The Interview, Greg Paramor AO Transcript
*Please note, this transcript was auto-generated and some inaccuracies may exist.
Rob Langton 00:00
Our next guest this morning is Greg Paramor AO one of only a few industry figures to be inducted into the Australian Property Hall of Fame and who brings more than 45 years of experience across a roll call of the nation's largest real estate institutions. Greg is a non executive director of Charter Hall limited chairman of Leftfield Investments. Former CEO of Mirvac group former chairman of LJ Hooker, former director of Leighton Properties, and former Managing Director of Folkestone Limited in addition to these roles, Greg is also our past national president of the Property Council of Australia, a former director of the Green Building Council of Australia, and was the co founder of both Growth Equities Mutual and Paladin outside of his corporate positions within the property sector. Greg is also a past chairman and Director of the National Breast Cancer Foundation, a position he held for six years in is also a director of both the Sydney Swans in the Sydney Swans Foundation, a role he has held for some 13 years. Greg, I hope my introduction gives you justice. Given your extensive experience of what I've just outlined, what's your reading on the current strength of the Australian economy?
Greg Paramor AO 01:32
Given the events of the last 12 months. Indeed, we've forgotten another event that happened. Christmas 19 slash 20 is we had bushfires. So if you just took that as one item, which we tend to swept under the under the carpet, which is a bit sad for many people that are still struggling to to get their life back in order in those regional areas. And I think that's a real issue for Australia, by the way. But we've had a hell of a, you know, 18 months, if you will, or 15 months ride and I think Australia's been incredibly resilient.
I was just musing with a few friends the other day about March last year, when if you remember the stock market took went off south and I think Charter Hall, which is one of my favourite listed stocks went from about $12 to $5.30 or something in a day and you think, oh, my goodness, what's going to happen here? And you look at it today, it's about 13 and a half dollars. Again, I'm or there abouts. And that goes for most stocks. And, you know, we've been very lucky, I think, to have had good governance pretty much at the federal level for some time, you know, we've got pretty, pretty tough fiscal managers with the current coalition.
And they've been, I think, doing a very worthy job of keeping things together being mixed at the state level. But we'll get to that maybe not in this interview. But so I think we're done well. And you know, you do stop and think, gee, we you know, here we are sitting in the Pacific Ocean between the Pacific and the Indian Ocean. And we've had a Rails run, we didn't have a recession, when everyone else did, you know, eight, nine, etc, etc. So we've been incredibly resilient. And that's been borne out by the type of economy we have and the type of people we are.
So I'm pretty comfortable that we've done better than most in terms of weathering this this storm, which, incidentally, we're not out of yet. And we're probably somewhere in the, maybe the mid I hope towards the post the mid but we just don't know. And you don't we just don't know what's going to be thrown at us. And vaccines are great, but it's not a cure. So we're still going to be stuck with the aftermath, or the aftershocks of this vaccine of this virus for a long, long time.
Rob Langton 03:44
How would you evaluate both the federal and state governments leadership in response to the global pandemic? And what impact of their decisions had on the domestic economy do you think?
Greg Paramor AO 03:54
I think they've done a very, very credible job, if not an excellent job, which I think I probably should preface by say probably is an excellent job. If you look around the world and what some of the other leaders and other governments did or didn't do, I think we've done a heck of a good job. They called it early. If you remember, we shut down flights from China very early in the piece. And then we shut down a lot of international travel very early in the piece compared to most of the world. They responded very, very well.
I think state governments, in my opinion have been mixed. There's been a lot of politicking involved, and they are politicians after all, but it's really sad for me to see that the Federation of Australia is now you know, very stark, where we used to just assume that the the borders were just lines on a map, all of a sudden, they took another significant tact during 2020. I don't think I'll call them out. But you know, there's been a couple that have done a shocking job. And there's been a few in between. And I think that is that I'm saying that because when people won't own up and say look, I probably got that wrong. Well, I could learn from x y Zed state as to what we could do better. And that's where politics sit in the road. And you know, nothing to see here. I've done a great job, quote, unquote. But I think, you know, we're probably talking who I'm talking about.
