anything, but you cannot move into that house. 509 00:25:53,680 --> 00:25:56,600 Speaker 1: There is an incredibly elaborating where you could perhaps sell 510 00:25:56,640 --> 00:25:59,639 Speaker 1: it to your fund, could sell it and move it 511 00:25:59,720 --> 00:26:02,359 Speaker 1: out and to you at the market price, which would 512 00:26:02,400 --> 00:26:07,480 Speaker 1: be incredibly awkward and elaborate and almost a kind of 513 00:26:07,480 --> 00:26:10,119 Speaker 1: counterintuitive for the reason you did it in the first place, 514 00:26:10,880 --> 00:26:12,480 Speaker 1: or one might have done it in the first place. 515 00:26:12,520 --> 00:26:16,520 Speaker 1: So short answer, it's not impossible, but not worth doing, 516 00:26:16,680 --> 00:26:18,879 Speaker 1: is what I would think most financial advisors would say 517 00:26:18,920 --> 00:26:20,680 Speaker 1: to you. Thank you Nathan for that question, and thank 518 00:26:20,720 --> 00:26:22,640 Speaker 1: you very much Shane Smollen for coming in today. Really 519 00:26:22,720 --> 00:26:23,159 Speaker 1: nice to talk to. 520 00:26:23,160 --> 00:26:24,720 Speaker 3: You, James, thanks for your time. 521 00:26:24,520 --> 00:26:27,280 Speaker 1: To thank you everyone. Let's have some more questions the 522 00:26:27,320 --> 00:26:31,240 Speaker 1: money Puzzle at the Australian dot com dot au. Talk 523 00:26:31,280 --> 00:26:31,720 Speaker 1: to you soon.