Danny Murphy’s career has tracked the development of Ellenbrook.
WHEN the first train pulls into the station at Ellenbrook some time in 2024, it will signal more than the end of an inaugural commuter trip from the city centre about 30 kilometres to the south-west.
The longer journey will have been that of LWP Group chairman Danny Murphy and, to a lesser extent, the handful of investors who backed him along the way.
Mr Murphy came to Western Australia from Adelaide in 1992 to join the fledgling project, which was then just a vision driven by the golf fanatic owner of Japanese development firm Sanwa and a state government keen to open Perth’s north-eastern corridor.
Ellenbrook was then, for all intents and purposes, a stranded asset.
At the suggestion of (then) leading WA golfer Graham Marsh, Sanwa had developed neighbouring golf resort The Vines, which was completed by the late 1980s.
Following that project, Sanwa had been left with 600 hectares of undeveloped land cut off from the rest of Perth by Whiteman Park to the south, the Swan Valley to the east, the Gnangara pine plantation to the west, and farmland to the north.
“It was a fifteen-kilometre drive to get a bottle a milk,” Mr Murphy said.
Even in the earliest public prospectus, with affirmation provided by newly minted premier Richard Court, who had been elected in February 1993, a commuter train is pictured proudly on the cover’s photo montage.
It has been a long time coming.
About 10,500 lots have been sold since Mr Murphy’s arrival and during the subsequent 30 years.
A town centre has been developed and 10 schools built, alongside all the other infrastructure required for the young locale.
On the night of the 2021 census, Ellenbrook had 8,901 dwellings and 24,668 residents with an average age six years below the state and national average of 38.
There are just 500 lots left to sell from 11,000 planned. Mr Murphy expects them to all be gone over the next two to three years.
“We will sell our last lot the day the train arrives,” Mr Murphy told Business News.
It is a sore point, although he does not gripe about it, preferring to acknowledge the current state government and its commitment to the Metronet public transport infrastructure, which is expected to deliver the completed railway within the next two years.
Here, Mr Murphy credits Transport and Planning Minster Rita Saffioti for her role in pushing for the infrastructure.
As it happens, Ms Saffioti’s West Swan electorate includes the southern third of Ellenbrook, a change that took place prior to the last election due to a redistribution.
Before that, a railway to Ellenbrook was the subject of many election promises, and retractions.
Former Labor premier Alan Carpenter pitched it at the 2008 state campaign, only to be matched by his opponent Colin Barnett, the ultimate winner.
The victorious Liberal government led by Mr Barnett instead opted for a rapid transit bus option before losing to Labor in 2017.
Labor campaigned on the train link as part of its Metronet rail infrastructure policy.
Ownership
The most perplexing thing about governments’ reluctance to commit to Ellenbrook in terms of transport infrastructure is that the state owned half the project and considered it the key to unlocking Perth’s north-east.
The original vision was a joint venture between Sanwa and state government agency Homeswest, an earlier iteration of the state’s Housing Authority.
Each owned half of the 1,200ha project.
In the Ellenbrook prospectus, Mr Court described the development as fulfilling a strategic need and taking a leadership position in urban development in Australia.
To highlight this early example of a public-private partnership in WA, the state government pushed through the rezoning of the land in late 1993, despite protestations of people who lived in the vicinity of the new town and enjoyed their bush blocks in relative proximity to Perth’s central business district.
Mr Murphy recalls how black-robed anti-development activists marched on parliament to voice their opposition to the project.
However, he said their protests ceased once the rezoning had taken place. Not everything changed in the area straight away, though.
John Roberts, the founder and then head of construction giant Multiplex, had a significant landholding in the area, including the Egerton Stud, which he used as a rural escape.
He declined to be part of the consortium, but some of his holdings later became part of Stockland’s neighbouring Aveley project immediately to the south of Ellenbrook.
The evolution of Ellenbrook’s ownership took a major turn in the late 1990s when the Japanese parent of Sanwa went into administration and cut its pet project adrift.
In early 2000, with the WA economy looking worse for wear, Mr Murphy pulled together a syndicate under the LWP name, which stands for ‘live, work and play’.
His backers were a couple of Sydney-based listed companies and some high-net-worth Perth families.
Except for the holding of one of the east coast investors, they remain the same today.
The government’s direct involvement in the project did not cease at land ownership or the general provision of infrastructure.
Insurance Commission of Western Australia, the state’s agency to administer third-party motor vehicle insurance, acquired Ellenbrook’s major retail site in the mid-2000s and developed a shopping centre, which it sold to Vicinity Centres in 2015 for almost $222 million.
Blank canvas It would not be hard to imagine what Ellenbrook looked like to Mr Murphy when he arrived to take on the key role at the project.
He came to WA after more than a decade with Delfin Property Group, an Adelaide-based group that had been a bank subsidiary until it was sold to institutional investors and was planning a stock market listing at the time.
Even now, Perth is surrounded by vast tracts of land on its coastal plain that have been cleared for agricultural purposes.
But for those who have lived here long enough to witness it, the tapestry of sprawl has been stitched together piece by piece as Perth has expanded outward.
In the main, each new suburb tapped into the infrastructure established by the neighbouring development that preceded it.
Ellenbrook did not have such connectivity with the existing fabric of the metropolitan area.
As a result of this isolation, splendid or not depending on your point of view, the developers needed to show some creativity.
“The provision of the ‘fiscal’ infrastructure could be worked through with water and main roads,” Mr Murphy said.
“The challenge was getting cultural infrastructure, that lagged.”
