Execution and reinvestment will be crucial, says CEO.
Rod Fehring, the property veteran who stepped up to head Frasers Property Australia (FPA) in   July last year, now runs one of the largest diversified property operations in the country - and one with some surprising challenges.
The group, created after the Singapore heavyweight Frasers Centrepoint merged its local operations with the Australand Property Group in 2014, is big in industrial property and a top five residential developer. 
"The business was left in good shape [by previous chief executive, now GPT Group managing director Bob Johnston]," Fehring says. "There is a great team and a very supportive owner. We can be a significant player but now with the flexibility of a much bigger private group."
In rough numbers, FPA has a $2.5 billion industrial and commercial investment portfolio, an industrial and commercial land bank of $300 million, and another $2.5 billion in the housing pipeline. And a staff of 600 to make it all work.
FPA is part of a $23 billion FCL global organisation, with activities in 77 cities in the residential, commercial, hospitality and industrial real estate sectors. Those activities help to stock three Singapore-listed real estate investment trusts - the Frasers Centrepoint Trust for retail, the Frasers Hospitality Trust for hotels and the Frasers Commercial Trust for the office towers.
Fehring's job is to grow the business, both in its bottom-line profits and its contribution to the global Frasers operation. To do that, he faces two key challenges.
The first is to complete the developments under way and realise the profits. "We have a lot of capital coming back from a strong development book," he says.
"But the profits are lumpy. And if something goes wrong, if costs blow out or if off-the-plan buyers take longer to settle then our earnings may be impacted.
"Completing the developments is very, very important because the capital which you are counting on needs to be recovered," Fehring says.
Profits are also being taken on long-held commercial assets. One office tower on Melbourne's Collins Street was sold to the Frasers Commercial Trust last year for $222.5 million.
The second challenge is to restock the pipeline.
"One of the biggest challenges is the reinvestment piece," he says. "We are keen to restock in a disciplined way. It is a priority for us to keep feeding the investment portfolio."
To feed the demand for investment products, FPA could also move into other sectors of development. The group has boosted its retail capacity and is considering whether to move further into student housing.
"The developer's job is to create the asset and stabilise the earnings; and this is our strength. Finding the right ownership structure for these assets remains the opportunity," Fehring says.
Fehring, a 30-year real estate veteran, was handed the top job the day Johnston announced his resignation last   July.
FPA's local board, headed by Olivier Lim, the former chairman of Australand, had clearly assessed Fehring in his four years as Australand's executive general manager, residential.
Before that he was at Lend Lease, as chief executive of its retirement living/aged care and Venture Capital businesses and, for six years, the chief executive of the Delfin Lend Lease residential operation.
Like the board, Fehring also appointed from within Reini Otter, a 17-year Australand veteran to become the executive general manager, commercial and industrial, and Anthony Boyd, who has had 10 years with the group, to become the executive general manager residential.
The existing head of commercial and industrial, Sean McMahon, was appointed to the new role of chief investment officer but he has recently resigned to take a similar role at Charter Hall Group.
Late last year, Fehring walked the Australian Financial Review around Discovery Point, the FPA apartment community, at the entrance to the new Wolli Creek Rail Station just three stops from Sydney's Central, that the Urban Development Institute of Australia chose as its best Masterplanned Development for 2016.
It is a showpiece for new urban living. Apartment residents walk straight from the station, to a small piazza, including an Orange supermarket that will have the daily groceries waiting for those who pre-order. Surrounding the apartment towers are three hectares of parkland, including the foreshore of the Cooks River.
But it has not been without challenges. The project took years to get off the ground because, Fehring says, it took time to find the best capital structure. And the construction program was affected last year by a city-wide shortage of windows imported from China, a problem now resolved.
"Australia's cities are reconstructing themselves," says Fehring. "We are an eighth as dense as Singapore. We are all involved in the same process, rehousing Australia."
Last year, FPA contributed more than 3000 apartments and residential lots to the housing process. By comparison, market leader Stockland sold more than 5000 lots.
Fehring says interest rates will continue to be supportive but he has noted the "dampening effect" of the prudential controls. "I don't think it is a bad thing," he says.
In essence, he thinks housing prices and activity will move "sideways off a high base" but with weakness in some locations. "Central Brisbane will be challenging with oversupply, so will central Melbourne and central Perth," he says.
Perth is the one market in which FPA is noting a real lack of confidence. "Perth is a long-term market for us."
In the meantime, FPA has to replenish its pipeline of about 16,500 apartments, townhouses and home sites in a capital-efficient manner.
Fehring has some guidelines. "We will not go to exclusive [housing] markets. We will stay around medium-priced property in deep markets and away from discretionary markets with more 'delta'," he says.
He is keen to control land without a big capital commitment.
And he will not do another CBD office project. They are "lumpy, institutional markets" and FPA can "better invest its capital elsewhere".
FPA has had one big win in replenishing the pipeline with the purchase of the Edmondson Park Town Centre site in Sydney's south-west. Importantly, it is anchored around another new rail station, and is not just a 900-home estate but also an important retail and employment component.
Fehring aims to expand the retail property operation aggressively using the opportunities in mixed-use projects. The retail operation, headed by Peri Macdonald, aims to boost the portfolio in the next three to five years.
FPA's other strength, in industrial and logistics development, has been ticking over nicely with big pre-lease deals in the past year with groups such as Toshiba, Fisher & Paykel, Australian Geographic and Miele.