How I decide what a property group should own, build and disclose

I treat the portfolio as a set of decisions to be renewed every year, not a collection we are obliged to keep. Each Corvalla asset goes through an annual hold-sell review in which the investment team must show its forward return at today's market value, set against our cost of capital and against the best alternative use of the same money: a logistics development, a rental-housing project, repaying debt or buying back our own securities below net tangible assets. I chair that review, and its conclusions reach the board's investment committee with the asset manager's dissent attached whenever there is one. The method is easy to describe and uncomfortable to apply, because it exposes buildings held for their history, or for the size of the portfolio, rather than for their return. It produced the four office sales of 2023 to 2025. In FY26 it also told us to keep two towers we had expected to sell.

Since 2020, office values in Australian CBDs have turned on two numbers that a headline rent hides: the incentive a landlord gives to sign a tenant and the space that tenant actually takes. I insist our reporting shows both. For each office tower Corvalla now publishes face rent, the incentive on leases signed in the period and the resulting net effective rent, alongside occupancy by area and weighted average lease expiry. When incentives on new Melbourne leases reached 41% in 2024, investors could read it in our results before anyone asked. I work closely with our independent valuers without steering them; my job is to make sure they hold every lease, incentive and vacancy, and that directors understand the assumptions inside a capitalisation rate. I also take the decision on each tower's future: refit it for tenants who want less space of better quality, or sell it to an owner with a cheaper cost of capital.

Corvalla spends between A$300 million and A$600 million a year developing logistics estates and rental housing, and the building contract decides who carries which risk for two or three years. After 2021 I stopped assuming that a fixed-price, design-and-construct contract moved risk off our balance sheet. When builders are thinly capitalised and materials prices move quickly, a fixed price either contains a large premium or rests on a risk the builder cannot bear. I now choose contract form project by project. For complex housing towers we use two stages: a paid early stage to finish design and price the main trades on an open book, then a price with a fixed builder's margin and a shared band for savings and overruns. For repeatable warehouses, where design risk is low, a fixed price still serves us well. I read every major contract's risk schedule myself and report contingency use to the board each quarter.

My first career was in local-government planning, and it still shapes how I approach approvals. I read a planning scheme for what it allows as of right and what it leaves to discretion, and I treat discretion as a cost to be priced, not an opening for negotiation. Before Corvalla lodges any significant application, our team meets council officers and, where it matters, neighbours, to learn which issues will decide the outcome. We agree in advance how far we would take a tribunal appeal and at what point we would redesign instead. On housing supply I argue publicly for firmer rules for rental housing near stations and jobs, and I accept that firmer rules can mean lower buildings than a developer would choose. In our rental buildings we work with community housing providers to let some homes to key workers at discounted rents, and we report the number of homes and the discount, not a general aspiration.

A listed group with a funds platform answers to two kinds of capital: securityholders, who can sell on any trading day, and pension partners, who commit for ten years or more and expect to be consulted before anything significant changes. I manage both relationships myself. With Skarholt Pension Fund and our Canadian partner I agree investment strategy, development limits and reporting in advance, and I tell them about problems before a quarterly meeting rather than at it. With securityholders I keep a simple rule under ASX continuous disclosure: whatever the board knows that would move the price goes to the market first, and our results presentations explain the numbers we would rather not show. I meet our twenty largest holders twice a year and make a point of inviting those who disagree with us. One of them, a holder of 9% of our securities, opposed our 2023 sales programme, and we still meet every half-year.