The Growing Up Years: Vyril Vella
Leighton Properties 2 Oct 2012
The end of the 80's was considered a very bullish period in property. We enjoyed several good years before the market totally collapsed in the early 90's, delivering what was thought to be the darkest days of the property industry.
When I came on board the Maritime Centre was underway. It was the company's first major building project and we were able to turn it into a financially successful project. But we also had some difficult projects, including St Kilda Rd in Melbourne and Cosmopolitan in Adelaide, which became more difficult as prices dropped and tenants dried up.
The benefit of hindsight
In hindsight, the downturn was a good thing for Leighton Properties; it made us sharper and more focused, and forced us to work out how to maximise our performance going forward. We downsized the business, retained a core group of dedicated and highly skilled people and implemented some fundamental changes:
1. Rather than being positioned as a feeder for the construction company, we looked at each project as if it were an investment. Our focus was to ensure a return on each project, which required us to significantly improve our risk assessment process.
2. We also needed to manage the construction contracts more commercially, so we developed a set of contract conditions against which our 'family' construction companies could competitively price.
3. Due to balance sheet pressures, our focus changed to projects that required minimal equity but maximum skills.
4. We determined the need for a balance of short and long term projects in order to report profit annually.
Bids, bids and more bids...
These changes led us to bid on many large-scale projects, including four casinos. After missing out on Brisbane, Cairns and Melbourne, we eventually won the bid for the Sydney casino in 1994, which gave not only the Company but also the whole Group a huge boost. Star City ensured our return to profitability, and many years of successful projects continued.
Innovation and sustainability
For the entire Leighton Group, innovation was always an important driver. Proudly, Leighton Properties has consistently been at the forefront of global best practice in building life cycles, services, structures, finishes and design.
In the building and property sectors, sustainability really became a priority at the turn of the century, where the focus on long term efficiency, global awareness and rising operating costs increased significantly. Although we had focused on maximising building efficiency in the past, the Westpac Place project kick-started our focus on broader sustainability initiatives. In 2006 we took a major step forward with the Green Square project in Fortitude Valley, where the Company ultimately delivered Queensland's first 5 Star and 6 Star Green Star rated buildings.
How would I describe LPPL?
"A very successful idea – a property development business operating as an adjunct to a construction business".
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