In the lead-up to Urbanity, on August 3-5 at The Star on the Gold Coast, The Urban Developer sat down with MaxCap Group chief investment officer Bill McWilliams to discuss industry trends, MaxCap’s business model and approach as well as the importance of conferences like Urbanity.
McWilliams will join Judith Brinsmead of ADCO Constructions and Centuria Group’s Jason Huljich as part of a panel discussing their views for the future of Australia’s property industry on Thursday August 4.
How has MaxCap Group established and how does the business go about maintaining such a successful model?
“MaxCap originally commenced as a capital advisory and debt arranging business for property developers. It was a relationship model with our goal being to achieve the best possible outcome for our clients on every transaction.
“Over time we identified a number of gaps in the market that if met, would not only would help property developers, but would also create opportunity for private and institutional investors to achieve a strong risk adjusted return.
“For example, coming out of the GFC, the leverage provided by the major banks became far more conservative. The mezzanine debt market in Australia at that time was predominantly funded via private capital. Regardless of whether you were a first-time developer, or you had 15 years of experience, the cost of funds was the same.
“We were one of the first groups in Australia to raise institutional capital for CRE mezzanine debt, with the view of pricing for risk and targeting blue chip developers, offering a cheaper cost of funds.”
What are the key values MaxCap Group looks for in partnerships that lead to successful property finance agreements?
“Integrity. There is a saying that the three most important aspects of assessing the risk profile of a debt transaction is sponsor, sponsor and sponsor. It is critical that we are dealing with a sponsor that is honest, trustworthy and has strong moral principles.
“Resilience. The one thing we know about property development is that things will go wrong. I think the industry as a whole has proved exceptionally resilient, I never cease to be impressed by how resourceful and creative developers can be to keep their projects on track in the face of market challenges.
“Relationship. I quite often notice a difference where a developer has longstanding relationships with their key consultants, financiers and project team. When things are not going to plan, a strong relationship-orientated approach can be quite important.”
What do you, or MaxCap Group, focus far more time on now than five years ago?
“The majority of our capital is invested in construction or pre-construction loans. Whilst this remains a core part of our business, we want to ensure we can assist borrowers with all lifecycles of property, not just the construction phase, and also for the entire capital stack.”
“Initiatives such as setting up our direct investment business a little over three years ago, and the introduction of a strategic business partner in Apollo Funds Management have ensured these remain significant growth areas for us.”
Three developers on your radar that are doing exceptional work in the built environment?
“Neometro. Having been around for over 30 years now, Neometro remain on my radar and my opinion, continue to go from strength to strength.
“They certainly have a reputation of being one of Melbourne’s most design focused and socially led development groups and have been very successful in blending architecture and design with community and environmental sustainability.
“Doma Group. Another developer with considerable experience, Doma has a great track record in all sectors including multi-unit residential apartments, commercial office, hotels, retail and car parks.
“I was particularly impressed with the design of their mixed-use development behind the Newcastle Transport Interchange which has recently received development approval. The six-level commercial office component of the development has a cross laminated timber structure with a target 5.5 star NABERS and 6 star green star rating.
“Grange Development. In terms of newer developers, it is hard not to put a developer who has plans to build the world’s tallest hybrid timber tower on your radar.
“I think they are a developer to keep an eye out for and I look forward to hearing Grange Development Group’s managing director James Dibble who is presenting at Urbanity.”
An inspiring book or research paper you’ve read recently or presentation you’ve attended?
“I have just started reading Impact Players by Liz Wiseman. I got quite a bit out of her previous book, Multipliers, which made me reflect on my own leadership style.
“Almost all leaders have good intentions but it was great to take a step back and reflect on whether my actions were inspiring my staff to stretch themselves and help their development.”
Two Australian projects that have impressed you recently?
“Brewery Yard. The final piece of the 5.8ha Central Park precinct in NSW, IP Generation are retaining the heritage listed external structure, with the interior to be re-developed into 5000sq m of office space.
“Afterpay will occupy two-thirds of this space. An amazing design which restores and conserves the historic Kent Brewery site.
“Ferny Grove Central. An urban renewal project adjoining Ferny Grove Railway Station being developed by Honeycombes Property Group in collaboration with the Queensland Government.
“I always like transit oriented developments that have the potential to transform communities, and I think this development will breathe new life into Ferny Grove and the Brisbane’s north-west.”
Why do you think it’s important to have conferences like Urbanity?
“It’s is a great way for the industry to both learn and connect with each other, and to understand how cities will change into the future. I talk a lot about our industry being very resilient despite the number of challenges that always present.
“I don’t think that would be possible without conferences like Urbanity, as not only do they help identify trends and challenges, but they provide a great way to improve your own support network.”
Of the vast array of speakers presenting at Urbanity who are you most looking forward to hearing from?
“There are some excellent speakers at this conference, so it is difficult to name just one, but I am really looking forward to hearing from Alison Mirams.
“Being in the construction industry, she has been operating in extremely tough conditions in recent times, but rather than accept the status quo, she is constantly looking for innovation and change to help drive efficiencies and improvement for the entire industry.”
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