For David Harrison, Managing Director and Group CEO of Charter Hall, Australia’s leading fully integrated property investment and funds management group, real estate is more than just a career – it’s part of his DNA.
“I grew up in a real estate family,” he tells The CEO Magazine, adding that his parents were both real estate developers.
“They had a variety of real estate agencies in the country on the mid-north coast. I got involved in the business in high school and was selling rural blocks of land on the weekends to make some money, working on commission only. If I didn’t sell anything, I didn’t earn any money.”
By the time he left high school, Harrison was already flipping properties with his father.
“I got involved with some projects with my dad, buying dilapidated houses that we’d refurbish to sell,” he says. “In a real estate family, you just grow up like that.”
After high school, Harrison went on to complete his bachelor’s degree in property economics at Sydney University. From there, his career took off, including a pivotal stint as Agency Director at Raine & Horne Commercial and a bold move in the 1990s to team up with Hong Kong-based First Pacific Davies to acquire – and eventually sell – the company. Since then, he hasn’t looked back.
Celebrating 20 years
This experience laid the foundation for Harrison’s 37-year career in the industry. In fact, just this year, he’s celebrating two transformative decades at Charter Hall. “When I joined Charter Hall, we were a private company,” he recalls.
Shortly after, the company listed on the Australian Securities Exchange (ASX) in 2005.
“We put together a portfolio, stapled it to the funds management company and listed that on the stock exchange, effectively creating what’s now known as the Charter Hall Group,” he explains.
“Listing on the stock exchange gave us the profile we needed to attract capital and build scale.”
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Harrison says several significant milestones have marked his 20-year journey with the company. For example, early equity raising from domestic and international sovereign wealth and pension funds laid the foundation for the Group’s success, and he attributes their long-term support as key to the Group’s growth.
At the same time, Harrison reveals that merger and acquisition activity has also been a hallmark of Charter Hall’s success, pointing to the 2010 acquisition of Macquarie’s property management platform for US$68.9 million as a turning point. More recent mergers, including Folkstone in 2018 and the IAP portfolio and Southern Cross office precinct in 2022 further cemented the company’s reputation.
“The ‘listed world’ always looks at merger and acquisition activities as milestones,” he adds. “But for me, the greatest achievement has been delivering really strong performance for our fund investors, predominantly in the unlisted market – 80 percent of our funds are in the unlisted market, supported by super funds, pension funds and 20,000 retailers.”
People power
Delivering consistent performance for these investors is the cornerstone of the company’s success – and successful it’s been. Harrison has overseen the Group’s growth from a small fund manager with US$320 million of assets under management when it listed on the ASX in 2005 to today, being the largest diversified property funds manager in Australia with a US$8.02 billion development pipeline and US$51.9 billion of property funds under management, spanning core real estate sectors including industrial and logistics, office, retail and social infrastructure.
“Charter Hall looks like a great success story – and it is. But it’s not just mine; it belongs to the whole team. We have the best bench strength below me in the whole sector,” he beams.
Harrison admits that they’re also his biggest motivator.
“We now have 600 employees and a network of 20 non-executive directors who bring incredible expertise to our investment committees,” he says.
“Our team is a combination of ‘gray hair’ leadership and youthful exuberance, which creates the perfect combination of innovation and growth for Charter Hall, helping us connect with our customers at all levels.”
Unsurprisingly, his tenants of good leadership begin and end with people.
“We attract – and keep – good people,” Harrison says proudly. “One of the great things about this business is we’ve been able to recruit both internally and externally.
“And for many people here, it’s provided a fantastic career path for them because they’ve been able to do multiple disciplines within Charter Hall right across the property sector because as a large-scale developer, we’re across virtually all sectors.”
An invested leader
While that’s certainly been a key element to Charter Hall’s growth and success, Harrison says, building the right culture has been another.
“It’s important that your people like coming into work,” he says. “By industry sector standards, we’ve maintained very high engagement scores around 90 percent for many years.
“Of course, people want to get paid, but they also want to know that their career advancement opportunities and that they like the chemistry at their workplace. I used to have a sign outside my office that said, ‘Make money, have fun.’ It doesn’t have to be in that order, but that’s the basics. As long as our people feel like they’re doing well, having fun and learning, then that’s a pretty good place to be.
“As a leader, you don’t have to be everyone’s best friend. But if you go into war and get into the trenches, then you want to be sure that your people are right behind you – not standing back a hundred yards waiting for you to take the first bullet. That’s really the test of leadership, whether or not you have your bench supporting you in every way.”
Looking up to Frank Lowey from Westfield and Greg Goodman from the Goodman Group, Harrison is inspired by how these Australians have grown their businesses and prospered in the industry. He reflects on the three elements he believes leaders need to embody to be authentic. And the first is to remain curious.
“There’s so much data in the world now compared to when I started 37 years ago,” he says. “And the speed and access to information is also so much quicker now. You can get lost in the data and not be able to instinctively determine how to best outperform your competition.
“So the next thing you have to do is be well researched before you interact with your customers. Then third, you must empower your people.”
