Creating an apartments juggernaut has been all about good timing and sticking to a strategy for the head of the 2016 40under40 cohort.
There would be few people as bullish about Perth’s apartment market as Paul Blackburne, this year’s 40under40 First Amongst Equals.
While some talk of apartment oversupply, Mr Paul Blackburne is a firm believer in Perth’s structural shift towards higher-density living, and so has sharpened his focus on stoking supply.
In 2014, Mr Paul Blackburne famously said Perth’s metropolitan area would need more than 1 million extra apartments to keep pace with population growth, a position he’s not backing away from now even as the Western Australian economy falls back to normal from the heady heights of the recent resources boom.
“We are going to have a million extra apartments, the only question is whether that’s in 20 or 40 years, but it’s certainly most likely in my lifetime,” Mr Paul Blackburne told Business News.
“Only 15 per cent of people in WA live in apartments; in Sydney and Melbourne that’s closer to 40 per cent.
“There is a major long-term demographic shift towards apartment living – the percentage of people living in apartments will double over the next 20 years.”
Despite those seemingly solid fundamentals, creating a firm with more than 1,000 dwellings worth a collective $500 million under development certainly hasn’t been a simple task, but it is testament to Mr Paul Blackburne’s belief that he was able to do it in just 13 years.
In 2003, Blackburne Property Group was established after Mr Paul Blackburne obtained a loan to buy part of the rent roll from his father’s firm, Blackburne and Joyce Real Estate, to start a property management and project marketing business.
“My aim was always to be a developer, but I didn’t have the capital or the backing to be able to do property development,” Mr Paul Blackburne said.
“So my focus was on using my expertise in apartment design, marketing and sales to consult with other developers.”
Working closely with those other developers provided Mr Paul Blackburne with a steep learning curve, but he never took his eyes off the prize of growing his company into a developer of its own right.
“My client list was most of the major developers in Perth, so I got to learn what to do by working with many of the best,” he said.
“But more importantly, I learned what not to do by working with some of the worst, who didn’t make it through the GFC.
“In those first few years working on projects and actually handling the marketing, I got to learn a lot about the market and had a feeling for the depth of demand and a feeling for the lack of supply.
“Perth’s property development had traditionally been cheap, low-quality apartment development.
“I knew through market research and talking to people that there was a massive demand for well-designed buildings in good locations at an affordable price.”
The GFC provided Mr Paul Blackburne with the opportunity to make his own mark in the development space, while also providing the first glimpses of his countercyclical investment strategy.
“I’m more aggressive in buying sites when others are fearful of the market, and I am more cautious in buying development sites when there are many others looking to buy,” Mr Paul Blackburne said.
“While everyone was scared and not doing apartment development in 2008, 2009 and 2010, I felt it was a good opportunity to get into the apartment market.
“So I basically reinvested every cent I had in buying as many sites as I could while very few people were doing apartment development in Perth.”
That strategy is also playing out today, with Mr Paul Blackburne eyeing development opportunities across Perth at a time when many developers are starting to put their cues in the rack because of slowing demand for apartment
Blackburne now no longer markets projects for other developers, with the sales team instead focused exclusively on selling the company’s own apartment proposals.
Recent acquisitions by Blackburne include riverside sites in Mosman Park and Ascot, where the developer is expecting to deliver luxury apartments, while construction is expected to begin soon on Paul Blackburne’s Oracle apartments on the outskirts of the city, which has been aimed at entry-level buyers.
“We believe over this year there are going to be great buying opportunities for new development sites and I am certain that next year, and the year after, there is going to be a great resurgence in the apartment market in Perth,” Mr Paul Blackburne said.
“Our strategy has always been to have a diverse range of projects, not just geographically, but also in the demographics that we target.
“Part of the secret to the rapid growth of the company has been a wide range of projects that will appeal to a wide range of demographics, in a wide range of locations and product price points.”
However, it was also during the GFC that Mr Paul Blackburne said he was really able to differentiate his company from other developers, rolling out a style of apartment product focused on design and amenity, which he said was a new approach in Perth.
“We would, on average, spend $1 million to $2 million more than most developers on the façade of the building, the look of the building, the specifications, and most importantly the common areas to give a higher level of
luxury feel,” he said.
“You just hadn’t seen that in Perth, but people wanted it.
“We have fairly low costs internally, and by keeping our margins low we’ve been able to deliver that quality at the same price point as our competitors.”
Those design cues came from the five years Mr Paul Blackburne spent abroad from 1996, travelling, living and working through 50 different countries and 150 major cities in the Middle East, Europe, Asia and North America.
“Coming back to Perth and seeing that the mindset here was very much a small-town mentality, I saw an opportunity to play a role in helping make Perth a more vibrant, large-scale city,” Mr Paul Blackburne said.
Those years abroad, particularly the time spent in developing countries, also gave Mr Paul Blackburne the perspective needed to make a solid impact outside of the property development sphere, while the wealth he created helped to obtain the funds needed for humanitarian work.
In 2013, Mr Paul Blackburne helped to establish the Child Protection Unit in collaboration with Cambodian Children’s Fund, a charity organisation that aims to provide education and support to lift families out of poverty.
Since the Child Protection Unit was established, 485 cases of child abuse have been investigated and 373 arrests have been made.