Satterley charts course for growth

Nigel Satterley jokes that, when he takes his last breath, he will be sent straight to heaven from a funeral home three kilometres from his office.

“They’ve now got a system where they can send you straight to the pearly gates from 68 Stirling Street [Bowra & O’Dea] and that’s what’ll happen to me,” the Satterley property founder and Group chief executive told Business News.

“I’ll be in the rocket to the pearly gates, hopefully many, many years to go, but unfortunately we all die.”

At 76 years old, the boss of Perth’s largest land developer, Satterley Property Group, is adamant that retirement is not an option.

“I’ll die working,” he said.

Mr Satterley compared himself to businessmen and close affiliates Kerry Stokes, who’s 83, and Malcolm McCusker, 85.

“I’m [also] younger compared to [Sydney property developer] Harry Triguboff, who’s 90 [91] and still hits the ball well,” Mr Satterley said.

“You stop working, you die.”

Satterley Property Group took on LWP Group’s Western Australian assets late last year, bolstering the company’s position in the land development sphere and bringing 22 new staff into Mr Satterley’s organisation.

The most notable of those LWP staff to come across to the West Perth-based property giant was Brendan Acott, who started as Satterley’s managing director in October last year.

Mr Acott spent close to five years leading LWP having come to that company from PRM Property Group, which merged with LWP in 2018.

As such, he has a firm understanding of the experience of two businesses combining their operations.

“There’s a history of us bringing a couple of businesses together, albeit the transactional structure is different; it’s a path we’ve been down before,” Mr Acott said.

“[This is] materially bigger, but at the end of the day we’re dealing with similar equity sources, certainly in WA.”

Mr Acott said Satterley Property Group, which funds its developments via a syndicate model, had much larger international equity partners than LWP, but the WA-based investors were similar.

“The people who invest with Satterley in WA typically know what LWP was and/or have invested with LWP in the past,” he said.

Mr Acott, who is running the day-to-day operations at Satterley, remarked on his boss’s work ethic and the example it set others.

“Nigel’s work rate is like no person I’ve seen,” Mr Acott told Business News.

Describing a recent working week, Mr Acott flew into Sydney on a Sunday night, worked all week and into the night each day, and flew back to Perth on Friday night.

“[We were then] on the beat [walking estates] for six hours and forty-two degrees on Saturday,” Mr Acott said.

This was followed by an online meeting between the pair on the Sunday, and lunch with business associates.

“Then rinse and repeat; his work rate is unbelievable,” Mr Acott said.

Satterley Property Group has 2,400 lots under construction nationally, with 1,000 of those in WA.

Its landbank nationally has a $2.7 billion end value, and its WA land assets equate to $1 billion.

The company described its deal with LWP as a service agreement, which is the equivalent of entering a subcontract arrangement through a service delivery model.

Mr Acott said the two companies’ positions in the market meant the deal made a lot of sense.

“I think strategically, while the two businesses competed in the same markets, they operated quite differently, so there’s an opportunity for the best of both businesses to come together,” he said.

As for Mr Satterley’s focus, the property stalwart will continue to execute deals locally and nationally.

“I’ll be able to spend more time on statutory approvals, both at the state and federal level, and [on] working with our capital partners,” Mr Satterley said.

“We have been raising four [hundred] to $500 million a year, so [are] probably going to be needing to raise about $400 [million] to $600 million every year.

“[I’ll be] looking a lot more time on the acquisitions, especially in Melbourne and Brisbane.”

Satterley Property Group recently purchased the 53.4-hectare former Kingswood Golf Course from AustralianSuper, in a transaction valued at a reported $220 million.

Commenting on the deal, Mr Satterley said his team would develop the site, 30 kilometres south-east of Melbourne, into a master-planned community.

Satterley Property Group will manage Ellenbrook following its deal with LWP. Photo: Nativ Designs

Projects

LWP was best known for its establishment of Ellenbrook, a 1,200ha, 11,445-lot development east of Perth.

The suburb is the state’s largest master-planned community and is set to contain a significant public transport asset in its Metronet train station, due to open this year.