Rob Langton 05:15
In relation to the broader property market, particularly in your role at Charter Hall, and then also Leftfield investments, what opportunities do you see now or in the near term horizon?
Greg Paramor AO 05:25
I always look at property as a servant to the community. Because if people are expanding their businesses, if they're looking for office accommodation, if if we've got positive increase in population, we're looking for housing in various guises. So you always go back to demand and then obviously the supply side. And most of that is in pretty decent shape.
At the moment, there is some question marks over some residential, particularly apartments, the investor grade apartments, particularly in this city in Sydney, I really can't talk for the other states as well as I can for here. But owner occupier residential, is pretty much on fire around Australia, you just have to read the the stats or read the read the reports. And we know what that's all about. And that's fueled by liquidity, I think people do have pretty decent liquidity. And it's fueled also by incredibly cheap interest rates, which makes affordability less of an issue than it has been in the past when you're paying six, seven or 8% on your mortgage, and you're currently paying two-ish percent. And that makes it incredibly affordable. So I think the markets in not bad shape.
But if you look at where the institutional money's chasing, it's certainly logistics and therefore industrial. Next is office and it's a premium grade city. And also, in some cases, suburban, which is looking pretty good retails been the the outlier retail, if you remember, we know, you know, the best performing sector and the real estate market over the last 30 or 40 years. But we were seeing a change happening because of e-tailing. And because of a change nature of how retailing is conducted.
And I think what we did is take about 10 years of change and put it into a year and that is affected the top end in particular, this the regionals and Super Regionals and the winner there has probably been the neighbourhood or has been the neighbourhood and convenience retail, which is still pretty strong. And whilst the institutions don't play as much in that as the other end of the market, that's been we've seen that to be particularly resilient, a lot more resilient than I thought it would be. And I suppose when you think that people are going out to dinner, and they're eating at home, then they're going to go to their local supermarket, they're going to get their local shop, it's it's convenient, as the Word says, but it's also a lot safer than big regional malls. Perhaps where you're mingling with a lot more people.
And that COVID impactors certainly come through any sort of Coles results, just this week, which sort of endorses my comments. So they're all looking good, we've had very low interest rates, and therefore the margin of on bonds for real estate yields has never been higher. And that is driving a lot of demand globally. And if we look at ourselves in a global context, we've got, you know, a very good legal system where, you know, sovereign risk is basically zero. And as a consequence of that, a lot of the major institutions around the world, the sovereign wealth, funds, etc, and the big pension funds, see Australia as, as a good place to invest. You know, we've got low vacancies in comparison, a lot of places in the world, we've got an economy that's, that's moving forward. We've been very lucky with our mining, of course, that doesn't occupy a lot of space, but it does pay a lot of wages.
And therefore, people have been well rewarded by working in that sector, and that's underpinned what we're doing. And we've also had of, we're lucky enough to have some pretty good harvests and, you know, stand out performance of sheep and cattle, etc, etc. Notwithstanding a certain trading partner that's not taking certain things were that that that whole sectors pivoted away from that and we're finding markets in other parts of the world. And we feel like we've probably been lazy in just accepting that's the easiest market to be in. And now we gotta go hunting a bit. Australians are pretty good at hunting.
Rob Langton 09:18
What structural challenges do you see for the property market over the medium to long term and how should companies be positioning themselves to weather some of those challenges?
Greg Paramor AO 09:27
I think there's one front and centre at the moment, obviously is with the COVID. issue is Will people come back to the cities will they support a city environment, which is not just office space, but it's everything that services the office of the space users, their cafes, restaurants, the bars, there's, you know, doctors and dentists and everything else that goes in between plus retail and that vibrancy that we've been used to in our city in our cbds and major regional centres is under challenge a bit at the moment. My feeling is that we will get back to normality. It will take a couple of years, some industries and some types of workers, in some organisations have realised that they don't need the office space that they used to have. I'm talking particularly about, you know, call centres, for instance, where you can monitor a worker in terms of output, etc, very easily, electronically these days, so you don't have to be in one spot.
