With over 25 years experience in both the local and international property industry, Michael Fox has (almost) seen it all. We recently sat down with him to unlock some of his industry insights, and to hear about the current operations and vision at his latest venture, CostaFox.
Rob Langton: Thanks for sitting down with De-velopment Ready - you got your start in property man-agement, tell us about why you chose this field rather than going straight into sales?
Michael Fox: I say to young people these days the best place to start within the property sector is in property management - it’s the entry level point into the indus-try and opens the door for future opportunities down the track. It also provides you with a good understand-ing of the mechanics that drive residential real estate transactions.
RL: You moved quickly from leasing into residential sales, what was your motivation to make that transi-tion after less than a year?
MF: Well it’s a natural step - once I’d learnt the funda-mentals within property management I was eager to capitalise on my ambitions and explore what opportu-nities were available within the sales arena. I could see that the experienced leaders within the office spent most of their time on the road meeting clients and clos-ing deals and that’s where I could see myself moving as quickly as possible.
RL: Tell us about those early years in sales, who or what guided you back then?
MF: I was a good ordinary sales person without setting the world on fire - fortunately I was lucky enough to work with and be mentored by the likes of Paul Walker who imparted in me a deep understanding of not only the property industry as a whole, but also how to work with people which is what drives any sales role.
RL: From there you transitioned from residential into commercial, talk us through that decision.
MF: I’d always followed transaction activity within the commercial space - in residential sales the value of transactions were a lot less than those in commercial and I thought I had what it took to give it a go. To get a start I needed to go backward to go forward, so I went back into leasing within the commercial arena for a year before I earned my stripes and became an indus-trial sales agent.
RL: Why industrial?
MF: In the commercial arena, there are different ave-nues; capital, industrial, office. I worked for a large in-dustrial firm, McGees, under the direction of Tommy Davis, who was a legend in the industry and gave me insight into a much bigger market.
RL: And was it from there that you moved into the de-velopment space?
MF: From McGees I transitioned into the office market with Knight Frank for a period, but I had my sights set on going bigger again – and development was where I saw that occurring. I joined the Smorgon Property Group, which after its disbandment led me to a position at Toll Holdings. This position was possibly the high-light of my career, as when I joined, the company was turning over $300 million per annum and by the time I left the company had got to $9 billion in annual revenue.
RL: And I understand you worked with some pretty im-pressive people at Toll?
MF: Absolutely, I worked with Mark Rowsthorn and Paul Little – some very strong business minded peo-ple. It was from working together at Toll that Paul and I started the journey into Little Projects.
RL: Talk us through how Little Projects came into ex-istence.
MF: Well it was almost by accident really; I came across a site in Richmond that I thought I could do something with, and that ended up being quite successful. We then purchased another project and another and be-fore we knew it Little Projects had grown into some-thing requiring my full-time attention.
I decided to leave Toll to manage the operations at Lit-tle Projects during which time we ran a very success-ful business over the course of the next seven years - in essence I learnt a lot but had a lot of enjoyment and fun along the way.
DR: What learnings did you take across from your time at Little Projects into your current business, Costa Fox?
MF: The key take-away is that it’s never about one indi-vidual – it’s always about the team. I think at Little Proj-ects we created a fantastic team, and that’s something I’ve been able to replicate and achieve at Costa Fox too.
DR: What’s it like now operating your own business af-ter working with some of the biggest personalities and legendary figures within the property industry in pre-vious roles?
MF: Working on establishing Costa Fox in recent times with Robert Costa has been fantastic - he’s somewhat of a quiet achiever, but a very intelligent man who al-lows the business, and myself, to be varied in our ap-proach. At the moment Costa Fox is involved in a high-end residential project, an industrial project, and a strata office building – and this variation is key to our mandate and certainly one of our strengths.
DR: So variation is the key to success?
MF: In our case, it’s definitely a component. But equal to this is our desire to pursue projects that offer higher quality to where the market is at - I’m reasonably critical of the standards that exist within each sector so I pre-fer to shoot for above the bar so that we can be proud of the projects we’ve delivered in the years to come.
DR: Tell us about your Bower project in Manly - why did you decide to expand into Sydney?
MF: It was a unique opportunity to deliver a very high-end project in an extremely sought-after area. The site and project just felt right. Location doesn’t really phase us - we’ll take on sites in New Zealand, further over-seas, interstate. It comes down to being the right site and more importantly the right project for the site.
DR: What do you think it takes to make it? How do you stay consistent?
MF: It’s not easy; you’re only as good as your last proj-ect. One bad project can sometimes wipe out three or four good ones. So we’re always trying to find that next project that’s going to be a level above. The real key to success in property development is making money on the way in – but many people don’t understand that concept. It’s hard to buy and hope, you need to make the money, when you’re doing the buying.
DR: When you are in acquisition mode, what are the fundamentals you’re looking for?
MF: It’s hard to explain, but I get a feeling. It’s not much more than that, but I get a feeling in my gut and realis-tically, that comes from experience. We were agonis-ing over a site the other day, and I thought to myself that the fact that I’m agonising over it means that we shouldn’t buy it. It’s hard to give a more concrete answer than that – but when you know, you know.
DR: Now with over 30 years of experience in the prop-erty development space, do you have any other keys to success you can share?
MF: I think pride is a big motivator and a useful tool for success. I want to make sure that each project we un-dertake, that I can drive past and be proud to say “I built that”. The other would definitely be the people along the way. This industry is built on relationships; understand-ing the importance of that will put you in good stead for the hurdles that are shore to pop up along the way.