03 Aug 2017
KOKODA - Holding The Line On Quality
‘Passionate’ is a word prone to overuse, often applied to even trivial beliefs. When you speak to the people at Kokoda Property though, you soon understand they really are … intensely and fervently inspired by fine architecture, superior craftsmanship, and the challenge to uplift the residential landscape.
Developer Kokoda Property has been active in the Melbourne market for 20 years, with a focus on high quality projects in blue-chip locations. In recent years, they’ve successfully taken their design-driven approach north to Brisbane. And now, they have even more ambitious expansion plans on the drawing board.
The force behind Kokoda, originator of its quality-conscious culture, is former rag trade executive Mark Stevens. The one-time director and COO of Jeans West founded his development business in 1997, while he was still enmeshed in the corporate world.
“I had an epiphany, actually, in the mid-nineties,” he explains. “I read a book, Rich Dad Poor Dad by Robert Kiyosaki. I realised I could either keep doing the same thing, restructuring and fixing other people’s companies, or I could do my own thing.”
The book famously contended that, rather than learning to work for money, we should learn to have money work for us. For the qualified accountant, it proved a turning point. But there was more to Stevens than bean-counting and balance sheets.
“I grew up in a family of tradespeople,” he says. “Even though I’m professionally trained as an accountant, I love architecture. I’m a creative person, which might sound a bit odd for someone in finance. But I just loved architecture, particularly classicism.”
So, compelled by this love, and a desire to create beautiful living landmarks, Stevens began developing luxury homes while still maintaining his corporate ‘day job’.
Initially, he built lavish residences in some of Melbourne’s most elite suburbs – Toorak, South Yarra, Hawthorn, Yarrawonga. Those elegant and timeless designs stand as the company’s proud legacy. But these days, the buildings bearing Kokoda’s quality hallmark are substantially larger.
The step from individual houses to multi-unit development was not necessarily planned. “Actually, the choice was made for me,” he admits. By this time, Stevens had transitioned full time to focus on his development pursuits.
“When the GFC came, I was building luxury homes which we would sell on completion. The banks suddenly said I’d have to double my equity. So I knew I needed to change the model, essentially moving the risk to the front end.
“On the tail of the work I’d done in terms of quality (selling houses of such distinction they’d bring up to $10 million), I moved into higher volume. We simply needed to create the market euphoria at the beginning by selling the vision, rather than at the end with the completed product,” he explained.
The move was patently successful. Currently, the company now named Kokoda has multi-storey apartment projects worth more than $700 million under development, delivering new dwellings at a rate of around 650 apartments per year.
Stevens’ operation has completed more than 100 developments. Learnings in luxury residences were first applied to small upscale apartment developments such as Mathoura in Toorak, Lex at South Yarra, and Manningtree, Hawthorn.
Soon came multi-level apartment projects, starting with Q1 and Q2 at Blackburn, with 50 and 48 apartments respectively. Then, up a notch again: Infinity at Oakleigh with 92 apartments and three retail premises, Leo at Camberwell (90 units) and 8 Montrose Street, Hawthorne East (111), each with four retail units.
“Our philosophy remains unchanged,” Stevens says. “Every Kokoda Property residence represents an unfaltering commitment to quality, meticulous attention to detail, and luxury inclusions as standard.”
They have a saying: Kokoda creates homes that are ‘not just liveable, but lovable.’ “We practice what we preach,” he says. “We wouldn’t build anything we wouldn’t live in ourselves.
“Our ultimate satisfaction comes from creating homes that residents will adore, inside and out. We seek out the best locations, so that the lifestyle afforded by the surroundings lives up to the level of luxury our homes provide.”
Through astute site acquisitions, innovative project design, keen project management, and smart sales and marketing, Kokoda has grown to be a sizeable, highly respected developer.
The approach has always been to pre-sell apartments before embarking on construction. And sell they have. Kokoda has achieved sell-out, on average, within 12 weeks.
The most recent development to conclude in Melbourne has been Evergreen at leafy Ivanhoe, a 7-storey collection of stylish apartments sheathed in a façade of slender, vertical timbers. It was fully pre-sold within just 10 weeks.