And companies have been doing it elsewhere in the world for decades, really, Southwest Airlines out of the US have, like it's been 20 years where their whole workforce are everybody doing a bookings, they've heard of predominately female workforce spread around America, they set that up decades ago, and never had to put a call centre in so I think some of those industries will change. But I think it's very hard for people to learn, and therefore companies to grow and nurture the young up and coming people on a zoom call. It's very one dimensional. And it works for a while or worked incredibly well last year, if you are blokes like me had to learn how about electronics very quickly and very frustratingly. We got through and and it was fantastic. I mean, you know, the the spirit about still conducting commerce.
Last year was was phenomenal, I thought, but I think people will need to come back to the cities, but that is a challenge. And will people, a lot of large organisations are talking about whether people can, you know, be two days here and three days at home, or vice versa, etc, etc, I think part of that is here forever. And that's going to change the dynamic of office usage.
At the same time, I think social distancing is probably here forever, too. And I think people will be very wary to go back into the battery hen type of space that we used to have, and there will be more space per human. So that might be a compensating factor that's going to challenge that the flip side of that is we still have relatively high take up space. Our vacancy factors in Melbourne, Sydney is sub 10%. I always go on market equilibrium is 10 percent's fine, you don't want to be much higher than that Brisbane and Perth are heading towards 20% I'd call that a higher risk.
And then some of those other challenges, electronic challenges if you like or internet challenges, where how much space do we need? Or can we move to more e-retailing and, and other forms of remote work and those sorts of things, I think that's a big risk, or serious thing that's got to be addressed, I have some views or express them that I think people will go back to wanting human interaction, I just don't think even the whatever the generation is coming through, the first thing they do, I find myself doing in the morning is you turn on and you don't need to communicate with anyone but you really very hard to conduct your life like that. So I'm optimistic about that.
We've got some challenges geopolitically with, obviously with China and their issue with us. And I guess ours with them, I'm not qualified to say how that's going to play out. But obviously, we've got to pay attention to that. And I'm sure our government is paying attention to it. And we have some other geopolitical issues, you know, around the world that are outside our control. So that's that that's always a constant, you know, we can do certain things internally. But at the end of the day, if the world moves in a different direction, or for whatever reason is there's an incident, then that's going to obviously impact. But taking that off the table, the headwinds, just one really of getting Australia back to work. And I think, and I know the Morison government is working hard on this is saying, Let's get back let's For heaven's sake, stop just digging stuff out of the out of the ground and putting on a ship. And I've been saying this for a long, long time, I've seen it as a Western Australian, or former Western Australian, you know, I grew up with that, that started the iron ore boom, back in the 60s and the whole mining thing that that grew up at that time. And it's always been frustrating that we haven't been up to value add on the way through. And I know I hear people talking about that. I'm very keen for that to happen.
And the other very opportunistic thing for Australia is, there's a lot of wealth. There's a lot of companies, there's a lot of people that are looking around the world and they're living in the US or they're living in parts of Asia, or they're living in parts of Europe. And they're saying is this world what my children grew up? Is this where I want to be? And we're starting to hear about it now where people are starting to want to come to Australia, immigrants with big ideas, lots of wealth, and lots of ideas that can help this country get to where it needs to which is to be a very high end manufacturer or manufacturer of high end, highly sophisticated and challenging things at the right time.
But particularly in medicine and you know, other other areas that we can, we can really excel at because we do have one of the best education systems in the world. We have a country that's, you know, a very safe place to live. It's right in this right spot, really in between the Indian Ocean and the Pacific Ocean. And with Asia to the north, and to the west of us. We got South America and the USA and Canada to the to the northeast of us, of course. So I think we're in fantastic shape. So yeah, there's issues but I'm, I'm very optimistic about our future.
