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There was this projection of this lady, this beautiful lady sitting on a chair, playing the piano projected into the room and she looked real. I walked in there and I was mesmerised at that projection. So, I just went, oh my god, there's a lady sitting in this room playing the violin, but she wasn’t.

Episode 2

How to maximise gross realisation, play the long game and know when to say no.

Peter Chittenden | Managing Director | Colliers Residential

Peter began his career over 30 years as the founder of Realm Project Marketing Group – one of the first independent project marketing firms in Australia. Since then he has held senior management roles at Winten Property Group Stockland and subsequently Colliers International – where he is currently the National Managing Director of residential property. Throughout his career, Peter has personally sold, managed and or overseen the sales of $100B worth of real estate, created his own blog with over 4,000 subscribers and pioneered some of the property industries most innovative marketing methods.

Transcript

Anthony Denman: Peter, welcome to the Property Marketing podcast.

Peter Chittenden: Thank you, Anthony.

Anthony Denman: How did you get started in property?

Peter Chittenden: Well, having not had any direction when I left school-

Anthony Denman: What year did you leave school in?

Peter Chittenden: I left school in 1984 with a focus and competition in my mind to apply to what I wanted to do, but I didn’t know what I wanted to do, but I always knew … I used to say to my parents, “I’ll be right.” And-

Anthony Denman: Did you leave in year 10 or in year 12?

Peter Chittenden: I left in year 12. Balgowlah Boy’s High School over in the Northern Beaches.

Anthony Denman: Yeah.

Peter Chittenden: From there, I started my career as a property manager at LJ Hooker, Kings Cross. And through that experience, I met some very interesting characters.

Anthony Denman: I bet you did. I mean, the local bars were like the Star Wars bars in those days, right?

Peter Chittenden: They were indeed, the bourbon and beef steak downstairs. You buy one can of VB for $2 and get one for free on Friday afternoons. But the important part was is the interesting people I met, both public people and also the people I worked with, but it was the only LJ Hooker corporate office outside of head office which was in the city. So, I did make a lot of contacts, and there was a high expectation from the corporate office for that office to perform, and it did. I met, as I said, a lot of people, but most importantly, the diverse culture of a village around King’s Cross was just the most inspiring thing I’ve ever done.

Peter Chittenden: Everyone from the elderly to young and up and coming, the big, expensive streets, Macleay Street that are here today and Potts Point, Challis Avenue, weren’t there. They’re all down at Elizabeth Bay and Rushcutters Bay, but they certainly weren’t there as they are today. So, then I was hooked, and I just knew, and I knew the pimps, and the prostitutes, and the pub owners because they turned out of their places during the day and they’d say, “Hi.” And I’ll tell you something. My nickname was the Colt, as in the horse, the Colt, as a young kid.

Anthony Denman: I love it. So, how old were you?

Peter Chittenden: Pre-university. So, I was, what? 18, 19.

Anthony Denman: Yeah, right. The Colt of the Cross.

Peter Chittenden: Yes. So, they were like, “Hi Colt, morning Colt.” So, I’d go, “Morning, morning, morning, morning.” I worked hard. I worked five and a half days a week and then on that afternoon of the Saturday I would paint for our clients. They knew who it was, they knew it was me, paint for our clients, their studio apartments or the buildings. There’s extra money for myself, because I just lived and breathed the place. I didn’t want to go, but I also knew I had to study.

Anthony Denman: Because you were from Northern Beaches, so were you living in the cross or were you still living in the-

Peter Chittenden: I had a Subaru surf wagon that I drove every day from Manly to Kings Cross and back.

Anthony Denman: It wouldn’t have taken that long in those days.

Peter Chittenden: Well Militray Road was still Military Road.

Anthony Denman: Well, there was no tunnel I guess too, right?

Peter Chittenden: No, there wasn’t a tunnel. So, I just knew that this is exactly what I wanted to do and I was actually … there’s a photo of me with my wings spread, standing in Bruce Beresford’s, the actor’s … no, director, apartment facing back to the city. Someone took this photo of me.

Anthony Denman: Do you still have it?

Peter Chittenden: No, I wish I did, but I lost it. Going, “I want this. This is for me, I want it.” It was just the classic picture of me just going, yep. I was 19. It wasn’t-

Anthony Denman: Property management.

Peter Chittenden: Yeah and sales, I got into sales with the guys there too, but it wasn’t about the money. I just want to be clear early in this. This wasn’t about for me the career earning lots of money. I just couldn’t get enough of the experience of building stuff and creating stuff and working with people that did interesting things. Just do it and the money will follow hopefully, but if not, I’ll live a very good life and I’ll meet crazy, mental and successful people and that founded me.

Anthony Denman: Wow, that’s amazing. That is our space, isn’t it? Like the areas-

Peter Chittenden: Yes, I met you. I think I met you in 1994, didn’t I? ADS. ADS, down in Double Bay.

Anthony Denman: We did. We did the project in Wylde Street.

Peter Chittenden: No, but before that we did Cascade in Bellevue Hill.

Anthony Denman: with Dr Quek.

Peter Chittenden: We did, yes.

Anthony Denman: So, how did you go from there to own your own-

Peter Chittenden: I was – the bigger journey, I went to Hawkesbury ag College, which later became University of Western Sydney Hawkesbury. The reason why I did that is, I realized to be a true professional, you need to have theoretical talent as well and experience and because I’d failed my HSC, I went to TAFE University and I recommend this to anybody today that if you don’t get into university or don’t get what you want to do, don’t go to university just to get into university and do something you may not like. You’re better off having world experiences which I was lucky enough to achieve. So, I did my salesman certificate for a year, then the next year to get into valuation diploma and then used that successfully to get into Hawkesbury ag College and that was three years full time. So, it took me out of the market.

Anthony Denman: How did you survive?

Peter Chittenden: Well, fortunately, my time at LJ Hooker was making me good money back then and if I can tell you a little bit of a joke, I was earning $45000 a year and I was a very wealthy man at that point in time as a 19 year old. That was a lot of money. Then I went and studied for three years at university, came out and became a property valuer for Jones Lang Wootton at the time at Paramatta, earning $16000 a year.

