Formed of a host of subsidiary companies that cover the full spectrum of building industry services, including the award winning Burbank Homes, the Burbank Group of Companies is reimagining the format of a home and property group.
The group’s Managing Director, Jarrod Sanfilippo, talks about the diversification that interlinks the companies and the continuing expansion that has seen the group continue to go from strength to strength.
All in the Family
“It was a business started by my father,” Mr Sanfilippo says. “Everything we do is linked through to property or built form assets, in one way or another.”
The group consists of companies that deal with the land needed for building, trade firms that help build properties, storage firms helping people store items when work is underway and a finance business that helps customers pay for their homes.
“My father was an accountant, and his step-brother was an electrician. Obviously, the major two sides of building are the sales, marketing, accounting side of the business, and then there’s the trade, supplier base. So, together they formed Burbank Homes, to start with.”
This first company, a firm that has since grown to become one of Australia’s leading builders, began as a modest weekend project. Years of hard work helped it develop in size and stature, and from there the Burbank Group of Companies grew with it.
“They ended up deciding to make it a business,” Mr Sanfilippo explains. “It started from just one display home in the nearby suburbs to their home, and it’s now grown to spread right across Victoria.” Mr Sanfilippo’s uncle left the business nearly a decade ago.
Burbank Homes started a slow but steady migration across the country, and has since moved into New South Wales and South Australia over the last five years.
Mr Sanfilippo and his father spent some time running the company together, with the former concentrating on developing the group into other states in Australia, while the latter focused on the group’s land development company.
“That allowed us to both grow together,” Mr Sanfilippo says, “having a separate focus but also interlinked, because obviously working as father-son, but also the two crucial parts of the group.”
With the intention of not only helping grow Burbank Homes, but also of creating a business that could develop in its own right, the company started selling land off to other builders and customers. This developed into offering a full service in property development.
“The two trades required for certificates in the building process are plumbing and electrical. So, to control that process and to understand it, it was decided to start plumbing and electrical businesses which now carry out all of our work, plus have their own clientele outside of Burbank Homes.”
As well as undertaking all work for the group, these companies are mandated to work outside of the company structure. It is important that all businesses within the group stand alone, and not rely solely on another part of the group for trade.
A key part of the group is National Pacific Finance, a privately-owned company that acts as a brokering service for the group’s customers to buy Burbank homes, as well as anything else they might want to finance.
“We created National Pacific Finance to not only help customers obtain loans,” Mr Sanfilippo continues, “but also provide us with the avenue to be able to understand more about our customers. And, the group just continued to grow organically.”
The size and diversity of the group has meant it has been able to acquire many smaller companies over the years, and is now made up of a long list of firms working across several different industries.
“The Burbank Group is our parent brand, which has all the other companies underneath. So it includes Storage Box, National Pacific Properties, Dynamic Technology Solutions, Vault Plumbing, National Pacific Finance, Beacon Building Services, Digital Minds Software Solutions, Urbanedge Homes and Eight Homes—all those companies which are in the group, but we also have Burbank Homes.”
The group itself is made up of eleven companies, one of which is Burbank, which is further split into several smaller companies that work across the different territories and the three different areas of the building process.
Following the passing of his father last year, Mr Sanfilippo has now taken over the reins of the business. In the past half-decade, the transformation from Victoria-based company to one of national renown has been quite astounding.
“It was really off the back of a very strong business in Victoria,” he explains. “Expanding into Queensland first, we’ve always done it slowly but carefully. We grew naturally, not just going out and expanding at a big rate. It was just one step at a time really.”
The solid base of Burbank Homes and National Pacific Properties, the two major Victoria-based firms, helped the group significantly. It was able to lean on these resources from a corporate perspective, while simultaneously expanding with General Managers in each state.
“Each state start-up was all going very differently. Queensland started by myself going up and searching for office space and display locations, and then starting the construction off that and recruiting someone to be on the ground for me.”
The start-up in South Australia came out of the purchase of Japanese home builder Sekisui House, owners of residential developers AVJennings. As a result, Sekisui House decided to pull out of contract housing in NSW, which likewise left an opening for Burbank to move into.
“There was an instant team, an instant book of work and a process in place already. So NSW and SA were closely linked in terms of us taking over another business that was already operating.”
The size of the operation moving into South Australia worked as a perfect small-size test case, allowing the group to work out its management methods and carry them over on a larger scale into the business in New South Wales.
But although this kind of acquisition was beneficial for effecting a quick and smooth start-up in these regions, it did not come without challenges of its own, most specifically the lack of brand awareness in new territories.
“At first,” Mr Sanfilippo says, “nobody knew us, and a lot of the challenge was, when they opened the doors in Queensland, or NSW, or SA, the reaction often was ‘who’s Burbank’? The name was not known or trusted, so there was a lot of work to educate the customers.”
