Urban Melbourne's chat with Neometro Director James Tutton continues, following the first part published earlier this week.
Neometro was the first property developer in Australia to gain B Corporation 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 - B Corporation 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 3000 acres, Slopes Gallery and Place Holder 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.
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.
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!