Anthony Denman: Right.

Peter Chittenden: So, I repeat, I had three years, a degree and three years of experience. I had one third of my salary and my secretary who was 17 years of age or the group secretary, she was on 20 grand a year with no qualifications. So, it wasn’t about the money, but it was about the experience.

Anthony Denman: Also, I guess playing the long game, right?

Peter Chittenden: Yeah, that’s right. The valuation I needed just to give me technical advice around putting together feasibilities and understanding the plan of which all the ingredients must come together to get the outcome and without the valuation theory and practice and valuing for other people and seeing it, I wasn’t able to deliver on that part which is an essential part of project marketing today and last year and going forward.

Anthony Denman: So, at what point did you kind of go, LJ Hooker property management selling existing real estate and say to yourself, this project marketing aspect of real estate is kind of where I want to be and-

Peter Chittenden: Yeah, I think so. I mean, it was a bigger level. I’ve got this saying, everything eventually turns to residential. So, I thought to myself, well, what else can turn to residential that’s already not that or what can we get more out of? I knew that selling mums and dads houses, which there’s nothing wrong with that and they’re very successful people who do that as well, was not going to be enough for me. I wanted to look at big land passes or see where suburban areas were going to grow or brownfield areas, which are like a house that turns into a tower of residential. I wanted to be part of that and I wanted to experience the interior designs, the architectural flare.

Anthony Denman: Yeah. As opposed to the cut and thrust of a deal, you’re more interested in I guess the overall strategy and planing of putting together something which is greater than the sum of the parts.

Peter Chittenden: Yeah, and other people have borrowed this or I stole it. I’m not sure, but to come into a city in the air or on the road and just see stuff that I was deeply part of, I just sit there and go, hey-

Anthony Denman: That’s inspiring.

Peter Chittenden: Yeah. I like that. That was really my goal and I must say, as I said too in the introduction, the interesting people I have met through this journey is just priceless.

Anthony Denman: Can I ask, with that transformation of current state of being something, like physical and turning it into something else, how do you reconcile that? I mean, do you feel like you can make the world a better place through that process?

Peter Chittenden: Well, no, not really. I mean, my friends who I surf with throw away … Chitto’s out there killing Koalas, that’s when I used to do a lot of land, but that I have not done and will never do that because I love those cuddly things. No, on a serious note-

Anthony Denman: There is a realization around sustainability-

Peter Chittenden: Yeah, there is.

Anthony Denman: … and the planet earth. Sorry, you’ve got the spiritual Denman coming out. That happens.

Peter Chittenden: It’d certainly be false of me to assume that that’s an area that I’m contributing on, but I think that I do like good outcomes and the fact of the matter is, the population is growing, whether that’s good or bad, it is and we need to provide good housing for these people and we live in a great country that can do that. So, the fact that that requirement is there and I can be part of that. I don’t take it at all that I’m doing some good environmental thing for anybody because in all honesty, it’d be hard to match the two together.

Anthony Denman: What about improving the way communities exist within the fabric of society?

Peter Chittenden: Yeah, look, I mean, I’ve given views on that and participated on a lot of that sort of stuff, but I don’t really have owned that space. I get consulted on it and what should happen. Decisions get made, I’m sure with some of the contributions I’ve made on those things, but ultimately that is where the developer and the team, the greater team come up with. They set the objective where they want to be and what they want to do.

Anthony Denman: Are you excited by that? Do you get inspired by that? Do you feel like … do you win listings?

Peter Chittenden: Yeah.

Anthony Denman: Like getting inspired and involved in that process and-

Peter Chittenden: Yeah. It’s a relationship. These projects go for longer than some weddings, some marriages. They just do.

Anthony Denman: What’s the longest project you’ve ever been involved?

Peter Chittenden: Well, there’s two types. The land ones are generally longer. So, we’re working on an Ingham one … Ingham, as in Ingham Chickens and that’s down at Freemans Ridge, Hockson Park, that’s been going since 2005. 90 things to go.

Anthony Denman: 2005. We’re in 2019.

Peter Chittenden: I did my first paper on that in 2005 to design it up into the mix.

Anthony Denman: 14 years in and still going strong.

Peter Chittenden: Yep. Strong stamina, you need it.

Anthony Denman: How do you maintain your passion for a project like that for such a long period?

Peter Chittenden: Well, it’s about, again, the relationship piece, understanding the evolution of the market and being willing to be a high participant. So, the relationship I’ve got with Michael Parkinson, who actually I met at Jones Lang Wootton when I was a valuer back in … that’s how long I’ve kept that relationship with him for, and he didn’t discriminate to give that job to me or anything else, I had to earn it, but he needed it to be earned, because the right person needed to be in the right seat. So, that relationship’s strong. We try and evolve the product. We try and increase the value for the owners that we sell to in each stage and that’s happened. So, all those key goals and hurdles that we’d aimed for. There’s a number of long apartments buildings. I did the Forum up at St Leonards which is 779 apartments in two buildings. That was probably six or seven years, and then there’s more recently York and George with Fife Capital on George Street which we launched in November 2013 and only recently six months ago settled it in late 2018, early 2019. So, it was another six years. So, you’ve got to stay on top of it and you’ve got to be interested and you’ve got to participate like any, as I said, marriage, you’ve got to be there and reinvent the process.

Anthony Denman: Have you had any marriage break downs?

Peter Chittenden: Yep. Without naming any names. None of them are life affecting or whatever I’m trying to say, but there are times when you agree to disagree and what I tend to find is those moments tend to happen for two reasons. One is we either come into the project too late, that is, say, three months out from launch where we haven’t participated in the creation of that and-

Anthony Denman: So, when should you get involved in a project?

Peter Chittenden: The ultimate goal is pre-purchase. So, we help them buy it. When someone buys something, they buy it with an end view. They buy it with the profit in mind to get the profit, you’ve sold everything. To sell everything, you’ve designed it well, you’ve built it well, you bought the right place, la la la. So, when we go into that, we tend to find, because we invest one, two, maybe three years in some instances, in advance before we launch these things, that’s why people say how’d you get that job? Well, three years ago we were onboard and helped them buy it all. We didn’t help them buy it, but … we weren’t selling it to them, but we were helping them get their numbers up. So, that’s the preferred time. In strong markets, if you get in six months before or three months before, that’s fine too, but you’ve got to have that fast market running well. So, the best time is early.

