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Hickory Developments faces downturn a second timeFont Size: Decrease Increase Print Page: Print TRADING ROOM: Maurice Dunlevy | April 16, 2009
Article from: The Australian
IT is a building company that grew out of the 1990s recession and now, Hickory Developments is once again aggressively ploughing on in a tough market.

Michael Argyrou's property company will build more than 1000 apartments this year, with 175 of those earmarked for one of Melbourne's most talked-about apartment developments at inner-Richmond.

In its principal role as a builder, Hickory has constructed more than $1 billion worth of projects.

But at the $100 million Richmond ARK project, Hickory is also the developer.

The 175 Fender Katsalidis-designed apartments are to be built on busy Bridge Road, where the well-known Melbourne retailer Retail Warehouse is located.

They are a joint venture with two long-time clients, developers Omni and Headland properties.

Argyrou is already planning a second residential development with the joint-venture partners, but the crossover from Hickory the builder to Hickory the developer has been an 18-year journey during which the company had to fight every inch of the way to get a foothold in the highly competitive -- and ruthless -- commercial building market.

Hickory's big building projects have included the new Transport Accident Commission headquarters building at Geelong, which owner FKP Property Group recently sold for $75million.

But the projects such as the TAC office block and a ski resort at Mt Buller are a world away from the small family building business that Michael Argyrou joined in 1991 with his father, Andrew, and young brother, George.

One of four children from a Greek Cypriot family, he had just graduated from RMIT, where he studied property, without a job.

Despite the hardships of the last recession, the two boys -- the fourth generation of the Argyrou family to be involved in construction -- prospered.

Small renovations and refurbishments soon became townhouses and apartments, while offices and other commercial buildings followed.

Today, Michael, 39, and George, 37, are joint managing directors of a company with 150 staff.

"Nothing happened overnight, and nothing was easy," Michael Argyrou recalls.

According to the father of four, the key to Hickory's success has been side-stepping direct competition with the big builders by avoiding the tender market.

"We've never been a hard-money tender builder," he says.

"We prefer design to dollars, and getting intimately involved in design and documentation gives us more input with some clients."

Such relationships have resulted in close client friendships with the likes of the Omni Group's Brian Amatruda and Headland's Greg Taylor.

Last year all three were involved in a joint venture that built Mt Buller's spectacular Timbuktu apartments.

Now the partners are tackling a far more challenging project through ARK, a 10-storey tower that promises to be an eclectic mix of sophistication and grunge.

Architect Karl Fender, who along with partner Nonda Katsalidis are two of Australia's most acclaimed high-rise apartment designers, has created a latticed concrete form and groovy laneway that promises to be one of Melbourne's most stylish apartment complexes.

The 175 apartments that officially go on sale on Saturday have asking prices between $380,000 for affordable one-bedrooms and $1.5million for two-storey skyhouses.

Despite falling property sentiment, Michael Argyrou remains optimistic about the success of ARK and other Hickory projects.

"It's a difficult market, but we're coping," he says.

Argyrou says that buyer interest in ARK points to another good year for the company.

He says the Hickory difference is its design savvy and quality clients who, like it, want to leave a positive footprint.

"We won't put our name to buildings that damage our city."