Being local the difference between making and breaking, says property developer

Queensland developer Don O’Rorke says southern property players wanting to make a splash in the Sunshine State need to partner up with a local or risk it ending badly.

In the property market it’s all about relationships.

And Consolidated Properties Group chair Don O’Rorke believes many southern developers and builders who have ventured to Queensland have foundered because they failed the relationship test – forming a partnership with a local property player.

The Brisbane-based property veteran, who has been involved in billions of dollars worth of developments in Queensland and interstate, said the value of local knowledge should never be underestimated.

“Everything we do is relationship based,” he said. “Melbourne and Sydney developers have come up here and built the wrong building in the wrong place. Melbourne and Sydney builders have come up and tried to take on the locals and it’s ended in tears.

“You have to have a local partner because one side of the street is different from the other side of the street and the out-of-towner won’t know that.

“The concept of relationships is homogenous but the application and delivery has to be locally ensured otherwise it ends badly.”

Consolidated Properties Group chairman Don O'Rorke.

Mr O’Rorke said Consolidated Properties was primarily focused on southeast Queensland because the “story is such a good one”.

However, it was always on the lookout for projects interstate and to link up with local property players who understood the different nuances of their own market.

“I characterise Brisbane as a city of deep relationships as is Melbourne. Sydney is more of a meritocracy. In some sense its easier to do business in Sydney rather than Melbourne and Brisbane,” Mr O’Rorke said.

“The principles are the same in property all around the country – location, tenants, making sure the building is correctly designed. But local partners understand the nuances of a particular market. If want to bring a Brisbane perspective to Sydney you have to make sure you have a Sydney partner.”

Mr O’Rorke labels himself a “fixture” in the Brisbane CBD, having started out as a leasing agent as a 20 year old after gaining a business degree from the Queensland University of Technology.

He quickly made the leap to Consolidated Properties and has partnered up with some of Australia’s top developers and investors in commercial and apartment projects since the 1980s.

Charter Hall and Deutsche Bank have linked up with Consolidated Properties a number of times, and supermarket giants Coles and Woolworths have worked with the developer on many projects.

The Liberman family-backed Melbourne finance and investment house CVS Lane and one of Australia’s alternative real estate investment managers, Qualitas, have also partnered up with Mr O’Rorke on projects.

Scott Hutchinson and Don O’Rorke on site at the Monarch Residences development in Toowong.

However, his most enduring relationship is with Hutchinson Builders, which has been Mr O’Rorke’s builder of choice for more than three decades.

The relationship stems from his friendship with Hutchies executive chair Scott Hutchinson that was forged during their time at Brisbane Boys College, where Mr O’Rorke boarded at the school when he was 11.

“My father died when I was quite young and BBC was a very formative influence through adolescence – the lessons I learned and the relationships I formed there,” he said.

“I met Scott Hutchinson when we rowed together in the boys 4s and we’ve been friends ever since. Construction is as difficult as it has ever been and were fortunate that we have that relationship with Hutchies that goes back 35 years and we’ve always worked cooperatively on projects.”

Consolidated Properties currently has $2.3bn worth of Brisbane apartment/townhouse projects on its books – Monarch Residences in Toowong, the mixed-use Yeerongpilly Green and the masterplanned community Cornerstone Living at Coopers Plains – are under construction.

Construction is well underway on the $450m Monarch Residences in Toowong.

Mr O’Rorke said it was seeking to add another two sites to its residential portfolio, focusing on the baby boomer/downsizers market.

The group also has a strong retail presence and in 2022, with partner CVS Lane, it put its neighbourhood shopping centre portfolio on the market for $500m plus. However, the offer was withdrawn.

“We took the portfolio to market, just as the market significantly changed and we withdrew them because we were not getting an acceptable response,” Mr O’Rorke said.

“So our strategy is to hold the asset and continue to actively manage them and we will take them to market at some stage over the next few years. We’re in no rush to do that because our view of the market is that its still pretty dislocated.

“The other half of our story is that we’re keen to get other projects into our pipeline and we’re making offers. We have conditional contracts on three greenfield sites for shopping centres. we want to add more shopping centres but whether they get through DD (due diligence) remains to be seen.”

The company recently completed an office tower at 895 Ann St, Fortitude Valley, that will be occupied by Defence Australia after the completion of an extensive fit-out later this year.

Mr O’Rorke said despite some negative sentiment towards the office market they were searching for another project.

“We are a believer in office despite negative reporting that has been occurring about the difficulty of getting people into work,” he said.

“We think fundamentally the top end of that market is looking for new premises they want to offer the best accommodation to their staff workers to get them back in the office.”