Anthony Denman: What other reasons might a relationship might not stand the test of time.

Peter Chittenden: Oh, and the staff changes. So, with the corporates and the CEOs change and people change, for that matter, my staff change and relationships like, as I mentioned before, they need to be solid and get through hard times. So, if the staff do change and they say, well, I know someone. It’s just like anything. That’s the commercial world.

Anthony Denman: Yeah, absolutely. So, coming back to realm project marketing and your own company, then moving into corporate environment, I guess it helps that you were in a corporate environment and had your own thing back into a corporate environment. What was the reason? I mean, did you prefer working for yourself or what was the reason why you decided to rejoin the corporate environment?

Peter Chittenden: Look, I really enjoyed realm. That was an amazing experience and my learning curve was very steep and for that reason was part of the reasons why it didn’t survive. I wish it did in some respects, but I’m glad it didn’t.

Anthony Denman: So, it didn’t survive-

Peter Chittenden: No, I shut it down.

Anthony Denman: Right, okay.

Peter Chittenden: And went across to Stockland, they sort of bought me and bought the team, amalgamated into their project marketing thing. But, I really enjoyed … we got to know Sunland and we were very successful with them, very successful with Winton. Babcock Brown at the time were around and we were doing a lot of work with them. So, they were great experiences, but on the serious side of life is you’ve got people with mortgages, employees, you’ve got photocopiers, you’ve got rent, you’ve got all this stuff that you’ve just got to keep turning up every week. You’ve got taxes everywhere, accounts. There’s a lot of work in that. When you’re the bread winner, the creator, the owner, the founder-

Anthony Denman: So, you’re the only founder?

Peter Chittenden: Yeah. So, it was full on and it was consuming me into places where I didn’t want to be. I wanted to be in the project side. So, then I went across to Stockland for that reason, but I must say there was pros and cons there as well, but the biggest pros were getting a national connection and getting involved with a whole bunch of other technical people, but the downside is is a residential development needs to be nimble and some of those big machines like lend Lease and Mirvac and Stockland for that matter, they’re great companies, they’re awesome companies and I love working with them, but they would admit that their biggest weakness is moving this big machine quickly, because they’re competing against high net worths or small private corporates that can just go, yes, it’s my cheque book, like Walker’s for instance, he’s the cheque book, he’s the direction guy and ultimately, that’s where it stops and he could make that decision in 30 seconds without a board. So, that was the only thing.

Anthony Denman: So, how were you able to then bring that agility into Collier’s?

Peter Chittenden: Well-

Anthony Denman: I’m assuming you have, right? Because you’ve been incredibly successful in this role and I doubt you’d be talking with as much passion about a particular subject if you weren’t able to achieve that in your current circumstances.

Peter Chittenden: Yep. Well, I’d had the benefit of really participating in the market for 20 years. I think I had a reputation which was one of a can do, but yet to be tested as anyone is. So, I was very passionate in packaging up the business, having the right members in the seat. At the time a few adjustments had to be made which they weren’t pleasant, but things need to have happened and I had to create a competitive environment for the development fraternity in Sydney in particular, we were already established in Victoria, but to give them choice and I kind of found that was my responsibility for some reason. I said, there’s an existing firm there at the moment who are dominating and that’s impossible, that’s poor business and the market needs choice to keep them on their toes and also us. So, I said to myself, I want half. I want half that market share at least to say this is our culture, this is their culture and who we’re all going to be and it’s taken ten years, well, probably took six to really get some traction.

Anthony Denman: So, yeah. So, in hindsight, having your own independent office, realizing the value of agility and then going to an environment where you didn’t have that and have seen a vision where you could combine the two-

Peter Chittenden: Yeah. So, the corporate side was really … and then the nimbleness and put that together. So, we sort of say we map our way we structure and deliver our plans and procedures and reporting on a corporate level or an institutional level like what Stockland would like to send up to their board or Lendlease or whatever. But, we also give it to people who, what we say, don’t want it, which are private and high net, don’t worry mate, we don’t need that … no, no, no. That’s the service we provide as a minimum. That’s just our minimum, and then the extras, we can talk about, but we have a minimum standard which is quite high and the market responded to it.

Anthony Denman: You say the market responded to it. So, Peter Chittenden walks into list a 100 million dollar project in a particular suburb, wherever it may be, and he is the managing director of Realm project marketing, the same Peter Chittenden walks in and he’s the managing director of Collier’s International, what is the value in that, in that brand and that corporate identity that’s been established? How does that … I’m assuming it makes the job of listing a property a lot easier.

Peter Chittenden: Oh, without doubt. I mean, anyone who thinks they’re bigger than everybody else is just so … they just show their massive sign of weakness. For me, I’m part of the Collier’s team. I might happen to have a role called leadership, but I know that standing next to the Collier’s brand and being part of that gives the marketplace what they are looking for and they look for different things. They look for introductions to other parts of the business, they look for site opportunities, they look for introductions to money or debt or project management or industrial or just a whole world of connection and idea and part of our marketing machine and things that Realm could not provide. Now, the guys at Realm which I was one, could provide a really good project marketing service, but I couldn’t offer all the other pieces that were involved and have a platform.

Peter Chittenden: So, having something with Collier’s and all the other investments and things that go on in this company, to the benefit of our clients, we can just roll out quickly and it’s on the shelf and that’s the strength of the scale of what that is. But, in fairness, our residential team had to convince and like any other product line, continually needs to convince the Collier’s team to back residential because fundamentally, people think companies like ours is commercial or industrial or not resi. But, Collier’s International for the last 40 years has said we back resi, we love residential and that for me has also helped us and the company investing. When I need to take risks, our guys would just go, yep, it makes sense, let’s do that.

Anthony Denman: So, what about then … I can see that … I’m sure the corporate brand in that context. What about consumers? Like buyers of apartments, is there any value in the Collier’s International brand being attached to a project from a consumer perspective?