Also nearing sellout in the Victorian capital, and now under construction, are the 88-apartment Trentwood at Glen Iris, and Casa Del Mar, a 68-lot foray into the luxury townhouse market at Mordialloc.
With the business model proving so successful in Melbourne, Kokoda sought to expand elsewhere. “I’m a big believer that new territory provides new lessons,” Stevens says of his decision to enter the Brisbane market. “It also makes good business sense to spread your capital across various markets, diversifying your risk.”
The key, of course, was always to find the premium locations so fundamental to Kokoda’s philosophy. In Brisbane, that was Newstead, because of its high level of lifestyle amenity, with restaurants, cafes, entertainment, premium retail, and proximity to the city.
There they are building Chester & Ella, elegant twin towers with some 1,500sq m of exclusive resident amenity, including rooftop pool, spa, outdoor cinema, kitchen, barbecue areas and golf putting greens. There will also be a private dining facility, courtyard terrace, health and wellness centre, gymnasium and round-the-clock hotel-style concierge.
Chester (stage one) was named the top-performing project in Brisbane’s apartment market in the December quarter last year, recording 70 unconditional sales for the period. The next best performing project managed only 24.
Stevens puts that down to a more discerning market that is turning its attention to the high quality, luxury product for which Kokoda is known. “There is always demand for good quality and good locations,” he said.
“There’s a reason we have been continuing to sell in Brisbane when others aren’t. It is our quality, our point of difference. It is simply about identifying the gaps in the market and delivering the value proposition. It will work, even if the market is oversupplied.”
Demand for Kokoda’s apartments saw Ella (stage two) launch ahead of schedule with a single purchaser buying apartments $14 million in one transaction. Stevens has also cemented his commitment to the Brisbane market by acquiring a $12.5 million river-view site in Milton and a $9.5 million DA-approved riverfront site at St Lucia.
Beyond that, Kokoda is looking for opportunities in Sydney, where it is opening an office at Surry Hills. And a recent trip to America saw plans laid for a Kokoda foray stateside in Los Angeles, San Francisco or New York.
“It’s more exciting than daunting,” he says. “There’ll be a new culture, of course, and new practices. But, once you’ve set up a new office and operation in another state, it’s not that different to do it in another country. The fundamentals are still the same – where there is a desire and a need, we’ll bring the edge we have.”
In fact, Mark Stevens doesn’t see any barriers to growth. Asked where he Kokoda would be in 10 years, he said, based on the numbers they’re achieving now, he could expect them to have properties worth between $5 billion and $10 billion under development.
“It’s not about lining my pockets. Those are just numbers. It’s about how you can deploy capital. Really, what I see is that we’ll be working on more jobs, in more cities. We’re more likely to have many small offices of five to 10 people each than one giant office with hundreds of people.”
The Kokoda name, a brand worn with immense pride by Stevens and his team, is one he adopted some way along his property development journey. Yes, it is borrowed from the infamous Kokoda Trail through PNG’s Owen Stanley Range.
“I remember standing in a newsagency with a guy in Brisbane – we’d gone there for some sort of conference. I was still COO at Jeans West and I was probably building 10 houses at the same time, working 16 hours a day.
“I commented to him what a hard slog it was getting things off the ground. I used the war analogy – the constant battle. So the name does relate to the track. It signifies the challenge you face to start from scratch to build something worthwhile and successful, the constant grind to make your way forward.”
Never one to take the symbolism lightly, Stevens walked the track for the first time in 2005. Last year, he did it again with his 17-year-old daughter, and this year he will trek again with his sons, aged 11 and 12, and his partner.
Many in his team have also made the pilgrimage, though it’s not viewed as some sort of company ‘right of passage’. “We do encourage staff to do it, and many have, but for all sorts of reasons. Some because of the spirit it creates, the mental toughness it requires, or because they appreciate the history, or have a personal connection to the war.”
Whatever the reason, it is challenge they are proud to tackle, to signal their belief in Kokoda values – both relating to the brave war effort and to the brand they stand behind.