05/12/2006 - 22:00

Satterley playing at the top of his game

05/12/2006 - 22:00

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Nigel Satterley mingles with WA's business elite and with prime ministers, but it wasn't always so glamorous for the man who leads the nation's largest independent residential development company.

Satterley playing at the top of his game

They spoke of housing affordability, land supply, the skills shortage and two-year apprenticeships.

What else would Nigel Satterley discuss with the prime minister, John Howard, over dinner at The Lodge other than the grand final win by his beloved West Coast Eagles football team?

The private October soiree for 12 of Western Australia’s business elite is further evidence of the property mogul’s place in the state’s top echelon after nearly 36 years in the business.

It’s a position he’s clearly comfor-table with, especially as it is more than just today’s buoyant property market that earned him an opportunity to gain John Howard’s ear.

“I told him we’ve got to get more land onto the market and more Key Start funding,” Mr Satterley said last week following address to more than 500 guests at WA Business News’ final Success & Leadership event for 2006.

“We’ve got to have inducements to get first homes buyers means tested and into housing,” he said.

“John Howard has a deep social conscience and realises that high house prices won’t help the state to grow.”

Acutely aware of this deepening problem, Mr Satterley knows high house prices are a huge disincentive to people with much-needed skills coming to the state.

How times have changed.

In 1976, the median house price in Perth was just $27,500; now it is approaching $450,000.

Mr Satterley recalled that, when he started Statesman Homes in 1970, the average homeowner’s dream was to secure a quarter acre block.

As metropolitan development and population growth has intensified, the quarter acre has become a rare commodity with people instead choosing to squeeze onto 360 square metre cottage blocks.

The first Statesman Homes were built in the suburbs of Innaloo, Warrick and Duncraig on a four-month construction schedule with a colour palette of either brown or white brick.

Native bushland gardens were the height of landscaping fashion at the time.

“In those days, you would finish a home in about four months; during the recent boom it’s taking up to two years to build a single-storey home,” Mr Satterley said.

Statesman Homes became one of the largest home builders in WA, constructing around 650 homes a year.

Success followed success, and Mr Satterley credits this to the guidance of the late Sir James McCusker, a prominent WA financier, developer and philanthropist, who was his mentor and the person who suggested Mr Satterley go into real estate.

“Sir James was a real visionary. He would work out the deal in seconds and could add up faster than a calculator,” Mr Satterley told the breakfast audience.

The kid from Cunderdin and former jeans merchant first met Sir James in 1968, when Mr Satterley deposited $50,000 into Town and Country Building Society, which Sir James founded.

The deposit was the result of his first property deal, buying and selling two vacant blocks of land. The money would have been used to fund the opening of jeans shops in Perth, had it not been for the urging of Sir James.

“I was a young boy from the bush, who wore a business suit and was willing to work hard. There is no substitute for experience, you must be prepared to learn the business,” Mr Satterley said.

Mr Satterley’s life path took another twist during the following decade.

In 1975, he received a call from lawyer-turned-entrepreneur, Robert Homes a Court, who asked if Mr Satterley would come up north to a place called Undulup, near Wanneroo, with friend, former premier Sir Charles Court.

Undulup was, in fact, a place called Joondalup, which was to become one of the fastest growing sub-regional centres in Australia, thanks to early assistance from the Joondalup Development Corporation and its first chairman, Mr Homes a Court.

Mr Satterly said that, if nothing else, the Joondalup experience sparked his interest in land development, which was to develop further in 1980 in the form of Satterley Property Group.

The South Perth-based company is now the largest independent residential developer in Australia and has the third largest land bank in the country, behind listed developers Delfin Lend Lease and Stockland.

With the help of investors, including 40 prominent WA families, Satterley Property Group has built a management portfolio of 32,000 lots with an end retail value of $8 billion.

Establishing the suburbs of Bateman, Bull Creek, Leeming and Murdoch in the early 1980s, Satterley Property Group has gone on to produce more than 130 residential land estates throughout WA, comprising 40,000 lots.

The list of estates reads like an A-Z of WA’s most sought after contemporary locales, including Beaumaris, Brighton, Dalyellup Beach, Kennedy Springs, Princeton, Provence, Secret Harbour, Sanctuary Waters and most recently, Marmion Cove.

The 2.2 hectare Marmion site, which the group bought for $9 million, was approved for development in October and will produce 35 lots and an estimated $23 million when sold.

Recalling his other lucrative deals, Mr Satterley rates his acquisition of 1,000ha at Halls Head, Mandurah, with the McCusker Group as one of the best.

The partners paid $12 million for the site in 1988 and, after six months, sold 6,800 lots to cover costs. Mr Satterley believes the land is now worth between $275 million and $300 million.

Spying another bargain in 1992, he paid $11.2 million to Axa Australia for Lot 9 Marmion Avenue, Quinns, which has since appreciated to a current value of $185 million.

His proudest achievements are the urban renewal programs New Kwinana and New North, in partnership with the state government’s New Living program and the McCusker Group, in which 1,300 existing dwellings were transformed and a total of 6,300 housing lots created in those regions.

The New Kwinana partnership of 1992 was the first joint venture redevelopment between the government and the private sector, after which a further five would follow for Satterley.

Mr Satterley said the idea of putting something back into the industry and supporting the community was the result of old fashioned values passed on from late father, Roy.

Another he shared was “learning by your mistakes”.

His biggest regret in 26 years of land development was not buying the 4,000ha Amarillo Farm near Karnup. The property was on the market in 1988 for $5 million, and was bought by Sir James McCusker in 1991 for $6 million, later becoming a blue gum tree farm.

In 1992, Homeswest bought the property for $9 million.

“I could have bought it for $5 million as a long-term hold but the drainage and environmental issues were a challenge. It’s increased in value nine to 12 times in 15 years [at current values] and has a population of 90,000 people,” he said.

Not one to dwell on the one that got away, Mr Satterley is looking far ahead at tropical Queensland as he enters the next phase of his career.

Cairns is at the epicenter of a residential development push in the area by the Satterley group, starting with 1,500 lots at its Smithfield Village master-planned estate near Trinity Beach.

The group is currently constructing a builders’ display centre, from where it will sell affordable house and land packages at an average price of $300,000.

Mr Satterley said he would spend one in every five weeks in the tropics overseeing the project, which he hopes will be followed by more residential subdivisions down the coast to Townsville.

“We’re now in the process of establishing our office in Cairns and have already received hundreds of expressions of interest, with many from WA. We’ll expand the Cairn’s project slowly as we have done through the South West of WA,” he said.

While feeling bound to warn investors of the pitfalls of trusting high-geared property developers buying overpriced property, Mr Satterley is confident in the strong financial controls he has implemented in his business.

“Overpriced property sends developers broke. Satterley is geared to less than 5 per cent of our net worth. We’re on a solid foundation,” he said.

So what happens when you’ve been there and done that, having worked through so many property cycles and reaching the top of WA’s property game?

Any mention of the word retirement and Mr Satterley is quick to kick the concept out of the park.

“It’s been an exciting journey for 36 years and I hope there’s another 25 to go.”

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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