A 460-property portfolio and little interest in profit

Managing a portfolio of more than 450 properties is not your ordinary real estate investor profile.

Overseeing a property portfolio of this scale with little interest in generating a profit is even more unusual.

For Lavinia Dack, Group General Manager Property at UnitingCare Queensland, managing a portfolio comprising 47 aged care homes, 39 retirement villages, four hospitals, 130 Lifeline retail outlets, 11 warehouses, plus call centres, many offices, residential buildings and developable land, is all in an exhausting day’s work.

As a not-for-profit charity organisation, the emphasis of their property portfolio is on delivering community services rather than investment returns.

A limited number of UnitingCare Queensland properties are retained primarily for their value as an investment. There is also an eye on the future, with their portfolio also including some properties primarily obtained to ensure they can provide the right buildings and grounds for growth in the years and decades ahead.

Ms Dack told API Magazine that their primary business model is to the develop property as an owner-operator.

“For example, we are currently completing a new aged-care facility, BlueCare Sunrise Beach (located in Noosa Shire), which will open in the next few months.

“Because we are the long-term owner and operator, we prioritise quality in both the design and construction and carefully consider how the buildings can be used as models of care evolve.

The team she manages is made up of 125 people, including leasing agents, valuers, development managers and a large maintenance team.

She said they were always looking for innovative ways to deliver property projects.

“The Sunrise Beach development is unusual, as we own the adjacent site and have partnered with Keyton (formerly part of Lendlease) to build and operate a retirement village.

“It’s a unique partnership in the property sector, where we have blended a not-for-profit social service organisation built on compassion with a leading private sector retirement living developer.”

While profit isn’t the driving motive, like any organisation it needs to deliver financially sound outcomes.

“Since I’ve joined UnitingCare, we have substantially increased proactive management of our property portfolio and we are currently investing in refreshing many of our existing hospital and aged care assets, lifting our property management and maintenance capabilities and have new developments in planning phase.

“I’m confident we’ll continue to unlock value and build increasing returns for the organisation to support the work they do.”

Oxford University and a strategy with a difference

Ms Dack was last week announced as the inaugural recipient of the Woman Leader in Property Scholarship from the Property Council of Australia and Chief Executive Women.

She will now undertake an advanced professional development program at Oxford University alongside a $25,000 grant, covering both tuition expenses and a travel allowance.

Education at one of the world’s most prestigious universities seems a worthy undertaking for someone who has to manage such a diverse, valuable and complex property portfolio.

But like any property investor, a strategy needs to be put in place that considers income streams and sell or hold decisions.

“My team plan, build, maintain and manage more than 460 properties throughout urban, regional and remote locations across Queensland, as well as supporting some Northern Territory operations.

“With such a large portfolio comes lots of opportunity to unlock value from underutilised sites.

“We have reviewed the entire portfolio and prioritised the development opportunities, which we are now progressing. 

“Where possible, we seek to establish annuity income streams so that we can support the organisation’s long-term sustainability.

“This means we have a preference to retain rather than sell, however, we do sell where is makes sense so that we can reinvest the capital into our core assets.”

She added that the organisation also has a large leasehold footprint in Queensland, including 130 Lifeline stores. The stores are largely volunteer run and are essential to funding Lifeline’s crisis counselling telephone service.

Property management more sociable than engineering

As an ebullient personality who now plays guitar in a multi-generational band, the property sector came calling to a young Ms Dack after she’d started her career as a mechanical engineer.

“I was far too outgoing for engineering and fell into property when I spent a few years in London in my 20s and never looked back.

Her career has since spanned those beginnings as a mechanical engineer, through project management, business case development, portfolio management, transactions, leasing and asset management across a wide range of sectors, including health, aged care, retirement living, industrial, manufacturing, residential, urban renewal and transport.

Balancing her current demanding and diverse role with home and personal interests is no easy feat and the lines often blur between the recreational and professional.

“Much of my free time I spend with my Property Council and NAWIC volunteering roles, which although linked to my professional career is also social time and an opportunity to engage with other passionate people.

“It’s important have some down-time and I have a passion for music and am in a band with friends who range in age from 17 to 70! 

“We play a wide range of music and I enjoy how through music we find common ground between people of different generations and backgrounds.”

A supportive husband and 12-year-old daughter are also at the centre of her non-professional world.

People before property profits

Asked about the differences in how a not-for-profit approaches real estate investment compared to private or corporate investors, Ms Dack said they were selective and sought value but had a greater purpose than making money from property.

“When choosing to invest in a new property development, we consider the business case for the services that will be delivered, as well as the business case for the property investment.

“As an organisation, this is a wise approach to make sure we prioritise our investment in a way that aligns with our purpose.

“As a long-term owner-operator for most of our properties, whole-of-life costs are more important to us than they are with a develop-to-sell model.

“We are currently working to lift our asset management capability so that we get the best value from our assets.”

She added that their property activities were delivered in that context, rather than purely for property development purposes, which is both a constraint and an opportunity to make a positive impact.

“We carefully consider the impact of our property activities to delivering the organisation’s mission to support the wider community, which means we are selective about the type of development we deliver and who we partner with.”

Lobbying government to address housing crisis

In the face of a chronic housing crisis, UnitingCare Queensland is front and centre when it comes to engaging with the government to find ways to deliver appropriate homes for everyone in the community.

Research commissioned by the Retirement Living Council in November states that there are approximately 2 million people aged over 75 around the country, which is expected to increase by nearly 70 per cent to 3.4 million over the course of the next two decades.

Australians living longer is a contributing factor to the housing shortage.

As a senior manager for a major seniors’ accommodation provider, Ms Dack said state and federal housing supply incentives have focused on social and community housing supply, which is an important priority, but only part of the solution.

“Community housing providers do a great job, but they can’t solve the housing crisis on their own.

“Retirement living operators are poised to deliver new affordable housing stock, but like most sectors of the property industry, we are struggling to make feasibilities stack up against the headwinds of high construction costs and high financing costs.

“Retirement living could play a much greater role in solving our housing crisis, but we need positive initiatives including meaningful incentives.”

The forces driving the residential property market were also impacting her sphere of housing provision.

UnitingCare is seeing increasing demand for retirement living product, but limited new supply, preventing seniors from downsizing into housing that is appropriate for their changing needs, and keeping them in large homes that could be available for families.

Ms Dack pointed out that retirement communities are designed to provide an affordable option for older Australians, with entry prices on average 48 per cent lower than median house prices in similar areas.

“We need to take strong actions to make a difference as housing continues to be a challenge.”