People who work with Maha Sinnathamby say the man behind Australia’s largest single property development has unbridled energy. The Malaysian-born engineer sets a rigorous pace and expects others involved in building the A$15 billion ($11.98 billion) Greater Springfield mega-city outside Brisbane to keep up.
Sinnathamby’s story is a classic rags-to-riches tale and yet his family company Springfield Land Corporation barely rates a mention in the financial press. So heads turned in May this year when his name appeared on the Financial Review Rich List as one of the country’s newly minted billionaires with a personal wealth of A$1.02 billion.
Sinnathamby is nearing his 80th birthday but there is no talk of slowing down or handing over the reins to one of his four children, all of whom work in the business. Nor is he thinking about listing the company on the stock exchange.
“Our masterplan is 20% complete and we have an obligation to the nation to keep going,” he told FinanceAsia in an exclusive interview. “Right now we are focused on adding apartments to the mix of residential options and building the next stage of our health project. I don’t sleep much and I don’t let anyone else sleep if they have a job to do.”
Springfield Land’s multi-decade mission to transform 2,800 hectares of scrubland into a master-planned city is awe-inspiring. When it is finished in 2030, Greater Springfield will house 138,000 people in vast housing estates and retirement villages, contain 35 schools, a 1,200-bed hospital, a technology hub, several shopping centres and luxury hotels, and a championship golf course.
Nearly 37,000 people already live and work in Springfield and 3,000 more relocate there every year. Unemployment in the city is running at below the national average and the goal is to create one job for every three residents.
Trash to treasure
Sinnathamby said when he and his partner Bob Sharpless bought the land for A$7.9 million in 1992 nobody else wanted to touch it.
“All the odds were against us. The land sat in an area of high unemployment and crime with the state prison just eight minutes away and a mental hospital down the road. About a third of the land was zoned for mining and there was no transport infrastructure connecting it to the outside world.”
To Sinnathamby, however, it looked like gold. “Where else do you find such a large parcel of land just 25 kilometres from a major city? We have subsequently researched this and found only one other parallel in Pennsylvania,” he said.
Still, it took almost superhuman endurance to realise his plan. It would be nearly five years before he obtained planning approvals and another eight years before he turned a profit.
“You don’t take on something like this to make a quick buck,” he said.
Mega-cities of glass and steel are a world away from Sinnathamby’s childhood in a small farming village south of Kuala Lumpur. “I grew up with little running water and no electricity. I studied under a kerosene lamp,” he said. His father worked on a local plantation and spent a year as a prisoner of war during the Japanese occupation of Malaysia.
“I learned very early that education and enthusiasm are the currencies of the future,” he said, shedding light on the origins of his determined character.
He immigrated to Australia to study engineering in Sydney and started his first property venture, Murdoch Construction, in 1971 in Perth. When that failed in the early 1980s he moved to Brisbane “with very little money”.
“I am not the type to give up,” said Sinnathamby. “My mantra is ‘stop not till the goal is reached’ and I live by this every minute of every day.”
Sharing the vision
It has taken a while for others to embrace Sinnathamby’s vision but now companies big and small are approaching him to do partnerships.
“We already work with Lend Lease, Mirvac, Aveo Group and institutions like the University of Southern Queensland and Mater Health Services.”
Partners are attracted to Springfield’s unique planning status. The city is covered by its own state-based legislation, which means obtaining local government approvals for each new development is a matter of rubber-stamping. The only other precinct in Australia operating under similar legislation is Canberra, the nation’s capital.
Earlier this year the company signed a A$6.3 billion deal with Chinese developers R&F Properties and Etone to build 10,000 apartments.
Another multi-billion deal is currently in the pipeline for the city’s 52-hectare health hub. Project specifics are scant but the tender has attracted dozens of bids and a shortlist of three has been drawn up, including a company from Singapore.
“Our partners must be established players in their own right. We want them to support the masterplan and be in it for the long-haul,” Sinnathamby said. “We select some by tender and we handpick others.”
Springfield Land doesn’t publish financial statements. Revenues are generated from residential and commercial sales, rental receipts, and royalties from developers like Lend Lease and Mirvac. The company owns and operates several of the buildings in the city including office towers and a A$270 million Polaris Data Centre, which Sinnathamby says “delivers strong cash flows”. General Electric and SunCorp Bank are key tenants.
The bulk of the company’s profits are ploughed back into the business, minimising its need for bank funding. It has never issued a debt capital markets instrument and the business carries a low debt-to-equity ratio of between 8% and 10%. “We continue to invest in surrounding infrastructure such as roads and telecommunications. Together with the public and private sector we have invested close to A$15 billion on the project so far and each year about another A$800 million is spent.”
Sinnathamby likes having ultimate control over his business and brushes aside any suggestion that Springfield Land may one day list on the stock market. “We could never have remained true to our masterplan if we had to constantly change direction to deliver quick quarterly profits to shareholders,” he said.
He also sidesteps questions about a succession plan, though sources say his daughter Raynuha is most likely to assume the role of company chairperson in the future. Trained as a lawyer, she has been managing director of the company since 2013 and has held various positions on local property and business advisory councils.
Sinnathamby describes Raynuha as a natural leader with strong connections of her own. “All of my children share the dream,” he said, smiling. “They’ve been brought up under the real estate tree.”