No.15: Property developer Lang Walker
Developer Lang Walker has taken the challenges of the pandemic in his stride and is banking on a big return to the office with his latest Sydney project.
Sydney property developer Lang Walker has a message for people in business who are worried about what to do as a result of the pandemic: just get on with it.
Walker, who has been in the family business in earth moving and then property development for more than 50 years, has continued to invest in office precincts and residential and industrial developments around Australia through-out the pandemic and has no intention of slowing down. One of his major projects, the $3.2 billion Parramatta Square development of what he believes will be a second Sydney CBD, next to Parramatta railway station, is now coming to fruition after a decade of work. It follows the completion of his $2.5 billion Collins Square project in Melbourne’s Docklands area.
Read the full 2021 edition of The List: Australia’s Richest 250
Meanwhile, he is working on a $3 billion project in Adelaide with the state government and a development for 46,000 homes in southern Malaysia, and has just reached an agreement for a development with the Maroochydore Council in Queensland.
“There is a lot of opportunity around,” Walker tells The List on a tour of his new office precinct at Parramatta. Two office towers are complete with another two well under way, and they are set to be finalised and tenanted by the middle of next year.
“Over the past year we have increased our development pipeline by about $8 billion, up to $30 billion if you include our operations in Malaysia,” he says, adding that some opportunities have come up for his company because others have said “Oh god, we don’t know what is going to happen.”
“I failed retirement,” the fit-looking 75 year old says simply, as he explains how all the plans for the precinct at Parramatta will come together – including a light rail, the relocated Powerhouse Museum and his four office blocks right next to the station. “When these two buildings were built,” he says, pointing to two buildings that have just been finished, “we were spending $80 million a month every month on the project.”
Walker, who has seen many ups and downs in the property cycle in Australia during his years in business, says while no one could have foreseen the COVID-19 pandemic, people need to realise there will always be major, often unforeseen, events, sometimes once every 10 years or so, which have to be dealt with. He recalls being at a business conference in America in 2019 where everyone was talking about the outlook for a strong economy with low interest rates. “My thought at the time was that it had been more than 10 years since the last crisis [the global financial crisis]. Crises seem to happen every 10 years.”
He says his response to COVID has been to get on with business and seek out opportunities, and not to use it as an excuse. “We have used the past 12 months to look at ways we can sharpen up our business, make it more efficient and look at some other opportunities,” he says, adding that people need to make sure they don’t “get sucked into a spiral of depression about the pandemic. You need to keep a positive attitude and look for opportunities. There are a lot of opportunities around.” A year after the start of the pandemic, he says, there are still executives who have spent months working from home. “There are executives in the property industry who have not been to the office in months, but how can you be a chief executive and run a company from home?”
Walker’s project at Parramatta is the biggest commercial development under way in Australia at the moment. It began with the idea of teaming up with Parramatta Council seeking to refresh the city centre after a series of false starts. The original deal did not go ahead, but Walker continued talks with the council and ended up with a much bigger project with some 270,000sq m of space. Its tenants include Westpac, the National Australia Bank, the Link Group and the NSW Government.
Wary of the cycles in the residential property market, Walker rejected suggestions that the area include apartment towers, arguing that it should retain its focus on becoming a CBD. When all the office blocks are leased they will house some 30,000 workers – it’s a little larger than the precinct he has developed in Melbourne at the Docklands end of Collins Street.
Walker – who comes from Sydney’s Sutherland Shire, an area more recently represented by Prime Minister Scott Morrison – argues that having a vibrant CBD in Parramatta will save thousands of people hours of daily commuting if they can find jobs locally rather than having to travel to the city each day.
‘Most people I talk to have done pretty well during COVID but the effects are going to be felt later this year when it starts to come and bite us’
He also sees the new precinct as a boon for cash-strapped businesses, which he argues can rent space in his new office buildings for a third of the price of the rents being charged for upmarket city office real estate.
“The demand for office space in the Sydney CBD has peaked,” he says. “Big corporations are saying, why do we need to pay $2000 a square metre in the city when we can be in Parramatta for a third of the cost? Big corporations are going to become even more focused on saving costs and they will want cheaper office space.”
Walker, who started working with his father Alec when he was 20, says he keeps on working because he loves it. “I love what I am doing,” he says simply. “We don’t call ourselves property developers, we are place-makers. And we love a challenge.”
