BILLIONAIRE retailer and property owner Gerry Harvey and his partners are planning to plough an additional $100 million into mining accommodation, despite warnings that the resources boom is waning.
The Harvey Norman co-founder and executive chairman also reiterated his intention to retain the group's $2 billion of property holdings in the wake of Woolworths spinning off its shopping centres.
Owners walked away too quickly in tough times, when money could be made from holding real estate over the long term, Mr Harvey told The Australian.
"I just go back 100 years, and if all the companies had held their (shopping centres) instead of selling them to Westfield, they would all be a thousand times better off," he said.
"There's a long history . . . (selling) is not the right thing to do."
After an initial outlay of up to $60 million building transportable accommodation units, or "dongas", Harvey Norman is looking at joint-venture mining accommodation investments of up to $100m in Gladstone and Chinchilla in northern Queensland.
"It (mining accommodation) is a specialised area," Mr Harvey said. "There's heaps of demand, but there's a lot of people out there doing it too, so it's a matter of the level of expertise you've got."
The dongas are built for large mining companies through the listed Harvey Norman, which is at least 35 per cent family-owned. Mr Harvey declined to name the partner in the joint venture.
"It suited me because I have a property department that employs all these people," he said.
"I'd much rather be in that (dongas) than pubs."
Mr Harvey, whose father was a publican, said he no longer holds an interest in the Steyne Hotel in Sydney's Manly, which was purchased in 2010 by a syndicate including his close friend, advertising veteran John Singleton.
The high-profile consortium is understood to have paid about $27m for a pub and sold it for $47m in 2006, just before the market peaked.
Furniture and electrical giant Harvey Norman posted a 32 per cent fall in its net profit to $172.5m for the 2012 financial year, which Mr Harvey has previously described as very disappointing.
The company has $4bn of assets, $2.12bn of which is property.
The performance of its real estate portfolio has offset the weakness in the retail business.
Mr Harvey said part of the problem was that public company founders eventually left, with subsequent management focused on shorter-term results.
"Everyone, including the directors, are there to make themselves look good in the timeframe they are in," he said.
"For us, it makes no sense. Property always goes up in price. The longer you keep it the better. Why would you sell anything? . . . A property can go nowhere for 10 years and double in one."
Mr Harvey said he was interested in buying quality shopping centres. However, few were on the market.
Development of new centres was not being considered, because some shopping centres were being sold for less than replacement cost. A centre that cost $100m to develop could be purchased for about $70m, he said.
"It is a guaranteed loss to do a building at the moment. There is a huge incentive not to touch one.
"The only ones who are going out there to develop are Bunnings and Masters."
Harvey Norman has recently finished shopping centre developments at Springvale in Victoria, Maroochydore in Queensland and in Singapore.
"Singapore was a great success, Maroochydore and Springvale are just losses. Springvale is fully tenanted and Maroochydore is nearly fully tenanted, but the cost of doing them for the rent you get is just not there, and you have to give a free fit-out, 12 months free rent, all these sorts of things."
However, despite higher levels of incentives and weaker rents, Harvey Norman's portfolio was 98 per cent leased.
The best areas for the group were the Western Australia and Queensland mining hubs.
Mr Harvey said cheap internet purchases from offshore sites were unlikely to last. Australia was likely to introduce laws similar to those in Britain, where greater taxes had been imposed on the purchase of online products.
Harvey Norman also owns industrial property, but is mostly focused on retail.
Mr Harvey's private interests include horse and cattle properties, including two horse properties comprising 80ha at Matamata and Karaka in New Zealand, which he purchased about three years ago.
