A WA mining dynasty’s move to new West Perth headquarters reflects a change in identity for the company.
A family business with lengthy ties to mining in the Pilbara has proved equally adept in real estate recently, having secured a vast array of property interests.
With a portfolio of assets from Welshpool to San Francisco, family office DFD Rhodes generated $3.9 million in revenue from its investment properties in the year to June 2021.
It holds an estimated $150 million in property assets, plus $100 million in agricultural land.
The company’s property interests encompass commercial, industrial and multi-residential assets in Western Australia, NSW, Victoria and the US.
DFD Rhodes started as an earthworks business founded by the late Don Rhodes in the 1930s, when he won a contract to cart road base for the Canning Highway.
The company was incorporated in 1950 and soon became one of the state’s largest earthmoving operations, next to the Bell Brothers and Perron Group.
DFD Rhodes built the runways for Perth Airport, the diversion dam for Lake Argyle, and did the earthworks for the Narrows Bridge.
DFD Rhodes founder Don Rhodes in Kalbarri in the early 1980s.
In 1947, the company bought two hectares of industrial land in Welshpool in 1947, where it housed its workshops to maintain equipment.
It also ran facilities in Port Hedland to support its mining activities.
DFD Rhodes purchased further industrial land in Kewdale and moved its workshop there in the early 1970s.
The company leased its Welshpool industrial yard to Total Steel, then Coastal Midwest Transport, which still holds the lease on the property.
The group recently decided to divest its Welshpool asset, partnering with WA developer Hesperia to subdivide the land into eight lots from 1,088 to 3,458 square metres.
DFD Rhodes chief executive Matt Keady said he began to appreciate the dearth of industrial space in the market when Coastal Midwest Transport started searching for new sites as it prepared to leave Welshpool.
“We expected that there would be a selection of sites … but it wasn’t the case,” Mr Keady told Business News.
“[We] couldn’t believe how tightly held it was.”
LJ Hooker’s expressions of interest campaign for Welshpool finished at the end of May, with about 40 enquiries from owner-occupiers, developers and investors.
The developed lots are expected to fetch more than $600 per square metre.
Rhodes' industrial property in Tennant Street in Welshpool.
The family also holds 15,378ha of farmland, mainly in North Dinninup, and its agricultural activities generated $9.7 million of revenue in the year to June 2021.
Its farming interests go back seven decades, when Don Rhodes started acquiring arable land in the state’s south, including in Lake Grace, Wokalup and Boyup Brook.
“We started buying farming land in the 1950s, [but] we weren’t actively farming it, we were developing it,” Mr Keady said.
“The Pilbara operations shut down during the summer, so Don had a habit of buying farming land and sending men down with equipment to clear it.”
The family today has a far more hands-on approach to its farming enterprise, with 20 of its 25 staff based at its North Dinninup property, where it runs a livestock and grain enterprise.
“The bigger part of the company is in Perth,” Mr Keady said.
“The farm is the only, what you might say, ‘hands-on’ business that we do. Other than that, we are investors.”
Rhodes to riches
DFD Rhodes cemented its place on Business News’ wealth creators list on Data & Insights last year as its iron ore royalty fortune rose to $300 million.
Don Rhodes was one of the state’s earliest miners, with his Jimblebar, Hope Downs and Rhodes Ridge finds in the Pilbara in the 1960s setting the stage for wealth.
The company founder was renowned for his work with workshop manager Harold Ridley in developing the Rhodes Ridley in 1958, the largest road truck in the Southern Hemisphere at the time.
The truck could cart up to 200 tonnes of ore, a significant increase on the commonly used 40t trucks. Don’s son Ken Rhodes took the reins as managing director and chairman after Don’s death in 1987.
As Ken Rhodes approached his retirement in 2012, the family took on Matt Keady as the company’s chief executive.
Mr Keady said he had been working with the family as a private consultant for decades leading up to his appointment.
“I met Ken’s mother in 1988 and I had my own business advisory in those days, but about 10 years ago the Rhodes decided to in-house me,” he said.
Mr Keady trained as an accountant and cut his teeth at EY before setting up his own business consulting advisory.
He developed a close friendship with Ken Rhodes, who died in February 2020.
“[When] Ken was heading towards retirement, he and I started talking about [me] moving into the office to try and manage the show,” Mr Keady said.
The family farm in North Dinninup.
The company bought three lots on Ord Street in West Perth for $8.43 million in 2019, as the focus on its investment activities grew and it searched for a centrally located office.
Its $20 million 32 Ord Street office, designed by Perth architects Cameron Chisholm Nicol, is nearing completion.
DFD Rhodes is set to occupy the penthouse of the building and lease the remaining three floors to other parties.
Three of Ken’s sons work in the business: company director Mark Rhodes, and Chris and Damien Rhodes, who both work on the family farm.
Investment focus DFD Rhodes partners with several funds management groups to invest its revenue, including east coast real estate group Qualitas.
The family office’s investments are divided into property, fixed interest, large- and small-cap equity.
“It’s fair to say the investing activities of the company is the area that’s growing the quickest, and that suits the West Perth environment,” Mr Keady said.
With Qualitas, DFD Rhodes part owns a San Francisco office building where telecommunications company 8x8 houses its headquarters.
It’s also funding the development of a New York residential tower in Chelsea, from which it will generate lease income.
DFD Rhodes holds interests in shopping centres on the east coast and some Sydney CBD assets.
“A very big part of our property interests these days are in partnership,” Mr Keady said.
DFD Rhodes manages some of its equities with international partners including Jefferies Financial Group.
The WA group also kicks in development funding, mainly for east coast properties.
Mr Keady said the business’s growth accelerated in about 2000, when it took back the farm after leasing it out from the 1980s.
The company’s farmland is not all contiguous and Mr Keady said the family was looking at opportunities to expand.
“We’d like to expand it but with those types of things you don’t know when opportunity will arise,” he said.
The headquarters of 8x8 in San Francisco, one of DFD Rhodes' investment properties.
In the year to June 2021, DFD Rhodes generated more than $156 million in iron ore royalties.
This was a near 60 per cent increase on its royalty revenue the previous year of close to $98 million.
Don Rhodes was mining iron ore at the same time as Lang Hancock, and the Rhodes family today is embroiled in a dispute with Gina Rinehart over royalties at Hope Downs.
The family launched Supreme Court action in 2013 for a portion of royalties from the Pilbara mines, which are jointly owned by Rio Tinto and Hancock Prospecting.