National Asset Management executive director of property Graham Brewer has a habit of getting in the headlines.
National Asset Management executive director of property Graham Brewer has a habit of getting in the headlines.
A few years ago it was by pulling one of the Victorian property deals of the decade, picking up the Southgate retail complex in the heart of Melbourne for what has posthumously been called a steal.
Just recently he scored headlines again as head of the panel of judges that gave Crown Casino the top award for the Property Council. This sparked howls of protest, but as Brewer points out, he was just the chairman. Brewer is a great supporter of the Property Council and later this year will be the council’s congress chairman when the event moves to Melbourne.
He is also forthright about his role in the property market. When he joined NAM a couple of years ago, Brewer described his role as simi-lar to the legendary oil well fire-fighter Red Adair.
Despite the occasional controversial image, Brewer’s roots in prop-erty have followed a traditional route.
He is a valuer by profession, starting his career in local government in Melbourne’s eastern suburbs.
“I had two choices for a career: teaching and property,” he says. “My father suggested property and it was the only time I listened to his advice.”
After local government, Brewer joined real estate agents Fitzroys which gave him an insight into the commercial world.
The next move, 10 years later in 1986, was to AMP as a valuer. Within a couple of months the senior valuer left, so he moved to the top job.
In 1990, he was head-hunted by the Victorian Transport Accident Com-mission (TAC) to create a property investment division.
“It was the right time to move as the property market was on the turn, and setting up a new division from scratch was going to be a challenge,” he says.
It was during this period that Brewer bought the Southgate complex for $309.5 million, a highlight of his career, he says. Had the TAC continued with its property division, that investment after four years would have been worth more than $500 million today.
The TAC, however, decided to leave the property sector and Brewer was without a job. But he was blessed with good timing because NAM manag-ing director Paul Laband was looking for someone to revitalise the property portfolio.
Laband had been brought in to shake-up the bank’s moribund funds man-agement operation.
“It was another great opportunity with lots of potential,” Brewer re-calls. The role required him to make the existing assets perform and to create a new range of wholesale products. Making the existing di-rect property assets work was going to be a major task as 11 out of the 13 were under-performing. Hence the Red Adair approach.
“We had to develop systems for managing the properties better and getting the team away from the day-to-day task of looking after prop-erty,” Brewer says.
The solution was to appoint external managers to look after the prop-erties while Brewer and his team tackled the investment side of the portfolio.
In four years, Brewer has created a portfolio of more than 20 proper-ties across all sectors throughout Australia.
“We are now getting good performance from our properties and the un-derlying values are also very good,” he says.
NAM has broadened its property exposure to include listed property trusts (LPTs) and has created syndicates for its clients. Direct property investments are helping to underpin the sector, Brewer says.
“While absolute returns have dropped a little, the out-performance of direct property to cash and LPTs during the past year is significant, with capital growth in most markets.”
NAM has developed products to provide both direct property and LPT exposure in the one vehicle. It sees offering alternatives for inves-tors, rather than just selecting the LPT route, as a means of main-taining high performance compared to other asset classes.
The problem today is the difficulty of getting good-quality property. “Fund managers are in an acquisitive mode. I am glad we overhauled our portfolio a few years ago, rather than now,” he says.
“But there are always opportunities to be had out of other people’s misfortunes.”
The misfortunes, Brewer says, are often created by those who have en-tered the property market between cycles and believe a bull market will run forever.
Brewer has worked through a number of property cycles and has seen investors and developers come and go. Has that given him a wise head on old shoulders?
“It is about timing and adding value to an investment, but property is now regarded to be a good asset class to be in and there are still plenty of opportunities,” he says.