Peter Chittenden: I would say yes. The reason why is because there’s many pieces of the development puzzle and our role is assisting with the marketing. Our agency’s the marketing company in this instance, but our core role and where we get paid is when we sell. So, we’re that part and if we don’t have experience there, number one, the developer won’t choose us but more importantly, the buyer says, well, hang on, I know that these guys are trained, they’re professional and they’re obviously selected by this big developer or historical … the whole team is because of the experience and what they’ve got. So, it’s a tick, tick, tick with Collier’s. If it’s a small brand of no relevance, then it’s got no relevance and Realm project marketing during it’s three years, it was just starting to come out of the ground, but it probably … a lot of brands in this space need ten years before they really go, that’s someone I need to absolutely talk to, whether I know them or not. I’ve just got to give them a call and put them in the mix for the opportunity and that’s what Collier’s has done and also too, people come to Collier’s and go, I know Collier’s, I feel comfortable, so it’s a warmer lead when they walk in.

Anthony Denman: Yeah, okay. So, I guess they trust in the process, right?

Peter Chittenden: Yep.

Anthony Denman: They trust in the site acquisition and they trust in the delivery, they trust in the pricing, they trust in the transparency of the sales process, which we’ll talk about later on. So, there is a level of trust there.

Peter Chittenden: Yeah, and I think too, Anthony, is people make mistakes. We make mistakes. But, we can’t make mistakes and go, who cares? We’ve got a brand to protect. So, what the buyer knows is, when we, if we make a mistake, we’re going to do something about it and that’s the key. That’s what they want to know is that if that moment happens, which doesn’t happen very often-

Anthony Denman: Can you think of a mistake or a mistake that-

Peter Chittenden: When the market was really hot, we were getting a deposit here, a deposit there and a deposit everywhere and sometimes when you’ve got all these agents … at our peak we had 26 project marketing sales people in our company just in Sydney alone and when people were buying things, depositing or trying to register their … there would be sometimes multiple purchases on one.

Anthony Denman: Right. How do you handle that?

Peter Chittenden: How do you handle that? Because our brand protects … we say we don’t increase the price, we don’t do that. So, that’s not a … so, we’ve somehow got to work out who went first. So, hopefully our disciplines and in our process does distinguish that. If we can’t do that, we will come up with a way to make people happy the best we can. But if there’s only one apartment, there’s only one apartment, we’ve got to do something else. But, that is a mistake that has occurred before.

Anthony Denman: Can you remember your first major off the plan project? Significant in terms of community participation and celebration or design intent or location.

Peter Chittenden: Well, look, probably the first two. I mean, I used to do a lot of … I didn’t mention the acquisitions of land, I did that for five years as well with a company called Wimpy out of England.

Anthony Denman: Right.

Peter Chittenden: Forgot about them. Sorry. They became Ardell. But, I used to buy all that land together and package all that up. But, in terms of project marketing, probably the two that really took me to a whole new level was Hopetoun Quays at Birchgrove with Dr. Quek.

Anthony Denman: With Dr. Quek Yeah.

Peter Chittenden: And Regency Hyde Park, 285 Elizabeth Street in the city. They were the first two and we were just finishing off Greencliff which wasn’t that much to do with me and Craiglea, over in Kirribilli at the time. They were … obviously the Colonnades was in Milsons Point at the same time as well. That was interesting in that there was a design DA change and we had to basically take all the purchases out and because the DA didn’t get approved, it got approved and then someone argued against it and they won the case. So, yeah, that was another great learning experience of how to deal with unhappy people. That took a year to clean that up and make everyone happy.

Anthony Denman: So, how do you feel about selling off the plan without DA approval?

Peter Chittenden: Well, I’d highly recommend you don’t do that. I mean, look, you have to be-

Anthony Denman: Archibald.

Peter Chittenden: Yes. Oh, we did. Yes. But that was in a good market and I must say, done by professionals who actually knew that it was a 99% probability, 1% not and the 1% it did happen. We’re now off and running, under construction, so all good news, sold really well. But, that 1% just meant it took another nine months to get it done.

Anthony Denman: Right, okay. But, it was good to get it done while the market was still good, right?

Peter Chittenden: Yeah, and with the benefit of hindsight, yeah, all the choices were the right ones to really rip in and yeah, when the market was there. But, there’s been I think some resales in what I call worst market conditions and they’ve all made money.

Anthony Denman: They have?

Peter Chittenden: Yeah.

Anthony Denman: Great. That’s good to know.

Peter Chittenden: Yeah.

Anthony Denman: Most successful project. Again, successful doesn’t have to be you sold out in five minutes and made a zillion dollars. Successful might be, wow, we really changed the way people think about living a particular way in that location or just I had a really good feeling about that project, it made me feel better than that result than anything else I’ve done.

Peter Chittenden: Yeah. I’ll use a couple of current day ones because I’m probably forgetting some of the projects I used to work on. Not forgetting, but just need my memory jogged. But, I suppose there’s two, if I may. One is I found a guy who owned a site in North Sydney and he had a reputation being quite a tough, angry sort of person and I kept going to his door for six months going, got to knock on it, got to, got to. But I couldn’t. Then eventually I did. He was a lovely guy.

Anthony Denman: Do you mean like physically knock on the door?

Peter Chittenden: Yeah, physically, old school. Yeah, no old school. Yeah, his office door. And he was going to develop the site and I looked at the design and I thought it was compromising every form and fashion, but in fairness to him, he compromised to get his approval because he fought for … well, challenged North Sydney council for five years to get approved and finally got it approved. Anyway, in the end, he wanted to … he decided he mightn’t want to go ahead with it and I had the opportunity to go off market and sell it. I ran around town, ran around town, ran around town. No one wanted it except Gary Rothwall from Winton Property Group and I sat with Gary in a coffee shop because his staff didn’t really want him to buy it either, but long story short, he bought it, and then bought the neighbor and now there’s 196 units there, the project’s called Belvedere, it sits on the landscape and as I drive to work everyday, I look at it and go, nice.