Attractive opportunities
With wisdom that comes from spending decades entrenched in the industry, Harrison remains optimistic about the Australian property market despite significant challenges in recent years from rising interest rates to inflationary pressures.
He explains that real estate prices move in cycles and are closely linked to interest rates: when rates fall, property values tend to rise. And even when rates hold steady, natural rent growth continues to push prices upward. Recent rate hikes caused a dip in property prices, but with rates now peaking and expected to decline – likely in 2025 – Harrison anticipates stabilization and renewed growth.
“We feel that, across the sectors, we’ve pretty well seen trough pricing for asset values and, therefore, we think capital is far more constructive around expectations of asset value growth over the coming years,” he says. “With that, we expect to see further capital invested in real estate as prices rise.”
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This cyclical recovery paired with Australia’s strong economic fundamentals, he says, positions Australia as an attractive destination for global investors.
“Australia and the Australian property market has always offered opportunities for businesses to grow. We grew out of being a relatively small boutique private firm into what we are now as the largest owner of property in Australia. So there are always going to be opportunities.”
Specifically, Harrison notes three key reasons why real estate looks really attractive on a global scale.
“First of all, Australia’s had above normal net population growth compared to any other major economies – there are major economies in the world that are actually shrinking,” he notes.
“Second, Australia is a big service economy. We actually produce things that the world wants, whether it’s agriculture or minerals. When you have a country that can continue to both export and consume what it produces, then it becomes a reasonable prospect to sustain strong gross domestic product growth.”
The third reason, Harrison puts down to a collection of attributes that together, make an attractive package for investors.
“Australia is a very transparent market. Our legal system is world-class, and we are in a very balanced market in the sense that both domestic and foreign capital invest in multiple sub-sectors in property,” he explains.
“And don’t forget, we are one of the few economies in the world that haven’t had a recession since 1991. So when foreign capital looks at the long-term prospects to invest here or somewhere else in the world, Australia screens very well.”
The future office
Within this favorable environment, Charter Hall stands out by prioritizing investment that further insulate it from market volatility.
“We are very focused on land-rich investments,” he says. “Land often appreciates faster than the buildings on it, so we focus on assets where land makes up 50–100 percent of the investment value. Having this strong component of your asset – one that is always growing – can offset the fact that building improvements in all sectors generally depreciate. That’s why we have a taxation system that allows people to depreciate improvements.
“If I think about our retail platform in net lease retail and smaller supermarket anchor shopping centers right across that US$9.6 billion platform, land as a percentage of the investment value is very high – the underlying land value is 75–80 percent across that whole platform.”
Harrison explains that Charter Hall also has a similar view around industrial opportunities, where the underlying land value is a high percentage of the investment value.
“We are also very bullish about the bifurcation of tenant demand towards modern assets,” he points out. “As the world’s gone through the COVID-19 pandemic and working from home, both corporations and governments are increasingly encouraging their people back into the office.
“And to do that, they’re going to need to have the very best modern office accommodation, great transport, great retail and hospitality amenities. So we see a huge movement of office tenant demand toward modern assets and away from older assets.
“Even though there’s been a lot of skepticism, we think the future of the modern office is very strong. And, therefore, the opportunity for us is to keep building brand new buildings.”
Charter Hall is just wrapping up a new premium tower in Brisbane and building a second Chifley tower in Sydney.
“We’ve recently finished three brand new, premium-grade buildings in Melbourne as well,” Harrison enthuses. “We think that sector will have high occupancy and strong rental and asset value growth.
“And we will continue to curate and steer away from older office buildings, which I think are going to have increased obsolescence issues.”
Performance delivered
Looking ahead, Harrison is confident in his focus. After all, with a proven track record decades long, he knows exactly what to prioritize to keep the ship running smoothly.
“My key priority is to work with our whole team to continue delivering the best possible performance for our investors,” he says. “As long as we deliver that relative to the various benchmarks that the investors expect us to achieve or exceed, then the rest of the business will be OK.
“I’ve been doing this a long time. There is no substitute for performance when you’re managing other people’s capital. So we will continue to protect their capital, grow it and outperform benchmarks, delivering them a better return than cash – that is our only priority.”
This return on investment is due in great part to the company’s customer-centricity.
“It’s in our DNA,” he stresses. “We have been a fiduciary of managing other people’s capital since we were founded in 1991. It doesn’t change. We are never arrogant about the use of other people’s capital. And our business model is to use our balance sheet to co-invest with our investors in our funds and partnerships for alignment. That’s how we think about the business.”
With this solid foundation, Harrison knows Charter Hall will carry on with ease, doing what it does best for many more years, because it’s the legacy he’s built that will carry it on.
“The true test of a company is that you develop your own moat, your own culture, style and customer-centricity and embed it in the organization so it continues irrespective of what leaders come and go. And that’s what I think we’ve got here,” he reflects.
“Ultimately, when I eventually leave, that’ll be the real legacy. It’s the people strength that we’ve developed and their focus on customer-centricity, which will sustain the organization irrespective of who happens to be the leader.”