Former LWP chairman Danny Murphy took on the project of developing Ellenbrook in 1992, when the site showed little promise.

Mr Murphy helped bring the project to life and it now comprises 10 schools and millions of dollars of supporting infrastructure.

He and his business partner, Steve Robertson, of LWP Group, recently retired.

The service agreement resulted in Satterley taking on new projects in Yanchep, Alkimos, Banksia Grove, Dongara, Ellenbrook, Southern River, Treeby, Forrestdale, Wellard, Byford and Denmark.

LWP retained its Huntlee estate in NSW as part of the transaction but transferred all of its WA estates across to Satterley.

In 2023-24, Satterley Property Group expects to sell about 2,600 lots and settle 2,000 lots in WA, of 3,300 and 2,850 nationally.

Mr Satterley said he and his 115 staff aimed to raise those numbers.

“I think this business can build 5,000 lots a year; I don’t think we need a lot more people,” he said.

In WA, the company has 21 active estates, with about 40 per cent of the market share.

Its Piara Waters Aarya estate is taking shape, following its purchase of the 31.36ha parcel for $50 million in 2022.

Satterley’s Beaumaris estate, in Iluka, sold out upon completion last year. Iluka is one of the state’s fastest growing residential areas

The company is also developing land in Casuarina, Clarkson and Mandogalup.

Satterley Property Group has delivered more than 180 residential developments across WA, Victoria and Queensland across more than four decades.

Its deal with LWP has brought its volume of residential developments across the country to close to 200.

Some of Satterley’s projects have attracted controversy, including its proposed North Stoneville development, where the developer is aiming to deliver a 1,000-lot townsite.

The plan has hit several hurdles, with the Western Australian Planning Commission rejecting Satterley’s revised proposal for the 555ha site late last year.

The matter, which has been ongoing for at least four years, has been deferred to the State Administrative Tribunal.

Mr Satterley told Business News he was in discussions with the WAPC and SAT over how the company might progress with the proposal.

“We’re in discussions with the planning commission and SAT about how we move forward,” he said.

Beaumaris Estate in Iluka is in one of the state's fastest growing residential corridors. Photo: LP Visuals 

Market view

Buoyed by population growth, relative affordability and a gap between supply and demand for housing, Satterley Property Group’s lot sales are strong.

This time last year, the developer experienced a stark reduction in WA lot sales, with 1,169 lots sold in 2022-23 compared with 2,169 the previous financial year.

If its anticipated lot sales come to fruition this year, the company will record more than double the number of lot sales it did last year.

“Things are definitely picking up,” Mr Satterley said.

“We don’t see a boom. They’re picking up because we’ve got the high wages, strong exports [and a] shortage of product.”

He said he expected population growth to continue at a rate of 400,000 people each year into Australia, which would compound the need for more skilled workers.

“We’re confident that Australia will grow by 1.2 million persons every three years,” Mr Satterley said.

“Australia needs 800,000 to a million construction workers and other identified workers to cure its problems.”

Mr Acott said the construction cost increases affecting the land development market had stabilised, but labour shortages remained an issue.

“Material supply has settled, [but] labour remains tight,” he said.

“We’re not seeing the cost escalations that we saw, say eighteen months ago, [which were] particularly because of material constraints.

“What we are seeing is a more normalised form of escalation of costs.”

He added that house and land packages had grown more popular since COVID.

“Eighty per cent of people living in this country want to live on house and land,” Mr Acott said.

Previously, Mr Satterley said, 70 per cent of the population preferred to live in a house compared with more dense living options, but the pandemic had amplified the importance of ventilation, high ceilings and building orientation.

Mr Acott added that, in the current market, apartment construction was a challenge.

“Around the country, affordable apartments don’t work because the construction costs have gone up so much,” Mr Acott said.

“If you think of the product that we produce … the lot construction cost is a smaller percentage of the total cost to produce [a lot] than producing an apartment.

“The land component of an apartment dwelling … is so small, [and] such a such a significant component of the product is construction cost.

“Costs have gone up so high [that] … the ability for the apartment market to provide meaningful supply at an affordable price point across the country is very limited.”