Big dreams: How Michael Fox built one of Melbourne’s largest property developers
Tuesday, June 3, 2014/
Real estate runs through Michael Fox’s veins. The 47-year-old Melburnian started his career managing residential properties, working his way into commercial sales before landing the job of looking after the property assets of Toll Holdings. It was at Toll that Fox met his future business partner Paul Little, and the duo developed their first property together in 2009. Their development company Little Projects sold 800 apartments last year and generated approximately $300 million in sales.
My background spans 25 years in the real estate business. I started out in residential property management and went through to residential sales and then commercial sales and leasing.
I worked at some of Melbourne’s largest real estate firms like McGees and Knight Frank, before moving into the corporate real estate world, looking after the real estate needs of large companies like the Smorgon Group. After Smorgon, I went to Toll Holdings where I looked after all the property matters for Toll, which is the largest transport and logistics company in Australia. At the time, my business partner Paul Little was managing director at Toll.
Our company really started by accident. I came across a spot in Richmond that I thought I could do something with and I spoke to Paul about it. So it was a combination of my expertise and his bank account.
The first development was in Stawell Street in Richmond, where we sold 133 apartments off the plan. Our second site was the Bunnings development in Burwood.
From that point, Little Projects really flourished and we bought a number of other sites. At that stage we had another partner who ran the development side of things and we only did one project every few years.
We are now probably Melbourne’s largest property developer and we sold 800 apartments last year. We focus on inner-city development sites in prime locations. We developed 159 apartments on Fitzroy Street in St Kilda, 250 in Bay Street Port Melbourne, and 388 on Toorak Road in South Yarra. We’ve recently finished developing 411 apartments at the old Tip Top Bakery in East Brunswick and started work on 367 apartments at our latest project, Central South Yarra. From there, we’ve sold off a plan 15 months before completion.
The business has gone from doing one project every few years to one of the largest developers in town. We have 1500 units in planning right now.
Little Projects was one of the first property developers to also offer property management to clients and that sort of harks back to my property management days.
My expertise in the development side of the business comes from my time at Smorgon and Toll, where I managed close to $1 billion of development over the 10 to 13 years I was there. My experience there was quite broad and varied.
We’ve achieved amazing success in the close to four years that I have been doing this full-time. We went from nowhere to being one of the biggest in town. We’re a small team but we really try to offer something different.
Our secret has always been buying in the right place and right location. We focus on developing locations in prime city-fringe locations, close to public transport. That’s the key to the whole thing: fantastic locations with better than average apartments.
Melburnians have learned to embrace apartment living. And they are not just living in smaller spaces, but embracing whole buildings and community living spaces.
We have always used a business plan. We have pretty good discipline in our business, which comes from our public company backgrounds and the rigours around public company life.
I tell people I think I’ve got the best team going around in Melbourne. Little Projects currently employs 25 professionals. The key is that it is not all about me. It’s also about the people we employ. We only employ the best.
Marketing is an absolutely critical part of the business. We’ve worked pretty hard at developing our brand as a quality developer and we completely committed to pushing our name hard. We’re only as good as what we deliver.
Our property management business is an important part of this. We lease apartments before we finish settling and building. None of our apartments go without a tenant for too long. It is all integrated.
Our next project at Lorimer Street in South Wharf will be something Melbourne hasn’t seen before: twin towers with community facilities, including swimming pools. It is loosely based on some developments overseas [but] it will be well and truly above what others have done.
We’re also looking at expanding interstate. We are watching those markets, although we’re cautious about the next steps. You never want to get too far ahead of yourselves.
I think the real estate market is still reasonably strong. In the earlier days, we had good demand from the first home buyer grants, and this was followed by self-managed super funds. At the moment there is a pretty good push from overseas investors in Melbourne.