Rob Langton 10:19
You touched on it there. Let's discuss Greg Paramor, the person you're born in Western Australia's Margaret River. Take us through your upbringing and your earliest memories.
Greg Paramor AO 15:44
I was born in Margaret river and I didn't grow up in Margaret River, my father and his brother actually went farming after world war two they were returned service people and chose after a period of time to lay that so I grew up in the southwest of Western Australia, in Perth for a period in in country areas near Perth. My father was stocking station agent, so he tended to be transferred from one place to another.
So it was a normal upbringing. I was my brother's 10 years older than me. So I was a bit of an only child, which may be quite selfish. If you talk to my wife today, you know, that's just the way it is. But now I had a I had a pretty normal upbringing, nothing out of the ordinary. And you know, when I look back on it was interesting, but I probably should have achieved more out of my, my early life and I did a bit of a bookworm. And I'll probably, you know, should have what you don't know you, you can't work on but you know, it was it was pretty happy.
Rob Langton 16:38
You did have a unconventional pathway into the property industry, though, in that you left school at age 17 to join the workforce. Take us through this period of your life, and why are you so eager to leave school and start working?
Greg Paramor AO 16:50
I didn't know what I wanted to do at university. So I was sitting at home and my father said, I think you need to go and buy some shirts. I think he might have organised that. And it organised for me to start and this was in a little country town called Beverly in Western Australia and the local bank, one of them was the ANZ. And so I found myself fronting up the ANZ Bank One morning with a fellow that was the branch owner Mr. T, who turned out a friend of my father's to but turned out to be a fantastic teacher, and a wonderful man.
So I had a 12 to 15 months there. And then I moved on and I wanted to get away from the country. I want to get to the bright lights of the city all 800,000 people in Perth or whatever it was back then. And I joined a finance company, Lombard and I was with them in Perth, and then moved to Melbourne for a stint there. So that was my training. I did a number of diplomas and things along the way, but I never went unfortunately, probably never went back to university, which I probably should have. But anyway, that's life.
Rob Langton 17:50
following roles in finance in the rental car industry, you purchased your first business, the news agency at age 21
Greg Paramor AO 17:57
done your homework.
Rob Langton 17:59
How did this opportunity come about? And how did you find the experience of running your own business
Greg Paramor AO 18:04
Well, that was a family thing. I was living on the east coast and I think my particularly my mother's decided I should be home so they bribed me with some money for my brother and I to go into business together which was which worked okay for a while. I didn't last long, took people 10 years apart with totally different perspectives on life, one being 21, which was me and my brother being 31 with a couple of kids. But that all worked out and we're still good friends.
So I moved from that and I was sitting on a boat I had and I thought I better go and get a job and I applied for a job in in leasing, which I actually thought was finance leasing, which I knew a bit about. And so I applied and found it was a commercial real estate agency called Miller and company which became Knight Frank, down the track and fortunately, I got the job and and that was it. I just, I just fell into an area that I just really loved. I loved servicing my clients and I was in leasing mainly more than anything else.
And we did all the modern office buildings of 1973 I think and there were three new massive 33 level towers in Perth going up so it was interesting the first regional shopping centres. We did Karrinyup up shopping centre, there was Carousel on the south side and, and lots of industrial So I sort of got into commercial real estate, went to night school just decided this is what I want to do for the rest of my life. I loved it. So I did some training as you need to do but I also you know trained on the tools to where and really got involved in in the cut and thrust of it was great getting to leasing because you you get to undersell what people's businesses because you're actually leasing them either retail and getting to understand what the business dynamic is getting into offices as to why they're there, why they're expanding why they're contracting what they do, and industrial was it's own will be that was smaller sheds back then. So that was fantastic. And that was, you know, that's how I stumbled into, into this area.