He loves to take on difficult projects, breathing new life into neglected sites such as the controversial Finger Wharf he developed years ago in Sydney Harbour, a project that was often attacked by former Prime Minister Paul Keating and which has become an upmarket outdoor restaurant strip, and Sydney’s King Street Wharf. Or the development of a shopping centre and precinct at Rhodes, once of the most industrially polluted areas of Sydney.
Similarly, his development in Melbourne’s Docklands was about regenerating a rundown area of the city. “It was a big move to try and get some of the law firms to move out of the Paris end of Collins Street down to the Docklands end,” he recalls. “I wouldn’t let our people call it Docklands; we called it the New York end of town.”
Walker says he takes great pride in seeing his long-term developments come to fruition. “If you look at photos of what Parramatta looked like in the past and what it is going to look like when we are finished, it is pretty rewarding,” he says.
He remembers the Walker site in the Docklands in Melbourne. “Our office down there was in an old railway shed. Every time it rained we had to run around with buckets and move our desks and another leak would pop up.”
Walker started out in the mid-sixties in his father’s business in earthmoving and excavation. But Lang was much more adventurous than his father, wanting to move into property development. “He wanted to retire and was always worried when I wanted to expand,” he says. Walker found himself having to play down many of his business deals as his father was always concerned about getting into debt. Eventually Walker senior, who lived to the age of 102, retired from the business while his son went on from project to project.
He has also expanded into Malaysia as a result of dealings with the Kwok family, originally investors at Collins Square. Current developments also include the $400 million Bankstown campus of Western Sydney University, and a medical research centre in the south-western Sydney city of Campbelltown.
While he is continuing to invest, Walker has no illusions about 2021 and says it will be a challenging year still overshadowed by the pandemic. “Some businesses have been doing incredibly well during this period, but others such as travel and restaurants have suffered,” he says. “Most people I talk to have done pretty well during COVID but the effects of the end of JobKeeper and JobSeeker are going to be felt later this year when it starts to come and bite us.”
Walker has some simple advice for people in his line of business. “Never give up; be patient and have a long-term view,” he says. “You can’t just go in there and think you are going to make money on day one. These things take years and years to mature. You need to add value to what you do and do everything properly.” He is aware that he is a hard task master.
A keen sailor, Walker normally holidays in Europe during the Australian winter but COVID has seen him spent more time hovering over the detail of his developments in Parramatta. He says developers need to be aware of the changing demands of office workers: “What will be the trends after COVID? Everyone is not going to be working at home but COVID will change the way people work. Pre-COVID there was a great push to cram up work spaces and put people close together. Now it will be more spread out.”
He says in workplaces of the future people will be given spaces or “innovation hubs” where they can get together for meetings and to exchange ideas. He is factoring this into his buildings, with internal spaces and groups of floors that can be rearranged or designed by tenants to allow meeting spaces. “We might break up [office blocks] into villages of three stories that can be designed by the tenants. You have to be looking out to the future.”
But when it comes down to it, Walker says, some things don’t change. Take the old cities of Europe with their central square. I don’t think we have changed over thousands of years,” he says. “All of the town planning that was done back then was pretty remarkable. People still want open spaces and squares. They want connectivity.”
Walker also has the $100 million Kokomo resort in Fiji that he admits is more of a personal hobby than a hard-nosed investment. COVID has forced the closure of the resort and he has used the time to do maintenance, trying to keep on a large proportion of its workforce. “I am a very positive person,” he says. “I can’t handle people using COVID as an excuse.”
He sees some local governments now being keen to push ahead with developments as a way of generating more jobs in their area. “When we make a decision to invest in a development, it is usually big,” he says. “If you get it wrong, it is a big wrong. You’ve got to be watching the cycles. I have my gut working all the time to try and pick those areas of opportunity.”
COVID has allowed his company to hire some good people who have left other jobs, he says. Walker Corporation has some 500 staff around the world, including 80 in Malaysia and Singapore. But Walker worries about the future of the broader Australian workforce. The high cost base with holidays and loadings adds to the cost of building and makes Australia an expensive country for building and manufacturing, he says. He also worries that the country is becoming more divided over issues such as the debate over Australia Day.
He has no plans to take Walker Corporation, which was once listed on the ASX, public again.
“We have some excellent managers in the business,” Walker says. “The company is not run with a lot of structure. All our key guys have been with us for more than 20 years. We don’t spend a lot of time going around in circles. We make a decision and go forward.”
Read the full 2021 edition of The List: Australia’s Richest 250
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