James Tutton

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Urban.com.au's chat with Neometro Director James Tutton continues, following the <a href="https://www.urban.com.au/news/james-tutton-on-all-things-urban" target="_blank">first part</a> published earlier this week.

Neometro was the first property developer in Australia to gain <a href="http://www.bcorporation.net/" target="_blank">B Corporation</a> status - what are you doing above and beyond the norm?

To become a B Corporation member we really didn't have to change much in terms of what we were doing, although we did need to document a lot of what we were doing by way of community engagement, ESD, governance, equity participation from members, directors and so forth. A great example would be what we call in Australia the HR section of the questionnaires; if a staff member leaves your organisation under good terms - do you welcome them back should they want to return?

We had to document our policy where if a staff member expresses an interest in coming back, even if we don't have a job for them, we kind of just find one for them.

Can the process of gaining B Corporation status be daunting?

The experience can be daunting, there's no two ways about it. I think its quite sensible that the process is broken into two stages.

Initially you jump online, register, complete the questionnaires and I think we came up with roughly 70% - we're now on 86%. Post assessment, B Lab contact the prospective member and identify areas that need to change in your business in order to get certification. Thereafter what is effectively a random audit is conducted prior to certification.

Why is B Corporation status important in Australia?

I've worked quite a lot in the not-for-profit sector and I've seen the lack of entrepreneurialism in the sector. For profit used in the right way can be a massive force for good, ultimately though for-profit tends to attract the hungrier people, smarter people. Leveraging capitalism for positive social, community and environmental outcomes is not necessarily the norm in Australia.

The challenge is there hasn't been a language and metric around that and that's definitely emerging in America and continental Europe more than Australia. Currently there's a real tribe of like-minded entrepreneurs in Australia that aren't satisfied with merely working to climb the corporate ladder - <a href="http://www.bcorporation.net/" target="_blank">B Corporation</a> can give recognition to those people willing to make a difference.

Moving to your current project, 9 Smith Street. You've gone to effort to establish pop-up venues within the existing structure prior to construction. What purpose does this serve when the existing building is to be demolished?

We have <a href="https://www.facebook.com/3000acres" target="_blank">3000 acres</a>, <a href="https://www.facebook.com/slopesprojects" target="_blank">Slopes Gallery</a> and <a href="http://www.broadsheet.com.au/melbourne/food-and-drink/article/place-holder-pops-fitzroy" target="_blank">Place Holder</a> which I feel can create or enhance the sense of community. Our display suite sits in behind Place Holder; personally I take the view that by offering people a well designed, beautiful space to engage and meet, it's a highly desirable outcome, even if they are temporary.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/9SMITH_IMAGES_FINAL_1_0.jpg" rel="gallery-all" title="Image © Neometro"><img alt="" class="image-article-full-width-580px" src="/sites/urbanmelbourne.info/files/styles/article_full_width_580px/public/pictures/article-images/9SMITH_IMAGES_FINAL_1_0.jpg?itok=u2IMyYHC" style="height:336px; width:580px" title="Image © Neometro"></a>

<figcaption>Image © Neometro</figcaption></figure>When will construction commence at 9 Smith Street?

We've committed to a twelve month period for the pop-up businesses, so early 2015 is anticipated start.

Will Neometro be in charge of the choice of commercial tenants for 9 Smith Street?

Absolutely, often you could look at some of our leasing decisions and say that's uncommericial. From our perspective if we develop a building and place a KFC down stairs, not only does that not sit well with us in terms of our social views, but when prospective buyers go reference our past projects and see that... it's a terrible impression.

The natural extension then becomes does Neometro have an ideal tenant in mind for 9 Smith Street?

Including retail is a bit of a no brainer, but I feel there's a real risk when you get dominated by hospitality. This precinct hasn't really attracted corporate retailers and I suspect that will be the case for quite some time; if that were change anywhere it might be along Gerturde Street but I think that's unlikely to be honest.

Independent retailers are our target and we're speaking to overseas brands who don't currently have a presence in the Melbourne market. Possibly a publishing or cycling apparel outlet, mind you we're looking to bring a number of brands to this site. In general I think this end of Smith Street is just amazing..it's really interesting. To see brands like Aesop next door, David Bromley doing his thing across the road, Double Monk, its a really positive thing and we're not looking to disturb the vibe of the area by introducing inappropriate retailers.