Anthony Denman: There you go.

Peter Chittenden: That to me was-

Anthony Denman: Good story.

Peter Chittenden: … getting Gary back into the property part of the market and he became property man of the year the next year through the UDIA. We sold to Franz, it actually put Collier’s on the map of getting the first big building in it’s new generation which under my guidance. So, that’s what I do. So, I drive past that every day.

Anthony Denman: That’s awesome.

Peter Chittenden: There you go.

Anthony Denman: That’s awesome. I think. What about on the other scale? What about on the other end of that scale? Like the biggest failure or the … I mean, if there was one that comes to mind or a project that just tanked or that you didn’t feel good about.

Peter Chittenden: Well, whilst there are some of those, I’d prefer not to mention them and identify them because there’s people involved-

Anthony Denman: Fair enough.

Peter Chittenden: … and that becomes a bigger issue.

Anthony Denman: Are there circumstances around?

Peter Chittenden: Yeah, there are. Generally, what tends to happen is when we know what’s wrong and for some reason, we allow ourselves to get involved in something that we know is … and we’re not perfect, but we get ourselves involved in something we actually know is wrong, not kind of think it might be stretched, but it is wrong. Wrong in price or wrong in design, doesn’t meet the market and you just keep walking down that isle. So, lesson learnt. By the time we get to the end of it, you realize it’s a dead end, it was the wrong decision, you wasted all this time and everyone’s upset with themselves.

Anthony Denman: What are the warning signs for something like that?

Peter Chittenden: Oh, when you’re arguing early, discussing … agreeing to disagree, if you want to call it more politically correct, of the mix and the sizes and the price points, it’s generally that simple. Right. You know it’s not going to work. There’s actually a project that’s come back my way that I said no to three years ago and it’s still a no, but they put another team on it, and they didn’t sell an apartment because it was wrong. But, in fairness to that group, they were a growing business, they just wanted to take what they could. That’s a mistake and that’s not being responsible to the industry. You’ve got to say I just don’t need the money, I need a really good job that’s going to be successful.

Anthony Denman: Yeah, because you spend a lot of time on these things, don’t you?

Peter Chittenden: Yeah. Because there ends up being no money and everyone … you lose staff and all that.

Anthony Denman: I want to talk to you about the line, I guess the … when things are really good, and there’s a line of people kind of queuing out the door, and that FOMO, that fear of missing out is all around you. You mentioned earlier that there are some challenges in regards to dealing with that, managing that process. How do you kind of extract the highest GR in an environment like that?

Peter Chittenden: You’ve got to really understand the market and you’ve got to be right in the detail of what the motivations are of the individuals and how many there are and you’ve got to … it’s like a puzzle. It’s a jigsaw puzzle essentially. So, let’s say there’s 100 apartments and you’ve got 150 interested people. Most of them have got their $5000 refundable deposit down, but some of them are going, no, I’m not going to do it, but I still expect the same service. You’ve got to start categorizing them and you’ve got to categorize them in that you give them an absolute clarity on what the expectation is to purchase and if someone chooses not to do something within a timeframe, then you’ve got to let them out. Then, when we map the buyers through the building and make sure the whole building is covered, then we get the opportunity to say who else is in there and what else can happen? And to make sure we maximize-

Anthony Denman: How do you-

Peter Chittenden: … the GR. We know what the prices are. When you say maximize the GR, there’s an estimated gross realization, that’s what GR stands for.

Anthony Denman: Thank you.

Peter Chittenden: Gross realization. They might bite on say let’s say 100 million over those hundred units and then we might get it up to 105 or something like that through the process, but some of that might get taken up in construction costs or design blowouts or whatever that might be in the end. But, that’s the maximum GR. That doesn’t mean the developer walks away and buys a boat. It just means they walk away with a profit which is the reason why they’re in it.

Anthony Denman: I think that idea, that analogy of a puzzle is really interesting. I think it would be for most people. I mean, if you got one building with 20% of the apartments are the most attractive, how do you get people interested in all the other ones which aren’t so attractive?

Peter Chittenden: Yep. Well, you’ve got to have-

Anthony Denman: Because, I mean, they all come in, they all want the 20%.

Peter Chittenden: Yep.

Anthony Denman: Right. Okay. Well, the 20% are full now, how do you redirect that?

Peter Chittenden: Well, ultimately, the final lever is price. So, the best, with the best view, the best parking, and best size and whatever best, best, best, best.

Anthony Denman: They’re filtered through price.

Peter Chittenden: Yeah. Well, yes and no. And price point and affordability. I might just want to be an investor as an example, an investor in an owner occupied building and pay let’s say making up, a million dollars for one bedroom because I know it’s owner occupied and the owner occupieds don’t want a one bedroom, so I just wedge in but that one bedroom’s got no views. I’ve got to find the buyer who matches what that is.

Anthony Denman: Right, okay. That just happens through conversations?

Peter Chittenden: Yeah. So, the best sales people who work for me and who are still there for eight years, are the ones that really get to know the buyer and what they’re really looking for. That’s not to take advantage of them, that’s to make sure they put the nut in the bolt and screw it together and everyone’s happy. But, in a sales process of-

Anthony Denman: Can teach sales people that or is it-

Peter Chittenden: You can. People say to me, you can’t take a residential real estate agent into project marketing. That I disagree with. One of my most successful sales people did exactly that who I actually met on the train tracks in London, 1988 when we were backpacking. He’s still friends with me today and that’s part of the relationship piece, but that’s a bit of a sideline. But, you can do that, but it’s ultimately understanding the product, doing the research and then just really getting to know the individual and then what ends up happening is that individual owes that experience so much they tend to make money and then they go and buy another one from them and they’re already walking in, tell me Peter, which is the next one. I’ve got people who come to me and go, just tell me which one I buy next. And I go, no, doesn’t work that way. You still need to do your research, I still need you to look at this stuff and make sure you’re happy and bringing in any stakeholders and all that sort of stuff.

Anthony Denman: So, what is the difference between general agencies on a domestic mums and dads real estate selling and project marketing? I mean, are they even remotely the same?