And then from there, after seven or eight years, one of the directors had left that firm and was developing and is known as Dick Lester. And he invited me to join him. And I did that. And we did a range of developments from Karratha in the Pilbara, which was all about iron, iron ore and, and gas and salt and stuff to small retail and some commercial and some some residential. And from there we developed, which was Dick's idea, but Growth Equities Mutual, which was one of the new breed of unlisted property trusts, which we launched in 1981.
Rob Langton 20:46
In 1981, as you said, you founded company Growth Equities Mutual with Dick Lester, what's what was your mandate?
Greg Paramor AO 20:53
Well, in that those days, we were developing, and we said, Gee, if you looked at those that have been successful, was really LendLease and GPT. Because LendLease developed it and G and put it on GPT's balance sheet. So that seemed to be a pretty good model. And whilst we were developing little things, we thought we have a fund that will allow us to, you know, control our destiny rather than put something on the market. Now bear in mind back in 81, 82, 83. Interest rates were well in the teens. And when we launched GEM in March 1982, I think it was interest rates were 21.5% was the bill rate. So you try making money out of real estate when you're when you're rolling bills, 90 day bills at 21 and a half percent was pretty interesting. Somehow we got through that a lot of people did alot of people didn't, should we go listed? Should we go unlisted?
The institutional market just was nothing like it is today. It was dominated by by AMP, national mutual, city mutual or the mutual life companies, they were just getting into investment property in the late 60s, early 70s. And now we're just discovering the cash flows that you get from, from these types of investments, we decided to go into the retail investor market and go unlisted.
So the growth equities mutual property trust, which we grew over the 80s, first year, we raised 4.4 million. By the year two on I arrived over here, we had 20.3 million under management. So they weren't big numbers. We didn't eat a lot of caviar, we certainly didn't drink any bottled wine. And, you know, it was food parcels from parents in the country and Dick would kill a few of his cows that he had roaming around. And I'm not joking. That was the way it was. So that was it. So in 84, I moved over here, we just said if we're going to make this work, or one of us have to come east, and fortunately, he had kids at high school, and we had a firstborn. So Kerry, and I came over in 84, for a couple of years just to see how it was. And it was 36 years ago, whatever it is. So it worked. And we grow GEM from zero to about one and a half billion of equity and no debt. By the time 1990 came around, which was the crash in 1990, which was pretty, pretty horrendous. But we sort of managed to get through that and then I moved on to do other things.
Rob Langton 23:22
As you said they just over 10 years later in 1992, you sold your stake in the fund by which time it had become Australia's largest unlisted property trust worth around 1.5 billion. How did you manage that level of growth year on year?
Greg Paramor AO 23:36
A lot, a lot of heart a lot of sleepless nights. It was you look back back on those things? Yeah, how'd we do that. But I don't know. We grew It was Dick and myself and one and a half people at the beginning. I think we had 200 staff at the end. And we had an office in Brisbane and one in Melbourne, one here and one in Perth. And we're pretty lucky we hardly turned over any staff. You know, we had terrific people were able to recruit really good people. I think one of the key things about that our business was we put our investors first which when the crash came in 90, 90, 91 we had a very honest communication with our investors about what was we had 80,000 of them what was right and what was wrong and what's happening as best we could answer those were a lot of our competitors didn't, didn't speak truthfully to their their investors.
That's still perhaps the case today. In some cases, it was a great marriage between Nick and myself and energy who he stayed in Perth. Although we both travel a lot. We just build it brick by brick. I think when you are at the first time, first time when you're doing the first distributions cheques were done on my lounge room floor will Kerry and I were putting them in envelopes and posting, weren't many of them poasting them out. You can sort of do that. I was really excited. It was fantastic.
Rob Langton 25:01
KNext came the launch of Paladin in 1994. One of your acquisitions during this time was Melbourne Southgate towers walk us through this particular acquisition and also Paladin as a business was a different to growth equities.
