MORRIS PROPERTY
BEGINNINGS
The glittering towers of the Gold Coast are a long way from Mr Morris’ business origins running service stations and limousines in Canberra with his parents Margaret and Dennis.
“It was a small family business, we used to work 100 hours per week, we probably still do,” he said.
“It was a small business. We did everything ourselves and it was a couple of years before we had employees.”
Mr Morris said while running petrol stations, he began to understand that owning real estate was a better proposition than paying rent.
“The oil companies worked the feasibility backwards. For example, you’ll sell this much fuel, you’ll sell cigarettes and drinks, and here are the wages to run the place.
“They could pinpoint it pretty accurately. They said: ‘we’ll let you make $35,000 a year and the lease on a Holden Commodore.’
“I bought one of the first petrol stations when they brought in the Petroleum Retail Franchise Act.”
Mr Morris was infuriated when the oil company accused him of making “too much money”.
“They used to set the rent in three-year periods. They would come in at the end of the third year and go, ‘your rent was $4400 a month. It is going to be $7000.’
I said: ‘how did you get that?’ They go, ‘you’re driving a new Mercedes.’ I told them it was one of my hire cars. I said: ‘You can’t link that business to this business. I said in fact that business is this business’s biggest customer, which makes you successful.
“I told them: ‘you know what pisses me off? The people on your side of the table are always worried about how much money the people on my side of the table make’.”
BROADENING HORIZON
In 1985-86 he built his first motel, but he was forced to rethink his business again when Verve, Broadbeach ●Sierra Grand, Broadbeach Synergy, Broadbeach Qube, Broadbeach (under construction)
Boardwalk, Burleigh Heads (under construction) ●Koko (presales)
Otto, Mermaid Beach (under construction)
Opus, Broadbeach (presales)
Sandbar, Burleigh Heads (presales)
the Australian pilots’ dispute hit the travel industry in 1989.
“People stopped travelling, the motel business was doing it tough. I said to myself: ‘What can I do?’ I had four motels, six petrol stations, three fuel depots, about 30 trucks. It was a nightmare.
“I became an accidental developer. I had to think, what can I do with these properties running at 30 per cent occupancy?”
Mr Morris’ solution was to come up with the idea of the apartment hotel.
“We put kitchens into the hotel rooms, sold them off with a leaseback arrangement, repositioned it from four star to three star, lowered the tariff, occupancy went through the roof.”
Mr Morris said by this point the pilot strike was over. His first major development in Canberra was called James Court between 1992 and 1994.
It was a nine-level building with 188 units and seven commercial tenancies.
Between 2002 and 2009 Mr Morris teamed up with real estate agent Graham Potts in Amalgamated Property Group.
Mr Morris credits Mr Potts with helping him expand his horizons beyond Canberra.
“A real character, quite intuitive, reads the market exceptionally well.
“In 2006 we were doing projects in Canberra and had a rolling books of 1000 dwellings. And that is when we decided to expand.”
They first developed the Aurora Tower in Queen St, Brisbane, before the same connection who introduced them to the Queen St site pointed them in the direction of a block in Broadbeach.
GOLD COAST
“It has always had a reputation for white-shoe developers. Also, people with not a lot of equity in their projects.
“That makes them cowboys, if you like, because there is no real money being put into anything. And so, when the market turns, the developers, or the proponents, they have no money in the game, so they tip up and walk away.”
Mr Morris’ first project with Mr Potts was Verve (completed in 2006) – a luxury beachfront tower overlooking Kurrawa Park.
He said he approached the Gold Coast market the same way he had in Canberra – by largely targeting owner-occupiers and putting equity into the projects so they were “properly funded”.
“Our approach has never been to build things for the holiday rental market. It has never to chase sales offshore.
“It has always been to assess the local market and provide appropriate product for that market,” he said. “Verve is a classic case. We sold that without management rights. it has a caretaking arrangement. Some developers are so desperate for cash, they have to sell the management rights. “A caretaker is effectively a paid employee of the body corporate. It works better because the owners are not locked in to an operator, whose primary motivation is to run a business.”
SURVIVING THE GFC
Mr Morris parted ways with Mr Potts (they still have joint ventures) and “replunged” into the Morris Property Group brand in 2009.
However, the timing could have been better, as the Gold Coast had started to feel the effects of the Global Financial Crisis.
“The effects were felt everywhere. It was greater on the Gold Coast, because property prices fell 30 per cent. In Canberra, prices plateaued.
“The Gold Coast had a rockier ride, and we had projects with unsold stock.”
But Mr Morris said there was no “fire sale” as they owned their projects.
“A lot of people dumping and running.
“Our concern is always the people who have bought from us, have done so at a certain price. If you dump and run, then you effect all their property values. And so, you can put your client base into a difficult situation. That effects your reputation.” were
Mr Morris gave the luxury Eclipse project in Broadbeach as an example.
“We built Eclipse in the GFC. We did not sit there and go ‘what will we do?’ We did our commercial assessment.
“We took it to the market, we sold 20 units of the 56 and that was enough for us to get started and we worked our way though the project.
“That taught us a lesson. There is a market on the Gold Coast. There are people who have built their lives here.
“And generationally we have the second, third, and fourth generations building their lives on the Gold Coast.
“So there is a constant demand for housing.”