Peter Chittenden: Well, they are the same in that they’re residential and they’re homes, but there is a difference and I’m not saying one’s better than the other, but who knows, I might be. Jokes. So, I sort of look at house sales. The sale is actually the list in reverse.

Anthony Denman: Yeah, the listing, right? They’re not selling

Peter Chittenden: When they can sell themselves and their service, they actually list. The house then does most of the work in terms of the inquiry and the interest level. Sure, there’s a skill in closing, I’m not taking that. Yeah, a little bit, but not really.

Anthony Denman: Conditioning.

Peter Chittenden: Conditioning. So, you list them and condition them and the buyer will do whatever it’s going to do, but I’m generalizing, yes, because you can’t say that’s a bathroom and there’s a bathroom there, right? We know that. There’s a kitchen. With off the plan things, projects, we’ve got to be able to align with the thought process and the vision of all the other members, the architect, the money, being the person who owns the company or the financier and see the vision and where it wants to be. We have to pitch to the vision and make sure we’re part of that team and belong in that what we’ll call the bus of that project and then we’ve got to be able to work with the marketing company like yours, and develop up that beauty and be able to illustrate it where people could see it and feel it and then buy into that vision and dream and we’ve got to convince them to take a risk of something they can’t touch.

Anthony Denman: What is the most important element in the marketing mix for you to deliver on that dream?

Peter Chittenden: Of the material you mean?

Anthony Denman: Yeah.

Peter Chittenden: Yeah.

Anthony Denman: Is it a logo? A brand?

Peter Chittenden: No. I would say not. I mean, they’re relevant. Each of the pieces contribute, but where the brand comes in and the logo and things-

Anthony Denman: Just being careful with how we use the word brand. I mean, it’s more holistic than just a logo.

Peter Chittenden: No. I know that.

Anthony Denman: Brand identity.

Peter Chittenden: The project we did with you … Archibald I mean, I loved it, right? It was awesome. Congratulations. We were pleased to work with you on it, but-

Anthony Denman: Yeah, Sydney Design Awards Gold Winner in branded experience.

Peter Chittenden: Awesome. Yeah, I know. That doesn’t happen to many advertising companies or marketing companies I can tell you that. But, what that did was, as I said, I really liked it, but what I said to my team was, it’s not for us to decide if we like it or not, but hell, I know everyone’s going to have a view on it and that’s ultimately what we need. So, it had to grab the attention. So, that’s the first example in a long time and it was a risk, right? We didn’t know that everyone was going to like it, but holy moly, people looked at it and I just saw it again today actually and I had a fun laugh at it, because it was a very successful campaign, it was amazing, but it still does it for me. Right? Because it was high risk, but high rewarding. So, that’s very valuable. But, once that’s done it’s job, tick, beauty, then you’ve got to go into … and to answer your question, the CGIs, the computer generated images are … the technology is improving every day. They’re critical. The model’s critical and the display suite is, if you can have one, is critical.

Anthony Denman: Okay.

Peter Chittenden: Where the display suite really comes into it’s own, it enables the builder to test design and interior designer to see that their vision works.

Anthony Denman: You mean like to actually build a physical-

Peter Chittenden: To actually build it, yeah.

Anthony Denman: … bathroom, kitchen.

Peter Chittenden: They get the trades in if we have the luxury of the time. They do the work on it so they can see what the expectation is.

Anthony Denman: That’s really interesting. I never really imagined that that would be such an important and vital role in the delivery of a project. A bit of a serial investor yourself in terms of you brought in a lot of the projects that you got done.

Peter Chittenden: Yep.

Anthony Denman: What is it that you look for when you’re investing in a project that you’re working on?

Peter Chittenden: I’ve always got a saying for something. This developer guy who I really respect out of Canberra, he used to say to me, Peter, if I just bought a one bedroom in every apartment project that I looked at, I’d be a wealthier man today rather than taking risk on development. I thought, you know what? I don’t know if that’s true or not, but I like it, so I’m going to stick with it. So, generally what I like doing is looking in as I mentioned earlier, what I’ll call an owner occupied building which, what’s that these days? It’s just a quality building, generally not high rise, where owner occupiers downsized … it gets looked after. So, you get a one bedroom in that and you pay a decent price, you’ll pay more than you want to from the cheap everyday type stock-

Anthony Denman: You have that insight though, don’t you? You know through the way in which you manage your sales people and their interrogation for want of a better word, process that buyers are there for the right reasons?

Peter Chittenden: Yeah. Exactly.

Anthony Denman: So, when you start to detect that, is that when you make your decision?

Peter Chittenden: No. Well, being part of the vision team-

Anthony Denman: You would already know that.

Peter Chittenden: … we could see that coming.

Anthony Denman: In advance.

Peter Chittenden: Yeah.

Anthony Denman: Okay. So, you’re laying down well.

Peter Chittenden: Yeah. Look, I’ll say that it does influence other people to participate in which is a high level responsibility. So, I do say to people, if you’re going to jump in and get involved and take the risk, you need to bring all your stakeholders involved but have a five year plan. The five year plan is a compulsory part. So, don’t come to me and say, I want to sell this in two years, where’s my profit? Because that’s not what I want people to do. Property is a medium term bet or investment or decision and that’s what it needs to be. So, five years is really what I tell … they can do what ever they like, but I just say that will nearly not guarantee you, but as close to a good outcome.

Anthony Denman: In ten years it’d be better.

Peter Chittenden: Yeah.

Anthony Denman: When you’re meeting with a developer, you were talking before about contributing to the final outcome in terms of the mix and the use and the ground plain and the amenity. Do you have much influence in that regard or is it you mostly shouted down by the architect and the-

Peter Chittenden: No. Sorry. The answer is yes we do. No, we don’t get shouted down by the people we generally work with, because they want to hear another opinion. They obviously choose us because they know we’ve got experience. So, our opinion has value. But, we don’t always get our preferred outcome because money could be or budgetary requirements or other council restrictions or planning restrictions or something along those lines, but we’re influential in that package, there’s no doubt about it.

Anthony Denman: It sounds like you have to be.

Peter Chittenden: Yeah, we do.

