Q&A: Property developer Larry Kestelman on the outlook for the Melbourne property market
Larry Kestelman (pictured right), a property developer with more than 20 years experience, heads LK Property Group, among other real estate businesses.
Kestelman founded telecommunications company Dodo, which was sold to M2 Telecommunications Group for $203.9 million in 2013. He remains a major shareholder.
He is also director of Oxygen Ventures, which invests in and develops up-and-coming businesses.
Kestelman talked to Property Observer about the outlook for the Melbourne residential property market, an upcoming product launch and the way he runs his businesses.
What are your views on the outlook for the Melbourne property market?
The market is very good. We’re doing well with sales. We produce quality product and there’s demand for that.
We are reasonably bullish about the Melbourne property market.
We don’t concentrate on only one suburb. [Our properties] are selling well and getting interest from local and overseas buyers.
The overseas market is still strong. Australia is an attractive place to live, work and study.
Locally, we’re definitely in a good moment in time with low interest rates. We’ve got a lack of supply and there is a shortage of quality development sites. I look at what’s in the pipeline and it’s hard to find quality sites.
Tell me about your upcoming launch.
It’s a joint event between LK Property Group and Qantas Frequent Flyer on June 24. We first initiated our affiliation with Qantas in 2013.
We are the exclusive partner for Qantas for property in Melbourne and we develop a number of properties around town and market them to Frequent Flyer members.
About 600 members of the Frequent Flyers program have been invited to attend the invitation-only launch event in Melbourne’s Docklands.
I’ve been in property for 20 years and over the last four to five years there have been different gimmicks but the only true loyalty program that works is the Qantas Frequent Flyer program. It’s a way to reward clients and keep them coming back.
LK Property Group uses mainly in-house design, trade, marketing and sales staff. What is the advantage of this strategy?
To achieve a consistent result over a long period of time it’s hard to get different contractors to do the work: as their interest wanes, you get a different result. If you build the processes and people internally, you get a consistent result.
The property industry in the past has been used to using external people but I intend to be here still for a while. We intend to do the hard yards now to get consistent results in the long term.
We invest in all the people we work with, both inside and out of the business. A happy customer is one who will come back. We have a concierge service for all of our purchasers. We hold their hands through the entire process.
How do you choose the external business partners that you do work with?
First of all I have to meet the people and get comfortable with them. For that, history speaks a lot. I would want to talk to other clients they have, understand what experience they have and make sure they are of the right calibre. To me, company name is irrelevant.
You run other ventures. Tell me about them.
I’m a business person. I’m in the business of setting up businesses, processes and people to make businesses operate. That’s what I do. Property is the same thing.
The Big Pitch is [one current project through Oxygen Ventures that aims] to find the brightest people with the best ideas and then helping them succeed. We are hoping to attract the best of the best with the form of people and ideas and we can help them with funding and services they need.
In the [LK Group of companies] we have legal, financial, call centres, we have a complete incubator service to help [start-up businesses] grow quickly.
The Big Pitch received more than 400 responses. I encourage online retail and technology companies mainly. Those are my areas of expertise. I love businesses that use underutilised resources where we can match supply with demand.
How do you apply technology in your property businesses?
From a technology point of view, for property it’s more about the data and the way we market to customers. [Working with] Qantas is an example of working in a scientific way, analysing what kind of people will be interested in the properties and marketing to them.
Picture courtesy of Vincent Q/Flickr/Creative Commons.