Clearly Neometro prides itself/beats the drum on the high quality living spaces you deliver?

I personally take the view if you deliver a well designed, beautiful space for people to live in, it has an impact upon their wellbeing and happiness - it's a critical factor which is quite often is overlooked. In saying that I'm not being defensive of the fact that we're selling apartments here between $495,000- $800,000, that is what it is. But I would argue that we're selling homes that people will be happy in as opposed to selling glossy pictures of what apartments might look like and then finding out a large margin exists between render and reality.

Without sounding in any way presumptuous on behalf of Neometro, I think we can play a small role in leading the sector toward a more socially driven outlook, and I think that's something that is possible. It's a sector that has a long way to go.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/Image8_17.jpg" rel="gallery-all" title="9 Smith Street, internally and externally. Images © Neometro"><img alt="" class="image-article-full-width-580px" src="/sites/urbanmelbourne.info/files/styles/article_full_width_580px/public/pictures/article-images/Image8_17.jpg?itok=wptQDhiA" style="height:211px; width:580px" title="9 Smith Street, internally and externally. Images © Neometro"></a>

<figcaption>9 Smith Street, internally and externally. Images © Neometro</figcaption></figure>Any plans to upscale to high-rise projects?

I think we would be reluctant to deliver a project over 80 apartments; we want to grow as a business doing more of the same as opposed to doing huge projects. A critical factor is depth of market as we find that with a quality of product, it's difficult to sell 200 units in an efficient timeframe whereas selling 50 units is doable, plus we have a focus on the owner occupier market with our projects which demands more intimate developments.

So brand recognition and hitting the target market are critical to Neometro?

Many developers sell through financial planning channels, we don't at all so sales are largely to owner-occupiers and sold by Neometro, not by some accountant in Wollongong. It's been very interesting in terms of Neometro being able to effectively articulate who we are and what we do to our market.

Neometro is in business to make a commercial return but we're also in business to make homes which we're immensely proud of. From a design perspective and in terms of build quality and amenity, I think we've articulated what we do a bit better in this project than what we have in others.

We're proud of what we do, if you look at our credentials it paints a history of the projects we've completed and it also talks about what we've done from a social and community perspective.

What's next for Neometro?

We're about to start construction on George Corner, it's a great project. We're also halfway through Walsh Street, South Yarra and are about to start construction on a project in Toorak.

Right now we're also looking at three other development sites, one south of the river and two north which in a broad sense are not dissimilar to what we've done here at 9 Smith Street. One in particular has a very substantial community interface to it for a variety of reasons - it will be one interesting project!
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silvermb

James Tutton on all things Urban (continued)

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Recently Urban.com.au sat down with James Tutton for a thoroughly interesting, jovial and at times colourful interview on all things urban. A man whose credentials are impressive as they are varied, chief amongst them is co-director of property development firm Neometro.

<blockquote>
James joined Neometro four years ago to drive the development and commercial side of the business while maintaining its strong design integrity. James is the entrepreneur behind the immensely successful Moonlight Cinema, pioneering the outdoor cinema business in Australia and eventually selling it to an ASX listed corporate group in 2006.
<cite><a href="http://neometro.com.au/cms-our-people/james-tutton.phps">Our People: Neometro Developments</a></cite>
</blockquote>

<h2>The CV</h2>

<ul>
<li>Board Member - B Corporation, a not for profit organization which provides assessment &amp; certification for companies seeking to deliver positive social &amp; environmental outcomes while ensuring strong financial performance.</li>
	<li>Non-Executive Director - Shout For Good, a web and app based fundraising platform. Shout aims to leverage technology and social media to generate micro donations for its clients while providing consumers with a streamlined &amp; functional user experience</li>
	<li>Co-founder / Director - SMILING MIND - a "modern meditation for young people". An entrepreneurial not for profit organisation that has been established to teach young people Mindfulness Meditation as a stress management &amp; resilience tool.</li>
	<li>Director / owner - NEOMETRO</li>
</ul>
<h2>The interview</h2>

We begin by asking James: what challenges surround increased density and appropriately sized urban development?

