“In business and property development, you need to take a modicum of risk, but you don’t need to make a large bet."
It's all about the sub-$500,000 sales: Evolve and Ron Walker's off-the-plan development strategy
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It’s hard to separate Ron Walker from Melbourne, politics, big business and money. Walker was lord mayor of Melbourne (1974-1976), federal Liberal Party Treasurer (1988-2003), Fairfax Media chairman (2005-2009), and he’s still a successful company executive.
Since starting his business career as a backyard chemical maker more than 50 years ago, Walker has amassed a personal fortune of $800 million, according toBRW magazine’s Rich List.
“Are you worth $800 million?” I ask in this interview.
Walker: “I’m not prepared to discuss my own personal finances with anybody. Why should I? It’s my private business.”
Does he dispute the BRW Rich List figure?
Walker: “I don’t really care what BRW says [I’m worth]. When the magazine comes out, I don’t say anything. I don’t even read it. But I think BRW do a lot of research as to what business people are doing or not doing.”
Walker also counters persistent speculation that a syndicate led by him wants to wants buy The Age newspaper.
“I don’t want it now; I’m getting too old to own The Age,” the 73-year-old says, despite the continuing rumors. “Time has passed me by. And they [the Fairfax Media board] would want too much money for it. You would have to join it with 3AW (already owned by Fairfax) to make it work in this digital age.”
Walker says he and his then partners Lloyd Williams and Sir Rod Carnegie, as part of property development group Hudson Conway, offered to buy The Age more than two decades when Fairfax was in receivership. “But the receiver wanted too much money for it so we walked away,” he says.
Today, Walker says the Fairfax Media “rivers of gold” aren’t there anymore to tempt him.
“I don’t have the years left to turn it around and make it profitable,” he says. “But I’m sure there’s plenty of other people capable of regaining revenue in terms of advertising.
“I have other interests,” he says, referring mostly to property development. In a wide-ranging discussion with LeadingCompany, Walker reveals the secrets to his success.
Along with partner Ashley Williams (no relation to Lloyd Williams), Walker owns Evolve Development, a Melbourne-based company with about 8000 blocks of land and a $1 billion book of apartment construction.
Walker says a secret to his business success has been forming good partnerships. He describes Lloyd Williams as a brilliant strategist, who brought built-in experience and “rat cunning” to a partnership that lasted more than two decades until 1999.
Today’s partner Ashley Williams, a civil engineer prior to founding Evolve in 2003, had been involved in a string of major projects, including Melbourne City Link and the $1 billion New Quay precinct at Melbourne Docklands.
“Ashley came to me about 10 years ago with a vision to become a dominant builder and landowner and I backed him all the way,” Walker says. “Ashley has 14 young men and women upstairs (at the Albert Road offices) that are all trained and qualified.
“The secret of our business is to keep our young people invigorated. All their views are taken into consideration – it’s just not lip service. We actually listen to what people have to say. I think it’s terribly important to promote the young person of the future.”
Walker says Evolve focuses on building apartments for a sale price of between $300,000 and $500,000. An apartment block includes community gymnasiums and other recreational facilities.
“We don’t want to be in the $1 million-to-$3 million price bracket – that’s a different market,” he says. “We want to cater for the young, transient population.
“We do a lot of research as to what people want and it’s one, two and three bedroom apartments that have all the electronic gadgetry, a kitchen, a laundry and a lift to bring up the bike. They also want car parking.
“I think when people are maturing and finding their way in life, they want to be near the action. So we make sure our developments are close to public transport and recreational facilities that people can walk to, such as the MCG.
“I don’t think young people want to spend time mowing lawns, and a lot don’t want backyards. They will eventually get married and move to a property with a backyard.”
“We are terribly risk averse and we don’t want the market to dictate the fortunes of our company,” he says. “I’ve been around for decades and I understand the frailty of the property market and how quickly it can turn.”
Property developers, perhaps by the very nature of the industry, are renowned for going broke. Walker says property developers invariably fail because they are greedy, borrow too much and can’t read the market.
“In business and property development, you need to take a modicum of risk, but you don’t need to make a large bet,” Walker says.
“It’s not worth it. We don’t want to be the biggest in town, or the smallest in town, but we want to stay alive. Businesses go broke because the managers lack the entrepreneurial flair and marketing skills to enable it to survive.”