Amal Awad speaks to one of the major players in the Queensland property scene, Mark Stockwell
Mark Stockwell has a few titles to his name – managing director of property business Stockwell; Olympian; former Queensland Property Council president; father of five.
Chairman of the Commonwealth Games Organising Committee is the latest addition.
2018 Commonwealth Games
Last year Stockwell successfully led the Gold Coast’s bid for the 2018 Commonwealth Games, and while his sports experience makes him a suitable candidate for the job – he is both an Olympic and Commonwealth Games medallist in swimming – his property expertise is also proving useful given the contribution property players will make to the Games.
Stockwell’s aspirations are ambitious, but his focus is on long-lasting change. He wants the Games to assist in building a great city on the Gold Coast, but he believes an equally significant task is to build city pride and confidence, noting that such events are crucial to community life – and great for Australian sports.
“These are very complex, difficult events to run. So when you run them and you run them well, that gives the city a big lift. No different to when Brisbane put on the Commonwealth Games in 1982; it then had the confidence to put on a great World Expo in ’88.
“And the Brisbane that I grew up in was a country town, but now Brisbane is a great world-class city.”
Stockwell believes in a similar story for the Gold Coast, and says every decision made will be “about the legacy”.
“But you can’t make this sort of investment just for a 10-day event. So the money we spend and the infrastructure that we deliver and the way that we do it [have] got to reap massive dividends.”
This means a major financial injection into building venues, facilities, an athletes’ village, road upgrades and infrastructure. More specifically, there will be an estimated $2 billion in direct spend. Stockwell says the committee’s job is also to drive revenue – the goal is $1 billion. He anticipates criticism about the costs, but he argues that it is an enduring investment.
“The Gold Coast is a growing city so it needs venues and infrastructure anyway … The good thing about the Commonwealth Games is that it makes sure its spent by a certain date. And so what happens is you build massive capacity into a city, but then the city can leverage off [it] well into the future.”
How the city will be built certainly matters to Stockwell, given he works in a private business of investors, developers and managers of property. For a long time, they have also been builders and designers, he says, but the focus these days is on the aforementioned trifecta, traversing such sectors as leisure and health in Australia and the US.
Industry focus
On the shift in industry focus, Stockwell says post-GFC uncertainty has meant it’s crucial to understand what your core business is.
“It costs a lot of money to have a construction team, and you’ve got to have them working all the time. And we saw that may not have been the situation, so that’s why we’ve really made a bit of a shift, focusing more on our investments and future development potential.”
Development
On development, he has concerns about its progress in a state where infrastructure charges are having the “biggest impact on getting development moving” in Queensland. He flags it as perhaps the most significant issue in the development sector in the state.
“We’ve now hit a part where the government and the councils have really taken a lot of the upside out of development through … the huge amount of conditioning that goes on for an approval,” he says, in reference to councils “hitting up” developers, making applications to fix up infrastructure that are irrelevant to the development itself.
Meanwhile, infrastructure charges see developers having to cut “big cheques” (to the tune of multi-millions of dollars).
“It’s got to a point where … because of [infrastructure charges], you won’t start a project. So they are actually holding back development,” he says.
The tax came about in the early 2000s in Queensland, during a “rising market”, which allowed council and government to get away with it, according to Stockwell.
“And they’ve really put a noose around construction and development. Property is a huge part of the Queensland economy, and we pay a huge amount of tax … and then on top of that we’ve been taxed on infrastructure. So … it’s no surprise that the state’s revenues are down on stamp duty and transactional taxes.”
He applauds the recent moves towards capping infrastructure charges, but says there is still a way to go – “it’s just too high”.
Going forward
Stockwell is candid throughout our discussion, but he is perhaps more cautious when I ask him about what property opportunities he feels most optimistic about. The property industry, after all, is still dealing with the impacts of the global financial crisis and funding costs on the back of turmoil in Europe, and he’s not sure things are “good” yet.
"However, I think if you know your patch, you know your market, there is demand. We do have economic [and population] growth in this country … but you’ve still got to be very focused on projects,” Stockwell says.
“And the other thing is, there are a lot less players in the market, which is good. The people in property in general know what they’re doing, are very good and very focused … because otherwise you don’t survive. And I think there [are] reasonable opportunities. I don’t think we’re all sitting there going ‘you beauty’, because that’s not the case.”
It is a market of varying fortunes, however. He cites retail as hitting hard times, but says he’s still “pretty strong on retail”.
And while supply and service to major miners are doing well in Queensland, he says the mining companies can stop overnight – “they’re just mothball projects”. However, he adds, there is always a need for electricity, coal and energy supply into Asia.
“The expansion might stop, but the underlying supply won’t stop, and the mining industry won’t stop. So Queensland’s not in for a big fall.”
He has reason to feel encouraged about Queensland’s prospects, with the Stockwell business currently most active in retail and city fringe residential.
His sentiments on the latter are buoyed by population growth; as long as there is some growth – and Queensland has it – people will need services and housing, he argues. “So that’s a very positive thing.”
He flags continued evolution in retail, arguing it’s necessary to create “places” and “leisure”, and focus on convenience for customers.
“I think it’s knowing what people want, and providing that in the centres is the critical thing.”
He also believes major retailers are going to have to rethink their models, with the value of some shopping centres being hit. From an investment point of view, “big box operators” are not considered a good investment anymore, Stockwell says.
Ultimately, he shows faith in Queensland’s commercial markets. Business is good, with Stockwell undertaking developments in Mackay, Sarina, the Sunshine Coast and Brisbane. It’s not only Stockwell who wants to plug into some positivity – he says people are getting weary of negative news and are looking for some sunshine amid the gloom.
“I’ve seen a bit of a change in the market, even since Christmas, where people are saying, let’s get on, let’s do good business.
“No one’s going to get rich overnight,” Stockwell says. “Short-term bonanzas are not going to happen, but good business and good business people, I think, are doing well.”
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