CEO Matthew Chun says the ability to remain nimble and responsive to market changes has been a key to this Australian firm’s long-term success
Written by Kevin DoyleBecton Property Group (BPG) enters into every project with one goal in mind – to provide each customer with a singularly distinctive, memorable product of exceptional quality.
“There is an important difference to how we do business,” notes Matthew Chun, an industry veteran of 17 years, an Executive Director of the company since July 2007 and who was appointed CEO in August 2008. “We have our own construction arm and our own development arm. In the majority of projects we only use our company to build our own projects. We are very passionate and very protective of our brand and we can offer the best end product by controlling our own construction.”
Established in 1976 as a development and building company, BPG has since grown to an AU$500 million turnover firm with 130 employees in four distinct but complementary divisions: Development and Construction, Funds Management, Retirement Village Ownership and Management and Property Investment.
Ever evolving, BPG expanded into commercial property development in the 1980s, and became the first Australian company to embrace the development and construction of inner city residential housing in the early 1990s. BPG diversified yet again later in the decade when it began developing retirement villages and today manages more than 900 retirement units throughout the country.
“We visited the (United) States in order to carry out research on the well established gated community model and implemented many of those attributes when we developed our first retirement village, Brighton Classic Residences in 1999 which comprises 377 dwellings. This village has proved very innovative for Australia and stands as a benchmark for our retirement industry here. Our villages are spread over a wide geographic area and each village has a range of facilities that residents can enjoy which include club houses, restaurants, cafes and health and fitness centers,” Chun says.
BPG’s demonstrated ability to remain nimble and responsive to market changes has been a hallmark of its long-term success. Engaging the client throughout the project also sets BPG apart from others in its field as the company develops specific strategies for every project that remain consistent from start to finish.
“We are intimately involved with the customer over the whole development life cycle. We outsource design, but everything else is done in-house and the customer deals with one person, end to end,” Chun says.
Signature Project: One East Melbourne
When Australia’s commercial property market crashed in the early 1990s, BPG ventured into uncharted territory when it bought land from the Victorian State Government used for train shunting and began developing Eastside Townhouses and Residences, the first inner city medium density residential development. Today the final stage of this development, One East Melbourne, an 18-level premium residential tower and four-level commercial office development is nearing completion.
It was a bold step, Chun says, because “Prior to that, Australians hadn’t embraced city living. Everyone wanted to have their own home complete with backyard and garage, which was understandable for the time. Selling apartments / townhouses very close to the city for comparable prices to traditional homes was a risk if the market rejected this type of living. The project was very successful and this is where we started focusing on inner city living projects and, from there, forged a very successful business.”
“It’s the first time any developer had taken such an initiative,” adds Head of Development, Sebastian Catalfamo, whose position entails development management and delivery of all property development projects. “We embarked upon quite a demanding planning process and each stage had challenges. We needed various approvals from the responsible authorities and it also drew quite a lot of interest from residents since it’s a very prestigious suburb.”
At One East Melbourne, Catalfamo says “we were very mindful of creating something iconic and timeless. Those are the two words that come to mind when I describe the project. The idea is, if you drive past it – remembering that the early stages are now closing in on 20 years – it has not faded with age. The architecture has kept up and I think will continue to do so indefinitely.”
The company partnered with architect Claudio Silvestrin – the renowned devotee of minimalism based in London and Milan – for the 18-story residential tower geared toward the high-end market. Three-bedroom apartments ranging in size from 150 to 350 square meters include Silvestrin touches such as circular showers encased in floor to ceiling glass; ample use of porcelain tile; bluestone and leather panel walls, integrated laundries; and winter gardens with retracting sliding façade panel doors to create an indoor/outdoor lifestyle.
Part and parcel of every BPG project is the experience suite, which Catalfamo says offers the purchaser “the opportunity to touch and feel what they are going to get in a room that is fully fitted out.”
For One East Melbourne, BPG spared no expense, fabricating a $2.5 million suite placed on 26-meter stilts. “In that tower, the higher-quality apartments start on the sixth floor at 26 meters in the air. Customers could come to the site, take a lift up to the suite and see what they were going to buy from a visual perspective as well,” Catalfamo says.
The tower’s façade has been completed and the 84 apartments are expected to be occupied some time in June, primarily by empty nesters in the 45+ age bracket looking to downsize. Catalfamo says nearly all utilized BPG’s customization plan that allows purchasers to change their apartments in mid-stream in order to suit their specific needs. “Some dramatically changed the design, spending up to $200,000 in addition to their purchase price,” Catalfamo says.
