Australia’s five most powerful people in property for 2023
The fortunes of the property sector – all the way from the housing market to CBD office towers – have been riding the rollercoaster of the interest rate cycle over the past year. Nowhere was the volatility more apparent than the housing market, where prices plunged throughout last year. By early this year though, a modest recovery emerged as buyers, sellers and lenders took heart that the end of the cycle was in sight.
That hasn’t helped in the rental market, where a lack of supply has pushed rents sky high. Making matters worse, builders buckled under fixed-price contracts as costs soared. Solving the housing crisis by delivering more supply tops the national agenda, for government, business and the not-for-profit sectors.
Commercial property has not been immune from punishing rate rises. The listed property companies – the real estate investment trust (REIT) sector – were hit early as investors sold out. It was only a matter of time before weakness in the public market made its way into portfolio valuations. Big deals slowed dramatically as landlords refused to sell at discount rates. The crunch in values is being felt the most in the office sector as it grapples with rising vacancies and the work-from-home trend.
But the numerous challenges for property players also create opportunities. Those who innovate, can assemble inflation-proof portfolios, and identify which demographic and technological trends will spur demand for real estate, have delivered growth and superior returns in uncertain times.
1. Tarun Gupta
Since taking the helm of the country’s largest diversified developer, Stockland, two years ago, Gupta has moved quickly to drive the company deeper into residential property, which makes him a key player in the national housing crisis.
The step-change at Stockland also involves bringing on board third-party capital to power the $10 billion company’s development pipeline. As a former chief financial officer at Lendlease, Gupta has plenty of expertise, and he is willing to innovate.
Stockland is now eyeing a portfolio of 12,000 “land lease” home sites by the end of next year, backed by Japanese powerhouse Mitsubishi Estate. A still emerging sector, land lease provides affordable accommodation to typically downsizing Baby Boomers. The residents own their own home on a rented site.
Led by Gupta, Stockland’s expanding involvement is a sizable contribution to sorely needed housing supply.
2. Deanne Stewart
As chief executive of Aware Super, Stewart is in charge of one of the country’s biggest superannuation funds and, in the past year at least, arguably its most successful. The fund, which has $160 billion under management, returned 10.7 per cent in its default investment option, outstripping the rest of the sector. Although much of that was driven by Aware’s relatively higher global equities position, its property strategy played a crucial part.
About eight years ago, Aware’s property team, now led by Alek Misev, began winding back its legacy positions in office and retail, and switched the focus to industrial and what it calls “living”, which takes in all forms of accommodation. It was a bold call but the super fund’s broad strategy, overseen by Stewart, has paid off handsomely.
It also has made Aware a pioneer among its peers in build-to-rent housing, including at the affordable end. BTR, as it’s known, is another emerging housing type involving large apartment projects, developed not to sell but for rental. It’s proving to be a key part of Aware’s winning property strategy and an example of the part that big super can play in housing Australians.
3. Greg Goodman
Any chief executive who can deliver 17 per cent growth in earnings amid the fastest interest rate increase cycle on record deserves acclaim, and close attention. Though wary of the spotlight, Goodman strides on the world stage, overseeing $81 billion of logistics assets in markets from the US to Europe and Asia.
Goodman’s decision to run his locally listed, globally invested property portfolio at very low gearing gives the Goodman Group a powerful advantage in a sector weighed down by rising borrowing costs. So too does Goodman’s focus on industrial property, an area of commercial property that remains in short supply as demand has risen. Warehouses are prospering.
And under Goodman’s stewardship, the humble warehouse has become a thing of technological sophistication and high-level sustainability. Goodman is expanding into data centres and is pioneering multi-level warehousing in Australia, allowing for more efficient use of space close to city centres. It built Amazon’s robotic fulfilment centre in Sydney and will develop a vast 70-hectare air cargo logistics hub at Tokyo’s Narita International Airport.
4. Darren Steinberg
Once billed as Australia’s largest office landlord, these days Dexus prefers to be known as a real asset manager. Devised by Steinberg, the strategy has shifted Dexus’ focus from holding property on its balance sheet towards managing other owners’ investments as well. At the same time, Dexus is diversifying into new areas including healthcare and infrastructure.
The strategic readjustment came not a moment too soon, as nervy investors abandoned major listed property owners when the interest cycle kicked in around the world. Although Steinberg’s vision may have secured the company’s future long-term, he was left with a more immediate problem – the challenges facing CBD office towers.
That meant Steinberg’s decision to sell some of those once-prized assets at discounts – a bitter pill to swallow in the short-term – sent a powerful message through the commercial property sector and set important valuation benchmarks.
5. Michele Adair
With more than 30 years’ experience, Adair has steadily built a reputation as a passionate but pragmatic advocate for social and affordable housing. Adair is the chief executive of the Wollongong-based Housing Trust, one of the largest community housing providers in the country. She has also served as chair of the Community Housing Industry Association NSW.
Adair remains a powerful voice for the provision of affordable housing in the Illawarra. But her more recent appointment as chair of the newly created Homes Tasmania puts her in charge of a statewide strategy, already touted as an exemplar for the mainland.
Ambitious, well funded and administered through Homes Tasmania, the plan covers the spectrum of housing needs in the state from rough sleeping through renting to full ownership. It has a target to provide 10,000 new social and affordable homes by 2032. It could be a game changer.
