GPT Group taps Russell Reynolds for CEO search

GPT Group chief executive Bob Johnston in his Sydney offices. Picture: John Feder

The country’s oldest real estate investment trust, The GPT Group, is understood to be working with executive search firm Russell Reynolds Associates to find a replacement for its current managing director Bob Johnston.

Sources have said that the executive search firm had been in the market making approaches to top real estate names interested in taking on a chief executive role of the $8bn landlord of offices, warehouses and shopping centres worth more than $26bn, and DataRoom has learned that the firm is working on GPT’s behalf.

DataRoom earlier flagged that GPT was said to be on the hunt for a new boss, and the revelation comes as Mirvac Group announced the departure of current boss Susan Lloyd-Hurwitz.

While Mirvac has declined to name the search firm it is using, historically, it has called on the services of Russell Reynolds’ rival, Spencer Stuart.

The Australian real estate industry has been rife with speculation that GPT is in search of a replacement for current chief executive Bob Johnston in the past fortnight, but one source said that while the company was keen for a changing of the guard, this could be set to happen six to 12 months’ time.

Mr Johnston joined GPT in 2015.

Yet some believe that other well known identities in the space could be also contemplating their future after many big names in listed real estate have been at the helm of their companies for in some instances more than a decade.

While there has been no definitive talk of others leaving, sources say the language has changed with some top bosses where they are offering signals that could suggest they are contemplating a future that differs to their current roles.

The real estate industry faces a number of headwinds, such as a trend towards working from home since the global pandemic that impacts office landlords.

Rising interest rates removes the rationale of mergers and acquisitions in the space for many property acquirers in the market such as superannuation funds with the cost of debt too high.

Like GPT’s share price, the entire Australian listed real estate investment trust (AREIT) sector has been in decline this year on the Australian Securities Exchange, which is somewhat in line with the broader market.

Some groups like GPT have to renegotiate borrowings, which they currently have at a far cheaper rate than peers.

Among some of the chief executives that have been running large listed AREITS for a prolonged period are David Harrison.

Mr Harrison has been running Charter Hall since 2004.

Darren Steinberg has been at the helm of Dexus Property Group since 2012 and Greg Goodman still runs Goodman Group, the Australian listed industrial giant he founded in 1989.

Mirvac announced the departure of chairman John Mulcahy and Ms Lloyd-Hurwitz about two weeks ago, but apparently, a search firm was making approaches around the market on its behalf weeks before.

Ms Lloyd-Hurwitz was appointed chief executive in 2012.

Mr Mulcahy’s departure had previously been made known.

It is interesting to note the timing of the retirement of Denis Hickey from the position of global chief operating officer and US head at Lendlease.

Mr Hickey, a well-known top real estate executive here for at least a decade, is understood to be returning to Australia from New York.

The latest developments makes the timing of his return curious and prompts questions about whether he could be in line for a job running GPT or Mirvac.

The top internal contender for the role at Mirvac is head of commercial property Campbell Hanan.

It makes sense that those in line for the Mirvac job would also be in the running to take the reins at GPT as well.