This meant the group had to invest a lot of time in ensuring potential customers in new territories understood the history and values of the brand, to send the message that it wasn’t just an inexperienced start-up.
“Off the back of us expanding interstate, a lot of the way we market is how we have been building for thirty years. The fact that we have that stability of history and growth and also have the group structure behind us which we can all lean on, helps us grow.”
Other USPs for the group include the offer of an extended warranty on its homes, which other places do not provide. Burbank homes are guaranteed for fifteen months rather than the industry standard of three months.
“That’s our point of difference,” Mr Sanfilippo says, “is fixed costs, so there’s no surprises. We’ll lock that total price in with no more variation. We also offer a thirty year structural guarantee and a fifteen month maintenance pledge and we’ve been building for nearly thirty-five years.”
In addition, the company is one of very few able to offer experience and knowledge in the three key areas of residential construction, these being detached homes, townhouse developments and apartment buildings.
Mr Sanfilippo can’t name another organisation in the country that offers all three of these areas of expertise, and therefore cites this as being the group’s biggest selling point. But the group’s diversification also has a big effect on how it gains custom.
“When you become a player in a certain industry, you understand that industry well enough, and there are a lot of trends and information that you learn, so you can put those together and paint a more solid picture on how to strategize each company moving forward.”
Owning a finance business, for example, allows the group to see what is happening with banks and at the financial level, and to use this information to influence things happening at the level of the build. The same can be said for other parts of the group.
“We can see what’s happening in land, when land’s coming up, what the strategies are with government proposals or regulations, how fast things are selling, pricing intel, and how that links in with building a residential dwelling.”
“For example, if sales start to slow down in land, it follows about 6-12 months later in the building arm, because they need the land first and then they need to start building on it. Things like that we need to monitor and be more aware of.”
This gives the group a significant advantage over its competitors, as it can often put Burbank significantly further ahead in a building process than those who don’t have such close ties to other areas of the industry.
“To grow across the Eastern Seaboard over five years has taken a lot of focus and time and strategy from the management group, so that’s definitely a key milestone. Queensland was five years ago, SA was two and a half and NSW was one year ago.”
Within this time, the group is proud to have become a shareholder in Urbanedge Homes, a high-end architectural firm in Victoria with over a decade of experience building premium service and luxury new homes.
“All of our expansion meant we are one of Australia’s top ten home-dwelling construction businesses,” Mr Sanfilippo explains, “which was [another] big milestone for us.”
Another of the group’s key achievements comes in the form of software development company Digital Minds Solutions, a company started and operated in India, and created for a very specific role in the day-to-day running of the group.
“Digital Minds was created because for all group subsidiaries to efficiently linked in with each other, our IT-based requirements are high. Digital Minds is responsible for all of our software development within the group, helping us streamline our digital environment and improve efficiencies.”
Because of the high volume of digital expertise available in India, the group came up with the idea of developing and building a company capable of handling all the group’s IT requirements, rather than outsourcing to a firm in the same area.
“Whether that’s support, whether that’s website creation, whether that’s computer-generated imagery. For example, if we’re to build an apartment building or townhouses, they create the renders of lifelike computerised images for our marketing material.”
All of these extras help the group get ahead in an industry that, like all others, experiences several issues that need to be overcome by those working within it. Mr Sanfilippo believes most of these issues are arising from the problem of housing affordability.
“The prices are rising massively across the industry, from the price of land through to the homes. So, overall a house and land package, or land and dwelling that they’re buying separately, are costing more and more.”
Much of this rising cost is fuelled by the strength of the economy, although in the last two years there has been a significant increase in the number of active building sites across the industry, putting huge pressure on the trades needed to keep the industry moving.
“Whether that be drafting, estimating, or whether that be bricklayers or carpenters, there is really a need for greater training in that space, because all builders are short on trades that can meet the demand. Supply and demand is becoming very critical.”
Another issue in Victoria is related to the costs of building and the amount of time it takes for a project to get started. When a home is sold now, on many occasions the land cannot be titled for another 12-18 months.
“If we sell a home today, it doesn’t get to site on average for 10-12 months. So you’re selling at today’s price, but the price rises that happen with trades and regulation changes—it really squeezes your margin by the time you go to build it.”
Mr Sanfilippo admits this is a huge challenge for the industry in general, with single firms unable to control the timings from sale to the start of building, meaning many of them are looking for regulations to change for protection.
In the long term, the group intends to bring land and development projects into the other states, moving across the other companies in the group to replicate the model that has been so successful in Victoria.
“Our goal is really to replicate the Group businesses we have in Victoria into the other states,” Mr Sanfilippo concludes, discussing the group’s future plans.
“We do have our Dynamic Technology Solutions, Vault Plumbing and Beacon Building Services in some states other than Victoria,” he continues. “But over time, we want to expand to have a whole Burbank Group presence in other states.”
To find out more about Burbank Group please visit their website, www.burbankgroup.com.au.