The inefficiency is evident. I'm not a planner, just a guy with a BA in Philosophy, however to me it does not seem like rocket science. It makes so much more sense to build housing which is in immediate proximity to infrastructure, transport, employment, education and everything else. You go out there and look at broad acre developments; this is inefficient in the context of environmental issues, in context of community happiness, transport issues, hospitals etc. It goes on and on and on.

You then look at towers and think... well? I'm not saying towers are wrong, they absolutely have their place but it's about finding an appropriate balance. One of the things if find quite challenging is that you can have a precinct in immediate proximity to rail infrastructure etc. earmarked for medium density development in an area where there are ostensibly progressive thinkers, who then take developers to VCAT with the view that oh no you're evil, you're creating homes for people. That's so hypocritical!

It's the core of a real NIMBY culture which is just is not that positive. It's generalising but some of the views coming out of the Greens have been completely at odds with sensible environmentally focused planning. It can be madness.

Will planning zone reforms coax Neometro into markets beyond its established inner Melbourne footprint?

I look at Brunswick and think absolutely, there are opportunities there. Although can you afford to do an apartment development in Dandenong? No, that's the economics being what they are.

We love Brunswick; there's a lot of poor quality development there although my view is the poor quality development is not a reflection of demand. There's a lot of demand for high quality development from a buyers perspective.

Can you elaborate on why outer ring locations such as Dandenong or Frankston are difficult apartment market from a developers perspective?

It's a mixture of factors. Let me begin by saying inner city sites carry a higher land price therefore you need to get density to pay for it - a $6-7 million dollar slice of land requires you get yield by height. Construction costs being what they are dictate that lower density dwellings such as townhouses are not possible for the site. Should you go to Dandenong, the economics are that the land is cheaper and therefore building townhouses is more efficient in that context, and also meets the level of buyer demand.

I look at Frankston from a planning perspective and think why isn't there fast train and medium density housing in Frankston? It's an absolute no brainer and would entice property developers, but I don't think its going to happen.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/Dandenong_CBD_in_2013_as_viewed_from_railway_station.png" rel="gallery-all" title="Dandenong anyone? Image courtesy Wikipedia"><img alt="" class="image-article-full-width-580px" src="/sites/urbanmelbourne.info/files/styles/article_full_width_580px/public/pictures/article-images/Dandenong_CBD_in_2013_as_viewed_from_railway_station.png?itok=VvfDRcD4" style="height:397px; width:580px" title="Dandenong anyone? Image courtesy Wikipedia"></a>

<figcaption>Dandenong anyone? Image courtesy Wikipedia</figcaption></figure>Is Government investing public money via schemes such as Revitalising Central Dandenong a worthwhile pursuit?

Not my view as a professional, just my lay view but there's a tipping point where things become viable. I mentioned Frankston in the sense that I feel it's very underpriced from a residential perspective because there is no quality public transport infrastructure through to Melbourne. It's just my two cents worth but like Dandenong there is an amount of stigma attached in a social context which has an impact on prospective buyers.

Long term and with further investment it's highly doable. Box Hill for instance is now in its own right more of an economic hub and on top of that it's closer to Melbourne which is attractive to potential apartment buyers. Whereas in Frankston the rail line is not that workable which limits connectivity to Melbourne, although the beaches are beautiful and it has the infrastructure that goes with a small city.

What would make a property developer venture into outer suburbs?

Should the factors that we've discussed become reality, from Neometro's perspective we'd also need to have the comfort that people would recognise what we offer. Even in Fitzroy where we have a design literate audience, some people come along and say Neometro is selling product for x thousands per square metre and the bloke down the road is selling it for one thousand dollars a square metre less. On top of that Neometro's apartments are proportionately larger, because that's just what a nice apartments need to be.

The guy down the road has a dog box; you apply the lower per square metre rate and the fact is that it's smaller - the actual quantum in dollar terms between one apartment and another becomes significant. Around here (Fitzroy) people look at that and understand it - 'I'm getting what I pay for' - that's the key.

But when you hit outer suburbs such as Dandenong, do you have a buyer group who actually understand the variations of quality on offer? That's a challenging thing, I'm not saying they don't, I'm just not personally convinced there is that market.

<h2>To be continued</h2>

During this week, <a href="https://www.urban.com.au/news/james-tutton-on-all-things-urban-continued" target="_blank">part two of our chat</a> with James Tutton will focus on B Corporation status and what it means, inner-city issues plus Neometero's current and future direction.
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James Tutton

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