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People, people, people are the key

CRUCIAL issues impacting property are well known and frequently discussed. These include interest rates, the product and its location, building costs, inflation, capital gains tax and the goods and services tax, yields and economic and property outlooks.

All this aside, an aspect rarely discussed is the human factor related to property.

Much ink has been spent writing about the power and contribution of the common

people. Business operators are now acknowledging that their success was built on the strength of their people.

An important perspective of our organisation is to grow a business around the strengths and abilities of its individuals to respond to a growing and demanding marketplace shaped by cultural, demographic, economic, environmental, governmental and technological change.

Growing a strong national, international and local property consulting group has been based on important networks,

technology, research, industry and market knowledge and affiliations.

However, it is the local people, the staff, who provide the synergy for success.

When I was involved with the establishment of Stanton Hillier Parker after eight years of running my own residential real estate company, we were quick to realise that local market knowledge and contacts were powerful tools, together with the

quality of the talent a company employs.

Being head of the Perth office of a national firm with international affiliations, I appreciate the fact that our directors agree that a key to the success of a business is local ownership.

We make our own decisions on the west coast of Australia.

We often look to the east for wisdom but, in the end, we are the local business decision makers and that gives us total responsibility and flexibility to best serve the local market.

We can respond quickly and appropriately in any given situation. It has given us greater firepower in the market.

Our team of directors work hard and continuously support each other with ‘team plays’, another important ingredient of growing a successful business.

Key steps for growing a successful business include:

1 Provide a full service choice to clients – just like a menu that looks good when there is a choice offered

2 Place priority on having qualified, trained and motivated people on staff

3 Have the owners of the business work in the business

4 Use technology and intelligent market information gathering effectively

5 Nurture and grow networks. Build strength by getting backing from national and international offices

6 Understand the industry the business operates in and join professional peak organisations. For example, Stanton Hillier Parker is a member of The Real Estate Institute of WA, the Property Council of Australia, the Australian Property Institute, the Urban Develop-ment Institute of Australia and the Mortgage Brokers Institute

7 Create opportunities to communicate. Understand the power of using databases effectively and regularly

8 Increase the potential of your staff by providing appropriate ongoing staff training

9 Become a market leader by being the best. This may involve concentrating and expanding on niche areas of the business

10 Anticipate opportunities to expand. For instance, SHP has recently established a residential marketing division.

So where to now? Looking toward the property future, the GST is approaching, capital gains tax rules are changing, the stock market is uneasy and there is a possibility of interest rate increases, all of which impact the property market – albeit positively in the medium term.

The continued short supply of investment property, coupled with new capital gains tax rates and investor hunger for real returns well in excess of inflation – 6 per cent plus, will keep the investment market performing well.

Continued focus on location and quality of tenant will remain unchanged.

Rents will rise both in the commercial office and industrial markets. Rises will start in the city for offices and spread from the CBD to the suburbs. The move will be slow but positive.

Industrial rents, particularly in prime industrial locations such as Welshpool and Kewdale, are currently at $55 to $70 per square metre. Base rental levels will remain steady in the foreseeable future.

Should interest rates rise, some further pressure will be placed on rental rates which could see significant growth for the first time in several years.

Industrial land values have risen steadily over the past few years and this growth is expected to continue despite the introduction of the GST.

Rising interest rates may see the withdrawal of some smaller owner occupiers who believe leasing will be a safer option for the business.

We will see even greater activity in the residential and commercial markets, particularly with a nervous stock market.

As interest rates rise slowly, by 1 to 2 per cent or more, this will not immediately impact returns sought by investors.

We are in for continued good times in property with buyers remaining selective and location and quality of tenants continuing paramount.

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