Anthony Catalano’s digital property dream with View Media Group
Irrepressible real estate magnate Anthony Catalano has holistic ambitions in the property market.
Antony Catalano is sitting in the dappled sunlight looking out over the ocean at his luxury hotel Raes on Wategos, which money from Fairfax – now part of Nine Entertainment – paid for.
“I think this is the best bit of beach property in Australia,” he says of the Byron Bay establishment, while sipping sparkling water and greeting AFL star Chris Judd and Keybridge chief executive Nick Bolton, both guests at Rae’s (Catalano owns 12 per cent of Keybridge).
The former journalist turned hotel owner and mini-media magnate is now embarking on a massive digital play, having secured the backing of Seven billionaire Kerry Stokes. Catalano says he wants to become the one-stop shop for every touch point in Australia’s favourite pastime – real estate.
The story of Catalano – or the Cat, as he is known – is one of legend in media circles. The son of immigrants from Italy, he started in 1995 as a Fairfax copyboy at The Age, paid some $7000 per year.
He dabbled in property – cheap stuff – in his early 20s before being appointed property editor and then marketing director of The Age. In 2011 he was fired by Fairfax and promptly set out with the woman who would become his third wife, Stefanie, to start a rival property publication, The Weekly Review.
One year later, Fairfax took a 50 per cent stake in his magazine for $77m in cash and magazine assets, then purchased the second half in 2015 for $72m in shares plus cash. Catalano rejoined Fairfax as chief executive of its online and print property portal Domain.
Proving it is easy to make the same mistake twice, Fairfax pushed him towards the door again with a big cheque in 2018 once Domain was spun out into a separate ASX-listed company that was still controlled by its parent company.
In the middle of that he bought Raes – with help from the Fairfax payout – a much loved, expensive-to-stay-at but slightly shambolic Byron institution where rock band Led Zeppelin, actor Tom Cruise and others have been guests.
Catalano paid $12.6m about a decade ago and has since knocked back offers above $70m.
“This place is not for sale,” he says of the Mediterranean-style hotel which has just received another Good Food Guide hat for its restaurant. “We were so close to getting two hats,” he adds.
Initially, Catalano thought the property might be a great beach house for his nine children and their spouses during summer trips from Melbourne, but quickly realised that Byron loves Raes and taking it from the high-paying customers would be a bad move.
“One of the things with owning this place is you realise you are really just a custodian,” he admits.
Catalano is always pulling lessons learned from old businesses and using them in new ones. As diverse as they sound, the common thread is property.
Catalano says Raes was pulling in $2.7m in revenue and making about $600,000 of profit when he purchased it, and is now doing $12m of revenue and $2.5m profit. He’s increased staff from 17 to 71 and improved the restaurant.
As a result, rack rates are high – above $3000 per night for the better rooms – and the hotel is usually full.
“I don’t know what our tipping point is because we are trading at 100 per cent occupancy,” he says on what he can charge.
“When I was the circulation director at The Age the only way you knew if you supplied the newsagent with enough papers was if there was only one left. If it sold out you just didn’t know what you could have sold, and that’s where we are at with Raes,” he adds.
These days, the businessman could be considered the king of Wategos, having amassed several other properties besides the high-profile Raes, including a 1.25 acre block taking up about an 8th of the enclave’s buildable land, where he initially planned to build Raes Residences, but will now turn into a family compound.
He also lives in a stunning ocean-view home nearby, with his son and daughter-in-law buying the house next door.
Strangely for a man with so much skin in the game, Catalano thinks Wategos real estate pricing has been overcooked in recent times. The record for a Wategos house was $22m paid by Rip Curl co-founder Brian Singer to buy Geoff Morgan’s property.
Now, the agent for 19 Marine Parade is talking up the chances of a new record.
“Six out of the 75 houses in Wategos are on the market, and that’s before you get distressed sellers,” Catalano says. “There is a bit of lunacy around pricing.”
Fellow owners in Wategos include Adam Gilchrist, co-founder of F45 – or F4.5 as some Byron locals now call the embattled gym business – billionaire Afterpay co-founder Anthony Eisen and art collector Steve Nasteski.
Surging interest rates might well be dampening demand. The Reserve Bank has hiked the cash rate eight times in the past year to a 10-year high of 3.1 per cent from a historic low of 0.1 per cent.
Nadia Bandini, a real estate agent at Northcoast Lifestyle, believes the top end of the market in Byron still remains strong, “but the mid-range buyers more reliant on banks for finance have had to rethink their budgets”.