Greg Paramor AO 25:15
Yeah, what I had, I had a very fortunate time then because when I sought out of gym and before I started peloton, I had a time where I just, you know, you work hard for a long period of time living 12 years with with GEM and you're pretty exhausted and you know, had three kids stage I had a Gary had all the nurturing lot different these days, but she did a great job and and I was lucky enough to not have to go and get another job. So I just did sit down and write down everything that was on my mind at that time, everything had gone through your mind in that whole build up. I wonder if this you know, should I be doing this? Do I really want to do this job, all those things. And I was 41 or something. But he too. So I had the luxury of time. And I just took that time fortunate I wrote all that down.
And when I got an i scrubbed on my whiteboard, and I scrubbed everything off, I ended up with two things with the funds management and property, which I'd already been doing, although Well, that's what I'm going to do next time. And I then took a year off. And during that time, you know, was fantastic. Because I got to know my children, I got to my wife, my wife a lot better. And I had the luxury of just, you know, sort of thinking it through I didn't know, when you first find yourself, by yourself, there's a tendency to rush in and do the next thing to kill you. You're that age or my temperament. And I was lucky enough not to do that.
So I looked and we thought and Rod Lever who'd worked with me before join me and he co founded Paladin with me. And we, we looked at the marketplace. And I felt that the unlisted markets were very tarnished from what happened in 91, 92, 93. And there was a lot of a lot of issues around the whole unlisted structure, which is another topic for another day. But we had some issues with the regulators back then why they are structured, etc. But jam. Fortunately, we got that through that pretty well for our investors, not without pain, but with a lot less pain than a lot of others. So the market was moving to listed. So that's what I was attempting to do. And we attempted to list an industrial fund and interest rates got in the way that we had.
We were looking at the accommodation industry with hotels, we we ended up pulling out of that. And I actually got a call from Westfield, who's said, Why don't you pop over and have a chat, which I did because I knew them reasonably well. And they were wanting to buy a particular asset in Victoria. And part of that deal was doing Southgate and they knew that I was setting my business up. They didn't want to do that because they retail not might had a little bit of retail but not a lot.
And I was able to convince the vendors that we were worthy of support, and we set about on a conditional contract to have a capital raising and had the listed Paladin commercial trust, which launched with Southgate we created the Paladin industrial trust as well, because the market had moved that way. At the same time. We also recognise the syndicate market we're starting so we had a number of syndicates we launched. During that time, we had a very large rate securities fund.
GEM had been the first group to start up property securities fund to bridge the unlisted unlisted markets together with a universe of 15 stocks, and then I created a paladin, probably securities fund called refunds. And we raised about a billion dollars, I think, for that some institutional some some private, so we moved from just the pure retail investor market to the institutional market was backing listed. And we grew Paladin over six or seven years to bet two and a half billion or whatever it was.
Rob Langton 29:03
And by this stage in for a second time in your career, you grew Paladin, as you said into a multi billion dollar business before selling to deutche asset management, which later became dexus. What was involved? Do you think during the growth stages of that business? Have you there's two times in a row now that you've managed to grow businesses into multi billion dollar enterprises? How have you gone about that, and particularly in the Paladin case?
Greg Paramor AO 29:27
I didn't write the script on either of them. We tend to write the script after we'd done it. But it's it's backing. I think your judgement that what you're doing. Reading the market, knowing what the market wants is one of the fundamental things that you need to do in funds management. No matter what you're doing, particularly real estate. There's no point in giving people something they don't want. And in 1994 five, I was trying to get Paladin off the ground they wanted listed or liquid securities so that was point 1.2. Once again, you always got to get good people If you don't have good people, and people with the right attitude and the right approach to their investors as well as the job in hand, Rod was a terrific co founder, his, he did, he did what I couldn't do and probably vice versa.
