ICD Property has been active as a property developer in Australia since 2009 and has its hands in some major projects, completed and on the way, including a big expansion of the Adelaide Central Market. But with family ties to the major Chinese marine transport group CIMC, the team is introducing an innovative modular building system from China into Australia.
When Matthew Khoo took over the reins of ICD Property in 2013 it was where he hoped his career was heading.
Khoo had studied property and finance at university, he’d done a stint as a property researcher and investment consultant at JLL followed by a role at ANZ but he was itching to do something more significant, get skin in the game, so to speak.
It was around the same time that he ran into an old school mate Michael Mai, who’s family came with strong connections to the giant Chinese marine transport and container manufacturer CIMC.
Mai’s family office was getting deep into property; he had a family and friends network that also wanted in on the Australian market and it was time to put someone at the helm that could lend a steady but talented hand to run operations.
Melbourne-based ICD, was launched in 2009 by Michael, focused mainly on suburban projects across Australia and Auckland.
The Mai family saw great alignment between Asia and Australia and made the decision to send their son to study here in Australia.
“That’s actually how I met Michael; we went to school together.”
Khoo credits his role as a property researcher and consultant as “very handy to understand the industry, especially the macro side of things and the micro to a degree as well … so the levers of demand and supply and how everything operated at a high level.”
But he soon found he wanted to go deeper, “get more involved”.
So, property’s addictive element kicked in?
There’s something about bricks and mortar, he says, “that physical touch and feel is what like I really like.
“You can see something be delivered and have a lot of pride about doing that.
“I wanted to get more involved in the projects, but I didn’t have a property development background. So it was then that I moved into property finance.”
The job with Michael was tailor made. There was a “small” project of 633 apartments planned and Khoo found he could help with its evolution.
He loved the site suggested the business needed a joint venture partner to get funding, because “everything needed to be tier 1” – the bank would likely not lend if the builder was not on the level of a Multiplex builder.
The EQ tower at 135 A’Beckett Street came next, alongside the 65 level tower Aspire Melbourne in King Street, finished in 2023 and a huge project underway in Adelaide Market Central Market where ICD is about to double the size of the already substantial foodie destination.
The day before we spoke, Khoo had just returned from a trip to South Australia where state premier Peter Malinauskas had just presided over its topping out ceremony.
This is a public-private partnership that he says will boost Adelaide’s resurgence that’s already well on the way. It’s a mixed-use project, designed by architect Woods Bagot and including an elevated 3000 square metre green space with edible gardens.
Adelaide is “going places”
Can Adelaide sustain such a bold expansion?
“I go there every week; it’s packed.” He claims the city will soon have 10 million visitors.
“I love Adelaide. It is definitely going places. It’s got really good government, encouraging investment, it’s got Gather Round (football festival) and Adelaide Fringe. Every month there’s something going on.”
The same way Melbourne boosted its popularity?
Absolutely, Khoo says.
Melbourne is not so good
But of his home city, Khoo is not so enamoured these days.
“I know Melbourne got voted, apparently, the best, most liveable city again this year, but I live here and I wouldn’t call it the most liveable city in the world, that’s for sure.”
He rolls off a string of complaints: high taxes, discouragement of investment, high debt levels and “the speed in which we operate”.
“I think all those things really impact how we can grow as a state.”
But the price of housing has come down, we say; it might be bad for investors but not for first home buyers.
In fact, there’s emerging trend of young first home buyers are now moving to Melbourne, even from Brisbane, which traditionally mopped up young families looking for cheaper housing.
Won’t Melbourne come roaring back, as it’s done before? we offer.
Khoo is not so sure.
“Look, affordability is really important. And I think affordability is actually negatively impacted by taxes. So if you have high stamp duty, land taxes, vacancy tax, absentee tax, the developers will pass it on.”
There’s “a big issue around new supply and dealing with the growth, which then will have an impact on rentals. I think the better way to deal with affordability is encourage more supply.”
The cost of labour is probably the biggest issue, he says.
Modular can help
Which brings him to the solution CIMC has been steadily working on for 30 years – modular housing from China.
Not the container style housing that probably stigmatised the sector in the past, but hugely improved quality design and finishes, Khoo says.
In fact, ICD, which taps into this pipeline of alternative construction, is an acronym for Innovative Construction and Development, he points out.
“Our original purpose was to bring modular construction to Australia.”
Sustainability is built in
It’s got a big sustainability dividend, he points out, namely to substantially reduce waste, which combines with the tracking of embodied carbon, something on many building professionals’ wish list.
Khoo says the sector might have had a rocky start, but the company is now seriously ramping up its modular construction business, after a round of research and with clients and new structures to support the better techniques and delivery.
The plan is to manufacture part of the product overseas and then assemble it here on site.
CIMC Modular has already been involved in Perth’s Ibis Hotel, part of Dawin University and projects in Saudi Arabia, such as The Line, as well as with other developers in Australia.
The method suits institutional ownership, Khoo says, so build-to-rent rather than build-to-sell.
ICD is soon bringing new prototypes to Sydney to showcase what student accommodation can look like.
As well as the embodied carbon measurement Khoo sees “the idea of sustainability” is “about the practice” as well.
“The way we look at it is, it’s about functional, practical sustainability. So we look at the quality of a product and say, well, if you don’t have to rebuild it in 10 years’ time, it’s adding to sustainability.”
After that comes the delivery method, where “there’s no wastage, because you’re cutting everything to size in the factory”.
Adding to the benefits is a cost savings of about 8 per cent, adding to a time saving of about 35 per cent.
“We’ve got finance facilities in place that can make it cheaper from a financing perspective as well.”
Prefab facades and HVAC
But the search to cut costs is never ending. One innovation the company has come up with is installing facades in the factory. The parts are connected on site, top down, with the waterproofing incorporated as the building progresses.
It’s a method that reduces the amount of labour needed and removes the need for scaffolding and protection work, which add quite a lot to cost.
Another component that can be factory installed is the HVAC (heating, ventilation and airconditioning).
Between these projects, as well as others in the pipeline such as Sydney House, a commercial nd residential tower in Pitt Street Mall, in partnership with First Sponsor Group and a mooted six?tower project in West End in Brisbane, Khoo just might have found the property niche he was looking for.