When one of Reg Rowe’s property business partners died in 2007, the BRW Rich Lister, who founded Super Cheap Auto, set about looking for a steady hand to run his multimillion-dollar real estate empire.
His accountant – Grant Thornton’s Mark O’Hare – knew just the person. He had another client, Peter Sherrie, who was heading up Stockland’s Queensland apartment business at the time, and he asked him if he would like to take charge of a wealthy, but very private local businessman’s property concerns.
Mr Sherrie was interested and after getting the nod from Mr Rowe, Mr O’Hare sent a text message through with Mr Rowe’s details. It was the beginning of the Excel Development Group, which now has a portfolio of more than $200 million across commercial, residential and, more famously, retail, which includes 33 large-format stores up and down the east coast, majority leased to Super Cheap.
“I said to Reg ‘I don’t just want to work for you, I want to come into the business’,” Mr Sherrie said. “I had been wanting to do some development for myself and this was an opportunity to have some skin in the game.”
FINANCIAL CRISIS HIT
Reg Rowe.Photo: Glenn Hunt.
Mr Rowe accepted but right as the financial crisis hit. Values were plummeting. Feasibility studies were being binned.
“The biggest thing that impacts property is jobs,” Mr Sherrie said. “But when the financial crisis hit, the mines kept going and so we had a very good run up in central Queensland.”
Excel set up residential and commercial property developments from Emerald to Biloela and into Gladstone. It even joined the rush in speculatively building a commercial office tower – 51 Alfred Street in Fortitude Valley, Brisbane – with the expectation of more demand from white-collar, resource-related workers. Even Mr Rowe, who despises his estimated $871 million wealth being recorded in BRW, agreed to a rare photo shoot in front of the building’s construction.
But then commodity prices started to dive and vacancy rates shot through the roof. The building at 51 Alfred has only been saved by a focused leasing campaign and the emergence of a technology sector – although there is still some untouched space on offer.
“Yes we have been battered by the recent downturn in resources,” Mr Sherrie admitted. “The resources sector had controlled a lot of white-collar employment but now that has gone, too.”
As a former national president of the UDIA and a leader at Stockland, Lend Lease and Peter Kurts Properties, Mr Sherrie’s experience helped him pinpoint growth areas and new, quality developments. In a joint venture with private group RGD, Excel developed and kept ownership of Youi Insurance’s headquarters at Kawana Waters on the Sunshine Coast. The 7000-square-metre property known as The Edge is an award-winning building.
Furthermore, Excel has developed dozens of new apartments on the Sunshine Coast including Broadwater at Kawana Waters, which has sold out, and Saltwater also at Kawana, which is more than 80 per cent sold.
The company is also now about to roll out more than $70 million in apartments in Brisbane and Mr Sherrie is not concerned about oversupply.
“We have a very strong apartment market, driven by investors. We are yet to see any crazy price growth in the end price of an apartment.”
Last month, the company also bought Abacus Property Group’s Aspley Village Shopping Centre in Brisbane for $32.25 million. That will be a value-add play for Excel, which will test the company’s retail skills. But there are plenty of those.
“Reg has been very helpful on a lot of things, especially in retail. He understands how consumers walk into a shop and how they spend their money. He has also been invaluable in negotiating leases.”
Source: Business Review Weekly