So it was a great partnership for that period of time. And once again, we built a team of people around us that you know, we're pretty good. We didn't have too many failures. I think also, I've always been a great believer in having fun when when you're doing this. And I don't mean what's having fun? Well, I just love what I do anyway. So that makes life easier. And you're gonna gather people around you that I think you automatically get to people that want to share that that vision that opportunity, and I was able to get good people you get good people and you have a crack at it you probably got a decent chance of getting it provided that you make sure you understand the market you're in he makes sure you know the investor market you make sure we know the property market and you're prepared to pull out of things as well.
Rob Langton 31:04
Less than a year later you then launch James fielding group your third business headed this business differ from Paladin and Growth Equities.
Greg Paramor AO 31:12
First of all, it's a stapled security, which a lot of them most of the big funds are now big groups are so we stapled a trust. So I had a little What didn't what deutscher didn't buy was a little trust that I had a joint venture with with a couple of friends of mine in Perth, called the PA property trust, and they were keen to sell so I bought them out of that $60 million fund. And we used that as the launching pad for James fielding, and that was to have a stapled security where you had the trust and the company stapled together an opco prop co arrangement, that's all a norm. The only ones that were there ahead of me was Stockland. Who had done that for tax reasons, years, years and years before and Mirvac followed because they couldn't get traction in their pricing of either their trusts or their company by bolting together did.
And I thought that was an interesting way to go and something I believed in. So we did that. And my aim then was to have a capital light model. So we didn't want to swamp it with capital raisings, we created funds off the back of that. So we built that quite rapidly, I guess over a few years from whenever it was 2001 to 2003. Yeah. So we Yeah, it was a $400 million market cap with about a $2 billion development pipeline and about a just on a $2 billion funds, pipeline, various things at that time as well.
Rob Langton 32:42
Nearing its three year anniversary, as you said James Fielding group with you at the helm was purchased by Mirvac in a $478 million deal. What are the fundamentals required to position a company as an attractive takeover target? And what are the ingredients to effective decision making?
Greg Paramor AO 32:59
I've never, I've never started a business with the idea of selling it. But I've learned that if somebody has a greater need than you, then, you know, perhaps that's not a bad way to go. There's people who have very different views that want to keep one thing and just grow it and keep it there forever. I've never been an active seller or never created James fielding or Paladin or GEM with GEM I sold out of but then sold it to LendLease a little later. But I've never created anything that I've said I'm going to sell this in three years time or five years time. I wish I still had GEM, you know, that's what I probably wish circumstances lead you to do different things Paladin it was market. What caused us to look at that was institutions were making it harder for him to independence like us to have a management company that owned management rights of a trust that was listed. So they could john by 20% on market and then kick you as manager. So that's very damaging in terms of your hip pocket.
So when deutscher came knocking, I thought that was a good opportunity to see what they had we, we did a deal directly, we didn't go and shop it. Some people would do it differently. They try and get maybe another Penny or two out of it. But I was very happy to take the price that we negotiated was good for the shareholders. And therefore me and I felt also very good for the unit holders. Because first and foremost, if you put your investors first you staff second, your new third, you probably win. If you put yourself first and everybody else somewhere else, you know you might win but it's a shallow win if you like because if you've got to look after your investors first.
I'll do it that way back when during the crash in 1990. We really had focused on our investors, we'd build up a lot of cash reserves, we had no debt. You know, we're in really good shape despite the fact that the market topple over that, you know, maybe you could see coming but most didn't. So back to the to where we were with James fielding. That was Mirvac knocking on The door, the people that had been there, particularly Bob Hamilton, asked if I'd be interested in buying James Fielding and me my team basically taking over the management of Mirvac because they wanted to retire, plain and simple. It wasn't on the agenda.