For instance, he said one of the first obstacles was the lack of schools when it came to attracting young families, the lifeblood of many new developments.
To address this issue, the developer used a collection of new dwellings, with fewer internal walls, to create a temporary school.
“We built the first primary school in eight houses,” Mr Murphy said.
“We could open the first school in 1996 with 47 students.
“That quickly grew to 300 students and that is the threshold to open a permanent Education Department school.”
There are now 10 schools, either primary or secondary, that service Ellenbrook within the development or just next door.
“The first high school was important, but we now have two government high schools and two private schools. That is a big driver for us,” Mr Murphy told Business News.
“Education is very important to people, and we have worked hard to attract a range of education providers.”
It was not just education where the project partners had to take the lead.
The Ellenbrook joint venture built the first shops, childcare centres and doctors’ surgery, initially focusing on the first of several village or neighbourhood centres that came well before the start of construction for the main town.
“That 1,200 hectares has been a wonderful blank canvas for us to work on in terms of urban settlement, to keep pace with the trends and allow Ellenbrook to consistently sit in the top three selling projects over years,” Mr Murphy said.
Mixed-use development emerged in the 1990s and the 80ha town centre site was enlarged to allow for a graduation of urban change, with mixed-use areas buffering the major retail centre from suburban housing.
“We took the decision back in the 1996 amendment to increase the size of the town centre to 150 hectares to give us land to address what was an emerging trend,” Mr Murphy said.
“That is important when that concerns projects you do a lot of years ahead; you need room to change and the canvas to work with.”
Experience
Mr Murphy acknowledges one of the challenges of working with a blank sheet to start a 30-year project was that it came with inherent risks of getting things wrong and picking a direction that might have negative consequences over such a period.
He said it had been important from the start to gather a team of people who had studied the specialist skills required across the whole gamut of urban development.
Mr Murphy said the LWP team also spent a great deal of time learning from the best.
Overseas study tours were taken and expert offshore companies were used to review the opportunities that LWP had before it.
“Over 30 years we have constantly sought out the latest trends in urban development,” he said.
“We continually tested the project’s currency with market trends; the project has continued to be recognised in awards, notwithstanding development commenced in October 1994.”
Aside from mixed-used development, Mr Murphy points to Ellenbrook’s leadership in recent years in the development of micro-blocks, offering lots as small as 80 square metres at the heart of the development to provide affordability and improve density around transport nodes.
The push towards density came as housing affordability reached a crisis point during the latter stages of the mining boom and affected property prices accordingly.
That issue prompted the state government to allow block sizes below the previous allowed minimum of 120sqm and the WA Planning Commission agreed to LWP trialling its smaller block sizes in late 2015.
Mr Murphy said that innovation had been received well by the market.
He believes the ability to innovate has been critical to the acclaim the project has earned.
The LWP founder is clearly proud of the numerous state and national awards, plus the 2015 World Prix D’Excellence Award for Masterplan Communities awarded by FIABCI, the international real estate federation.
Expansion
The lessons learned at Ellenbrook have not been in isolation.
LWP has, over the years, expanded into each of Perth’s major development corridors.
Its portfolio includes 3,500 lots in Byford called The Glades, 2,600 lots in the greater Alkimos area marketed as Trinity, and 3,500 lots at Banksia Grove in Wanneroo, which are 50, 75 and nearly 100 per cent completed, respectively.
The last of these came with the 2019 merger of LWP and PRM Property Group, which effectively boosted the company by one third.
Three years since that amalgamation, the integration has settled to the point that Mr Murphy is comfortable to step away from his executive role at the end of the year to become non-executive chair, leaving the day-to-day management to managing director Brendan Acott, who came from PRM.
In land terms, these projects are relatively mature, especially when Ellenbrook is add to the tally.
As a result, LWP’s focus has shifted east, where it has a 7,500-lot development in the Hunter Valley in NSW.
But LWP is evolving in more than just a geographic sense.
In some ways it is back to the future, as Mr Acott’s leadership has taken the business into the direct investment of built-form development in the most significant sense since the early days of Ellenbrook.
An example Mr Murphy provides is a childcare centre in Southern River.
“We are much more active, rather than just selling sites,” Mr Murphy said.
“When you look at Perth, big parcels of land will not become available.
“We have to adjust as a result.
“For our investor side, we are taking capital that might have been available purely for land and providing opportunities in built form.
“For them, it broadens their investment profile with us.”
Delivery
The final stage of Ellenbrook is nearly complete and within a couple a years will meet much of what was promised in the original prospectus published three decades earlier.
Not many businesses can claim as much.
While Ellenbrook may end up a little shy of the original prospectus vision of 12,000 homes and 35,000 residents, that appears more a result of tinkering with the planning, such as expanding the town centre, rather than from demographic changes.
In fact, the average people per household in Ellenbrook remains the same from the 1993 prospectus to 2021 census.
Perhaps a bigger difference is the value.
Almost 30 years ago, Richard Court projected it would be worth $1.5 billion.
With inflation considered, that ought to be around double at $3 billion in today’s dollars, however, Mr Murphy estimates the end value of the project will be about $5 billion.
“The first 500 square metre lots were sold at $55,000 in 1995,” he said.
“The same lots today would be at $275,000.”
There will also be a train line. Not even a promise in the original prospectus, beyond a small image on the front page, it will be a multi-billion-dollar reality in time for the next election.
And, of course, Mr Murphy will no longer be executive.
“Come Christmas time I will step down from the executive role and remain chair,” he said.