Anthony Denman: Especially if you’re kind of going to commit all those resources to a final outcome and be confident that it’s going to work for you.

Peter Chittenden: Yeah. We’ve got to be able to see through the eyes of a purchaser early to say, why would they get involved in this? Why would they buy that? Again, because we sometimes buy in these projects, we’re putting our money where our mouth is.

Anthony Denman: Certainly one of the first agents to I think embrace the new digital marketing landscape just in terms of building your own profile even.

Peter Chittenden: Yep.

Anthony Denman: I guess it was a lot easier in the day when you put an ad in the Sydney Morning Herald.

Peter Chittenden: Yep, and the Wentworth Courier and the Manly Daily.

Anthony Denman: Well, even just the Sydney Morning Herald.

Peter Chittenden: I know, getting the space. My god they were competitive. I remember when, I’ll go back a bit of time, when I got knocked on the door by this company called realstate.com and I’m like, really?

Anthony Denman: Sure, no, I don’t want shares in those sort of things.

Peter Chittenden: Yeah, I know. Too funny. But anyway. But, in fairness, to be early, you’ve got to take risks and it did take a while to run an ad on that, because it didn’t have it’s audience, but compliments to those guys and they saw it and look at it now. It’s ridiculous.

Anthony Denman: Yeah. I mean, it’s all … the enquiry mostly now.

Peter Chittenden: Yeah, 100%.

Anthony Denman: Yeah. it’s social, right? Social channels now getting really strong. The numbers were up, but the conversion rate was down, but even now the conversion rate is quite high through social and audience extensions.

Peter Chittenden: Yeah, and that’s improving, right? So, you get people who, like us, we’re all aging and we go, ah, no, that’s not what you do, but unfortunately or fortunately, you need to invest in all sorts of medias all the time, but what we do know whether we like it or not, and I actually prefer … I quite like, I really like print ads as well, but that could be my old school vision, but without social media, without the digital displacement of promotion or lead generating activities, there’s no way you’re going to get through it. You need to do it because the consumer of ads or whatever they might be, they’re now … that’s all they’ve ever known.

Anthony Denman: Yeah, online, right?

Peter Chittenden: That’s all they’ve ever known.

Anthony Denman: Everyone’s on their phone all the time.

Peter Chittenden: Yep. That’s all they’ve ever known. So, they go, if it’s not there, they don’t see it. So, why would you go anywhere else?

Anthony Denman: I guess the next curve in terms of digital innovation and marketing methods, do you have any thoughts on that one?

Peter Chittenden: I do, believe it or not. I’ve only been to New York once and when I was in New York, I saw one thing, I learnt two things. One is Australia does this really, really well. Our marketing, our off the plan sales, I don’t think there’s any other place that does it any better than us at all. It’s amazing what we produce here. But, the other thing I want to say is, I saw one thing. I call it the Princess Leia moment. There was this projection of this lady, this beautiful lady sitting on a chair, playing the piano projected into the room and she looked real. I walked in there and I was mesmerized at that projection. So, I just went, oh my god, there’s a lady sitting in this room playing the violin, but she wasn’t. It was all just where that R2-D2 projected Princess Leia in Star Wars sitting there.

Anthony Denman: Right.

Peter Chittenden: That’s why I call it the Princess Leia moment because there it was and I just went, oh my god. So, I thought to myself, imagine if that was a building. So, you’ve got the virtual reality thing or you’ve got all that space, some of it you can share, but you need to be able to share that and that projection that I saw, you could build a whole building, you could have popups, you could export it, you could put it anywhere and whilst that’s got to be incredibly expensive, and I don’t know where the technology is, but I was blown away because all of a sudden I walked in, that was my greeting moment, went through it all and was like, oh my god and then she disappeared into the process I went.

Anthony Denman: Wow, that’s really interesting. Thanks for that. Thanks for sharing that. Yeah, I’d imagine it’s probably cost prohibitive for most developers at this stage, but the thing with technology right?

Peter Chittenden: Gets cheaper.

Anthony Denman: That photo realistic real estate animation was cost prohibitive 10 years ago.

Peter Chittenden: As a funny side of things, it might save you going on a holiday. You could just project yourself over there and have a little holiday and come back.

Anthony Denman: Give that a whirl, see how that works out.

Peter Chittenden: Put myself inside of a barrel and then come out. That’s a surfing barrel wave barrel.

Anthony Denman: Ah, thanks for that. I was thinking wine barrel.

Peter Chittenden: Fair enough.

Anthony Denman: Either one. All right. So, onto topical, a few issues with cladding and buildings having cracks in them and so on and so forth at the moment, it probably makes this question even more relevant and that is, how important is a developer’s corporate brand to getting a deal done?

Peter Chittenden: Oh, it’s incredibly important. I mean, the brand’s the brand, but what’s behind the brand? Like I said with the sales in Collier’s, it’s what you do if the problem occurs. So, again, something man made has a risk of having a problem with it. Technology changes, structures change and we’re just constantly evolving. So, really unfortunate timing of all this what’s gone on, but I’m really pleased it has because we can’t run away from the fact is if there’s areas that we need to improve on, then we have to do that. But, it’s what are we doing about where the problems have occurred and we need to make sure responsibility doesn’t get pointed in all these other directions. Someone gets up and owns it, fixes it, fixes the people and we move on. That will strengthen the trust and loyalty of the customer who has always been the most important person in the room, because at the end of the day, when the population increases, there’s no more land, we’re not making more of it, so we’re going to go up. So, more and more people over the years are going to live in apartment buildings and so, we need to make sure this industry recognizes that and does something about it.

Peter Chittenden: So, when it comes to the cladding designs and all these sort of things, I’m not an expert at that, but we need to say, right, that’s a problem, we need to pour that out and now we’ve got to know that next time new material gets created or introduced, we need to have it absolutely tested and from the developer’s brand point of view, sometimes we just take that for granted. Here’s XYZ and here’s their history and a few things they’ve done here or elsewhere, we need to actually do more than that now. I think we need to sit down and do throws and shows on here’s all these examples of greatness that I’ve done and earned my right to sell you something and you trust me with your money to buy. That’s what they’ve got to do and the development industry, when markets increase, we get new entrances that we never see again, right? They popup, people with money, I won’t do this and do that and people can get good outcomes for that, I’m not saying they don’t, but the risk does go up a little bit because they can dissolve a brand, because there’s not enough behind it. You need things behind it.

