Poultry to property: how Australia’s richest families are making second fortunes

Baiada family patriarch, the late Celestino Baiada.

For all that appears unchanged on the BRW Rich Families List for 2015 - the Smorgon family tops it, as it has done for all seven years of its publication - at least 20 of the dynasties on the list have pivoted from what made them wealthy in the first place, to build second fortunes as property developers.

Take the Baiada family business, well known for poultry brands like Steggles and Lilydale, that sell chicken to 40 per cent of the Australian population.

Underpayment of the workers that help them do it also saw the family forced to comply with extensive Fair Work Ombudsman recommendations this year. The family is no doubt glad to have diversified into a different, potentially even more lucrative business: property.

In the past decade, the Baiada family has quietly been building a substantial development business called Celestino, named after the late family patriarch Celestino Baiada, who arrived in Australia from the Maltese island of Gozo in 1916.

The Celestino development business is undertaking a huge $4 billion masterplanned residential and mixed use project in Sydney’s north-west called The Gables Box Hill, on former diary farming land. “If you can, buy land because they’re not making any more of it,” was Celestino Baiada’s famous saying.

The project covers more than 330 hectares and will contain more than 4000 dwellings when complete.It will also feature a lake and 5.5 hectare town centre surrounded by high-density living.

The Baiada family, which also is building the $2.5 billion Sydney Science Park near the proposed Badgerys Creek airport and has more than 8000 housing lots in south-east Queensland, is treading a similar path to that of a majority of this year’s BRW Rich Families list.

Twenty of the list have made their initial fortunes in a diverse range of industries from steel to retail to manufacturing and hosiery and have since poured the wealth into property, where they are making even more money.

Combined wealth on the list reaches $41.18 billion in 2015, up from $40.1 billion a year ago and $35 billion the year before. The average wealth on the list is $824 million per family, the highest ever result.

There are three debutants on the list this year, led by Melbourne’s Ring family in 31st position with wealth of $440 million. Like many on the list, the Ring’s fortune was a long time in the making even though they have quickly burst onto the scene this year after the huge majority sale of the Swisse Wellness vitamins company in September.

A portrait of Swisse founder Kevin Ring from the 1960s.

The Ring family’s slice of the $1.67 billion payday when Swisse was sold to Hong Kong listed Biostime has its origin in a trip to Switzerland by Kevin Ring in the 1960s. Ring studied natural medicine techniques and came back to Australia to establish an organic bakery. The business eventually became Swisse. The company’s big breakthrough came in 1991 with the release of its flagship Swisse Women’s Ultivite.

A period of rapid expansion followed before a real boom in the past 12 months thanks to exporting to China either via direct sale or Chinese immigrants to Australia, leading to the Biostime deal. Ring has stepped away from the Swisse board after the sale, though his sons Edward and Charles remain in executive roles.

The other debutant families are from Perth, where the Caratti family (ranked 47th with wealth of $312 million) has diversified into property after an initial fortune made in earthmoving, and the Cardaci family (50th with $302 million wealth) from the transport sector.

Some large families such as the Smorgons, who hold first place with $2.74 billion wealth, have a large array of investments across at least seven different family wings. Several are in property, including Norman Smorgon who is a director of Intrapac. That company, of which the family’s Escor investment arm is reported to have a 30 per cent stake in, is building a $3 billion mixed residential project on the outskirts of Darwin.

Most of the wealthy families are undertaking big residential property projects originally designed to be drip-fed onto the market over several years and thus ensure steady income and returns.

But even that strategy has accelerated with the housing boom. The Lewis family, which now owns 100 per cent of Lewis Land Group, is building the $700 million Sovereign Hills masterplanned suburb in Port Macquarie, NSW. The group is struggling to keep up with demand, having pre-sold just about all of its latest release of 116 lots at College Rise. Lewis Land is releasing another 170 lots this financial year.

Other families like the Laidlaws, who made their fortune with the Hard Yakka clothing company, and the Scheinbergs, former owners of Best and Less, have bought into commercial property after selling their original businesses. Similarly, Banna Property Group, which owns Sydney retail plaza and strip shops is owned by the Chan family, whose wealth is traced back to a general store opened in Papua New Guinea by the late Bernard Chan.

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