While the tower completes the project, it is but one of four components. A four-floor commercial office block with 5500 square meters of space is connected to the tower. Additionally, the Treasury Apartments feature 27 apartments situated near an operating railway yard. And the Treasury Residences – 15 three-story individually titled freehold townhouses with double garages, internal lifts and fireplaces ranging in price from $1.7 to $2.3 million – are nearing completion.
Additional projects of note
BPG introduced Claudio Silvestrin to the Australian market when he worked on the Esplanade Apartments in St. Kilda, completed two years ago in an historic suburb of Melbourne.
“Esplanade Apartments is located behind one of Melbourne’s great historic hotels The Esplanade which is a celebrated Melbourne icon. In keeping with a building of that stature and prestige, the planning process was a challenging one and the project took many years to come to fruition. Claudio used a lot of stone with clean, smooth, streamlined spaces. The views are fantastic,” Catalfamo says.
The BPG corporate website describes St. Kilda “as a place of contrasts. There is refinement with many of Melbourne’s top restaurants, diversified culture and nightlife, but the area still retains much of its gritty past. Gently decaying buildings from St. Kilda’s glory days stand side by side with modern cutting-edge designs. It is at the same time emphatically urban yet playful with its beach and urban spaces. The Esplanade St. Kilda reflects these contrasts.”
In fact, Becton reaffirmed its position as designer and builder of top-end residential projects with its fifth ‘Gold Nugget’ Award for the Esplanade Apartments at the Pacific Coast Builders Conference in San Francisco - the most prestigious industry forum in the US. Esplanade Apartments won the Grand Award for the best international residential project.
BPG has also recently completed a project in East Melbourne labeled “Berry St” which is located only meters from the Melbourne Cricket Ground. Eight residential townhouses of four stories each include three bedrooms, two bathrooms, internal lifts and either home theaters or wine cellars in the finished basements. The project considered the historic significance of the local architecture and building form in its design thereby ensuring it was accepted by the local residents. “The townhouses sold around the $3.5 million bracket and have been very well received,” Catalfamo notes.
Weathering the economic storm
Chun says BPG has felt the impact of the global recession but this has been stabilized by a recent arrangement with an equity investor. “Australia is well positioned to work its way through the global recession. Our banking system has held up relatively well and, with the added support of a Government guarantee on wholesale funding, is still lending,” Chun says. “This should allow Australia to recover quickly when the upturn arrives.”
The government also unveiled a $10.4 billion fiscal stimulus package last October and that money is just making its way into the market. As Australia’s recognized leader in the development of social and public housing, BPG expects to benefit from work generated by that infusion of cash.
The company is also focusing on the first-time homebuyers market. The government has offered first-time buyers grants as high as $30,000 in some instances, which Chun says “has had a massive impact on the affordable portion of the market.”
Nevertheless, market conditions have dictated a reduction in BPG’s activities generally. We have reduced the number of developments and assets that we are holding on our balance sheet and in the funds that we manage due to the global slowdown in demand. This has resulted in the group focusing on development projects designed to produce apartments and homes ranging in the $300,000 to $600,000 price bracket.
Reduced demand across all sectors has provided BPG with the opportunity to re-focus on strategies to strengthen its relationships.
“From the early ‘90s until today we’ve been in a strong market and selling products has been relatively easy. Now, in order to compete, you have to have strong relationships with your customers and suppliers. We’re spending a lot of time internally on ways to improve that,” Chun says.
“We have a great brand and reputation in the area of knowing our customers and we need to continue to build on that.” he says.
Environmentally aware
Catalfamo says certain sites require substantial clean-up before development. Australia’s Environmental Protection Agency has a rigorous system in place overseen by registered auditors.
Additionally, Australia has two rating systems – one by the Green Building Council of Australia, the other the National Australian Built Environmental Rating System (NABERS) – for the regulation and implementation of green building standards. One East Melbourne, for example, is seeking to achieve 5-star ratings under both systems.
Marketing and people
BPG believes the most powerful advertising is created through recommendations from satisfied customers and puts a lot of emphasis on meeting that objective. The company has had many repeat buyers which help to enhance the brand and the group complements this through a range of Public Relations initiatives that target specific avenues to spread the brand awareness through the community.
In regards to recruitment, BPG has been fortunate to attract good people. Chun says “good people attract good people and we’ve been able to develop a network throughout the country. We’ve been able to identify those individuals who fit our culture.”
As the company moves forward, the immediate focus is on executing projects which in turn will further stabilize the balance sheet. “We worked extremely hard over the past 12 months to simplify the business, strengthen the balance sheet and focus on the things we do best and the next 12 months will see that continuing through the development and execution of our key projects,” Chun concludes.
View Digital Corporate Profile of Becton Property in Construction Digital June 2009