27/02/2020 - 16:04

Blackburne all in on apartments evolution

27/02/2020 - 16:04

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Paul Blackburne’s unwavering belief that Perth needs more apartments has been validated by the growth of his company into one of the city’s most prolific developers.

OPENING UP: Attendees at the Success and Leadership event were captivated by Paul Blackburne’s candid commentary on his career. Photo: Gabriel Oliveira

Paul Blackburne’s unwavering belief that Perth needs more apartments has been validated by the growth of his company into one of the city’s most prolific developers.

It is perhaps ironic that someone once frustrated with Perth’s small-town feel and determined to live elsewhere has made one of the bigger contributions to the ever-evolving fabric of the city.

But that’s exactly how Paul Blackburne’s career has panned out since he established his namesake development company in 2003.

While his business pathway hasn’t always been linear, Mr Blackburne’s influence on the increased housing diversity and added density in Perth cannot be understated.

Following his graduation from Murdoch University with a marketing degree in the late 1990s, Mr Blackburne headed abroad, in an effort to visit 50 countries in five years.

His journey took some remarkable twists, adding some improbable entries to his resume, including work as an extra on a Chinese soap opera, a stint at a high-profile recruitment firm in London, and several months spent as a diving instructor in Egypt.

Mr Blackburne told a full house of assembled professionals at Business News’ first Success and Leadership event for 2020 that while all of those roles were valuable experiences, it was not until he returned to Perth to visit family in 2000 that his development career began to take shape.

At the time, Mr Blackburne said he was no longer enjoying London, pining for the blue skies and friendly feel of the Western Australian capital.

He decided to take on a marketing role at his father John’s business, Blackburne & Joyce Real Estate, and quickly discovered he had an aptitude for project marketing.

“They had a project in Mandurah of 30 townhouses and they didn’t have anyone to sell it,” Mr Blackburne said.

“I got my [real estate] sales licence, and suddenly I was selling these townhouses and sold them all and made more money than I had in the previous year.

“I thought ‘That’s pretty good, I like that’.”

Mr Blackburne said he expected he would help his father’s business for about a year and return to a big city such as Sydney, Melbourne or New York.

But an opportunity arose in 2003 to purchase the rent roll from Blackburne & Joyce, providing a platform for Mr Blackburne to establish his own business, known originally as Blackburne Property Group.

For several years Blackburne’s operations were focused on property management and project marketing for other developers, with his services increasingly being sought by the city’s top apartment players.

“In 2007, we did 953 sales between four of us worth $600 million,” Mr Blackburne said.

“We did a lot of sales but during that period we were living frugally, driving old cars and not spending any money and saving.

“At that time I thought ‘I’m going to buy my own site one day and do what they are doing, because I think I know everything about it except how to finance, how to buy the land and how to find a builder, but I’ll work that out later’.”

Blackburne’s first development was the refurbishment of 18 older apartments at 84 Subiaco Road, the profits from which were invested into several sites around Perth.

“That was just when the GFC hit,” Mr Blackburne told the Success & Leadership forum.

“It didn’t really hit here, but people got scared. A few of the bigger national and international finance institutions that had sites sold them, so there was great land on the market and we saw an opportunity to pick up some at what I thought were cheap prices.

“While the world was talking about doom and gloom I was looking at it going ‘Wow, let’s buy this land’.”

From that time onwards, Blackburne no longer provided project marketing services for other developers, instead focusing on its own developments and growing into an apartments juggernaut.

In 2020, Blackburne has three major projects on its books in Subiaco, Karrinyup and Claremont, with a collective $700 million and comprising around 1,000 apartments, making it one of the most prolific developers in Perth.

Mr Blackburne said the impressive growth was driven largely by his unshakeable faith that, in the early 2000s, Perth was at the nascent stages of a housing diversity evolution.

“Only 10 to 15 per cent of people live in apartments here, over east it’s something like 30 per cent, you could just see what was going to happen,” he said.

“Even with no population growth we worked out there was demand for about 10,000 apartments a year here, just due to the demographic shift.

“For me it was about taking away the market’s ups and downs; we know the market goes generally in seven-year cycles, usually about two or three years of a tough market.

“This one has been five that have been tough so it’s a bit unique.

“I just ignored all that, and put together a 20-year plan, and thought if we do good quality projects in good areas and sell them at a fair price, then almost, not totally, no matter what the market is doing they will keep selling.”

While Blackburne’s burgeoning project pipeline may seem an opportunity for interstate expansion, Mr Blackburne said he would continue along the same path that has gotten him this far.

“We are still out there looking to buy sites, but we don’t want to grow, don’t want to list, don’t want to sell, don’t want to go over east, but we’re always open to opportunities,” he said in a jovial manner.

“So if someone came and said ‘We want to buy 49 per cent of your company for X (amount of) dollars’, then I’d think about it, as long as they have no say and they pay a lot more than what it’s worth.

“I don’t say yet that I’m a financial success, but it’s looking pretty good.

“There are plenty of people out there who have made money, but people say they are not a success in business because they leave a bad legacy, people don’t like them and their kids hate them.

“My definition of success in business is if you can have a good family life, be reasonably healthy, make some money and only have no more than 20 per cent of people hate you, then you’re doing pretty well.”

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