A matter of fact, I'd had a time away of my board a few months before, Bob made the approach. And I was talking about handing over to my 2IC, and starting to step back and taking it easy a bit. I was very young, then I was ridiculously too young. But that and then move out came knocking. And I thought, why not, I think this will be great for my shareholders, they're going from a sort of $400 million business to a $3 billion business. I did like Mirvac, I'd respected Mirvac. So that they that was great for the investors, for my staff, they all got really good jobs out of it, and ended up doing great things, either there or moving on to do other things. After a period of time, I got to run a large company, which I never set out to do in my life. But it was interesting and challenging, and an unload a lot and hopefully, hopefully did some good. along the way.
Rob Langton 36:07
You became the CEO of move back in 2003, and led the business for five years until 2008. What's it like being the CEO of an organisation of a company of that scale? And how would you evaluate the strength of the business today,
Greg Paramor AO 36:21
I think it's very different to go in, when it's been sort of run by one group of people for 20 plus years. So because I and whether they wanted me to make changes or not is a moot point. But I felt it needed changes, and I had a direction that I wanted to take. And it was pretty hard to get all that to happen, because people get very set in their ways. And I saw now we've always done it this way. And this is why we want to continue to do it. It's just a mental thing. It's the way it is. So I found it quite frustrating. In some ways, I made changes as I could, but you're steering a pretty big ship that takes a long time to turn around.
But we managed to, you know, do some innovative things. And I'm very much focused on the funds, funds management, side of real estate. So I've pivoting Mirvac. To to that, to that way of thinking. And that's continued, which was great. And there are some other initiatives there. So it was a lot a lot to do, leading up to 2008. When we had the GFC I'll be judged by others because I I enjoyed it, it was challenging. I hope I did some decent things there. And you know, that surprised during the my journey was reflected that the business was going well, I had given notice to my Chairman, two years before a year and a half before I left that I wanted to wind back in a couple of years because it was time to move on. I retired just just before the GFC was well and truly underway.
But it really bit after I left I left it with Nicola Shahi who took over for me. It was with me at the James fielding and, and before and I need a very, very credible job of taking it to the next stage and also turning its course more to office which has been very beneficial to the company. So how's it going? Now? It's going really well, I think Mirvac's a great organisation, it's well lead, well governed. And I think it's, yeah, it's a household name pretty much and you're doing a good, credible job.
Rob Langton 38:20
What's your reading on the asset class mix of large listed Property Groups today? Do you think they're underweight or overweight on any particular sector?
Greg Paramor AO 38:28
Well, there's sector specialists. So you know, you've got a lot of overweighting if you if you're only in office, or your only in retail, if you take Charter Hall, you know, it's been de-weighting, it's its exposure to retail, but up-weighting its exposure to industrial logistics and office over the last few years because David Harrison, who is second to none in terms of, you know, the ability to manage that ship. He's been moving that that way. And that also reflects in part what I was saying earlier about what people want, you got to respect what your investors want. And charter hall with nearly 50 billion of funds under management is really responds to the needs of its community of investors, both wholesale and retail, and obviously takes its own view, which is debated widely.
And as a board member, we get to discuss it and interrogate whether it's the right course of action, but it will move where it needs to be. So the sector specialists for those that have chosen particular paths, and there's a number of the middle office and regional malls. They've had a bit of a tough trial. The pure office funds, similarly have been beaten up a little bit over the last 12 months probably offered some pretty good value. The pure industrial ones have been well bid because everyone wants to be an industrial at the moment.
The beauty about that is investors coming in into the listed market can pick and choose what they want and you can get whatever you want out of A range of stocks that are listed on the market. So you make up your own portfolio or you can buy into a diversified fund like I'm selling my book here but charter charter hold long well rate which is focused, it's got a lot of industrial offers some retail, particularly convenience based retail and other specialised, long, long while long leases, government backed etc, etc.
Rob Langton 40:25
And your involvement in charter Hall came through via Folkestone limited, which was another company you founded in 2010, and sold to Charter Hall group eight years later in a $205 million deal making you a non executive director of Charter Hall today.