Anthony Denman: So, longstanding longevity, trust, earning the right. I really love that.

Peter Chittenden: Yeah.

Anthony Denman: Earning the right to offer you a place to spend what essentially is the largest amount of money you’re most likely to ever spend in your life.

Peter Chittenden: Yeah, and there’s a lot of money in property development. Let’s not deny that. There’s developers out there that are worth billions. That’s fine too. But it’s their responsibility that’s made them earn that billion because most of them have been around a long time and take in high levels of risk and created new things in cities and towns and whatever that might go on. So, they’re contributing and they’re getting paid for it and they continue to donate and give things. So, they’re not terrible people, they’re great people, but it’s just the other ones that might come in as new entrances that just want the coin. That’s not right.

Anthony Denman: So, you obviously won’t work on those people?

Peter Chittenden: No. I don’t have a problem with it.

Anthony Denman: Is there a black and white formula for allocating budgets for off the plan marketing?

Peter Chittenden: No. There’s test mechanisms. So, you say is it around about 1% or one and a quarter but it comes down to the size of the … one and a quarter of the gross realization, the total sales volume.

Anthony Denman: Thanks.

Peter Chittenden: But, it just depends on the environment of which it is and how big it is. So, yeah.

Anthony Denman: How do you advise clients on that?

Peter Chittenden: Well, we go away and, again, we see the end journey. We see where’s all the infrastructure, the sales suite and everything going to be, what other paraphernalia or online media and ads and CGIs and traveling and we package that all up and we don’t get distracted about gross realization as a percentage against that or anything.

Anthony Denman: You don’t?

Peter Chittenden: No. Not initially, but it’s a test. We lay that out and say, will that get us there? We overlay that with our time objective by the client, the developer client and we might say, can we … we might be able to improve on that or do that or push it out.

Anthony Denman: That’s really interesting. That’s a really interesting approach.

Peter Chittenden: And then we go and roll it into the feasibility, which essentially puts it up against, in a very brutal way, sell for a hundred million, this is a million done. But, if it comes out at more, we need to go back and say, okay, what can we do without?

Anthony Denman: What can you do without? Is there like … I mean, you mentioned that … sorry, the CGI.

Peter Chittenden: That reminds me of some ad. I can’t do without my mother.

Anthony Denman: Well, that’s a good one. What’s that? What is that brand? Dove. Is it Dove?

Peter Chittenden: Yeah, I can’t do without my Dove.

Anthony Denman: Can’t do without my Dove. Is that it? Can’t do without my Dove. That’s a great example of branding, turning a piece of soap into a beauty bar.

Peter Chittenden: Yeah.

Anthony Denman: So, yeah, I mean, you can’t do without CGIs and display suite is what you mentioned that before.

Peter Chittenden: Yeah. Actually, if you had to say one, the CGIs are more valuable in a funny sort of way to the display suite, because you can export those and you can popup stuff.

Anthony Denman: Right. You can at least show people what it’s going to look like.

Peter Chittenden: And it can sit in a brochure, they can take it home, they can view it on screen from Alaska, they can look at something in Sydney, whatever they want to do, but they can’t view the sales suite. The sales suite will get knocked down eventually. Whereas, the-

Anthony Denman: CGIs will remain.

Peter Chittenden: So, unless you build to that.

Anthony Denman: That’s right. Yeah, totally. Puts them under a bit of pressure in some ways, doesn’t it?

Peter Chittenden: It does.

Anthony Denman: That’s about it for us. Just one last final question. That is, how’s the market right now?

Peter Chittenden: Well, I’m glad you asked.

Anthony Denman: Where are we? September 2019.

Peter Chittenden: Yeah. So, we’ve just come out of a, as everyone would know, a lull in the market. Fundamentally, the economic conditions were the same as what they were when the good market, but everyone was sort of tired of keep buying, buying, buying and the supply got so full on that there was just … it had to have a rest. So, it had a rest since probably July 2017, but what we’re seeing now since the election, so, now that Scott Morrison’s in, and Bill Shorten isn’t, the market responded to that in a very positive way. So, what we’ve actually seen is our inquiry has increased double from where it was prior to the election, but our sales have only increased by 10% or 20%.

Anthony Denman: The inquiry’s doubled?

Peter Chittenden: Doubled.

Anthony Denman: Okay.

Peter Chittenden: Yep. So, what that’s telling … that’s an unnatural gap historically for us. So, what that’s telling me is two things. One is, the sales volumes will increase very soon because the conservative, inquisitive inquiry will pull more volume out of the market, right? So, that’ll happen. The next thing is, is the investors will start coming back because we haven’t seen them at all basically for two years.

Anthony Denman: Totally.

Peter Chittenden: They’ll definitely come back. Why do I know that? We’ve mapped that … when we were say doing a thousand sales a year in Sydney, our Sydney office, 52% to 50% to nearly 60% were investors. Last year, we had a shocking year of only doing 450, shocking year being reflected in the market, still our market share. But, the investors only represented 20%. So, that’s 20% of 400. So, there’s like 80 investment sales for the same similar product. So, they’re going to start to see that coming back plus the final ingredient is the simple fact that there’s been no more development put in the market, there’s only been sort of two or three new launches a year for the last three years and that’s launching being new introduction of new stock, never before released. So, we see that coming on and all the architects and all the industry people are saying, we should now reopen that next stage or start looking at things.

Anthony Denman: Hallelujah.

Peter Chittenden: So, 2020, we’ll be on.

Anthony Denman: Excellent. Great. Great news.

Peter Chittenden: Now’s the time to buy.

Anthony Denman: Great. Thanks Peter. How do people get in touch with you?

Peter Chittenden: They can just contact me via email on peter.chittenden@colliers.com.

Anthony Denman: Excellent. Thanks very much mate.

Peter Chittenden: Thanks Anthony. Appreciate it.