Those top-end types unconcerned by interest rates are likely to be booking his luxury charter boat Sea Raes, which takes high-paying passengers on adventures between Sydney and the Gold Coast. A 10-day booking on Sea Raes comes in during our interview, with excited chat among the team about the best place in Pittwater to stop for guests to swim.
Rising rates could be more problematic for Catalano’s latest major venture in the middle of the town of Byron Bay, known as Bonobo by Raes, which is being built by property developer Podia.
Catalano is effusive about the opportunity – currently a massive hole in the ground beside the Woolworths and just across from the Justin Hemmes-acquired backpacker bar Cheeky Monkeys.
When built, Bonobo will have 41 hotel apartments ranging from two to four bedrooms, to be individually sold but managed by Raes with the owners having to lease back to the pool for certain periods. Catalano has purchased one apartment and all 800sq m of retail, 30 car parks, and the management rights for the entire precinct.
The retail will be built around a central courtyard with bars and restaurants. If it works, it could be a hit, with Byron currently lacking a central hub for meeting and eating. The arrival of Hemmes across the road will probably help pull people away from the beach to create destination drinking and dining options.
On the downside, Byron Shire Council can be tricky to deal with and the outlook for the economy by the time it’s due to complete in 2024 is unclear, given inflationary pressures and rising rates.
However, it is a new digital real estate company rather than direct property investment that is the main game for Catalano.
View Media Group is a real estate digital media and agent services business – something he repeatedly says is not just a classified listings portal like Domain but a holistic real estate product.
Stokes’ Seven West Media has emerged as a co-investor, taking a 20 per cent investment in VMG, with Catalano and his son Jordy owning about 30 per cent, and former Pratt son-in-law Alex Waislitz taking 20 per cent.
The business has a valuation of between $400m and $500m, based on capital raised. “My view is to create a virtual home store where you do all your transactions on the one portal,” says Catalano.
Catalano says that Domain, which he helped create, and REA – controlled by News Corp Australia, publisher of The Australian – focus on real estate advertising, which accounts for only $1bn of the $250bn transactional value of real estate in Australia.
“That’s 300th of the view of what the market is,” he says. “We take a holistic view of the market, not just on the advertising.”
Nowadays he’s thinking about the mortgage market, insurance, agent commissions, conveyancing, utilities and more.
Catalano gestures to the Raes restaurant and points to the spa.
“Look at what happens here: this is a whole-of-customer experience. We are doing everything from the luxury accommodation, massages, a cocktail brought to your room, the restaurant, our town car – whatever it takes,” he says. “Then if you look at the real estate market, the banks, the insurance companies, the media companies, they all take a clip.
“Why isn’t there a service that holds peoples’ hands through it?” he adds. “Something that takes the fear out of it, and helps me make a better decision, and a more informed decision, a more knowledgeable decision, and probably a cheaper decision.”
The product will allow potential homeowners to find a home to buy, lock in a mortgage, insurance, conveyancing, utilities and anything else that might crop up.
He was a seed investor in a company in New York, called Updater, which automates connections for power, gas, cable, and mail, and UK-based Rightmove also offers some similar services. VMG will offer these services plus all things real estate. On the other side of the equation, agents and banks can use the prop tech part of the businesses that sit below that, doing the lead generation, lead management, and acquisitions.
Catalano has been rallying his old team, hiring six of his 10 former executive leadership team from Domain and bringing his son Jordy and Tom Hywood – son of former Fairfax boss Greg Hywood – through the purchase of their AD Group company.
“All these people are absolute superstars and they are all working in this amazing business,” says Catalano. “It’s the best assembled and credentialed real estate media and technology company in the country.”
His first step in this holistic real estate plan was to get firmly back in the media game, which he did by partnering with Waislitz in 2019 to buy regional publishing business Australian Community Media from Nine.
They paid Nine $125m for ACM, which included $70m of property, employs 600 journalists, and now has 8.8 million readers across print and digital. Now with $150m of marketing support through ACM, Seven and including its Prime unit, Catalano believes VMG will be a major contender.
He says the media link is important.
VMG is a big digital play for Seven, which used to have Airtasker. And whether it becomes the property beast that eventually kills off his former company Domain will be known in the next few years. Perhaps Stokes is betting that history is a good indicator of the future – it which case it could soon be 3-0 in Catalano’s favour.
