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After almost two decades in the wilderness, Gold Coast-based developer Raptis Group (ASX: RPG) is set for resurrection following the appointment of a new CEO and a business strategy that will see the group ramp up its portfolio of property management rights and potentially deliver a new concept in affordable living.
Development industry entrepreneur Russell Garnett has been appointed CEO and managing director of Raptis Group, replacing company founder Jim Raptis who resigned as CEO yesterday.
Garnett has revealed a major shift in strategy for Raptis Group, a once prolific Gold Coast high rise developer that has largely remained dormant since securing the support of creditors 16 years ago after falling into administration during the Global Financial Crisis.
The appointment of Sydney-based Garnett, who assumes the CEO position today, is also the first step in a leadership transition for Raptis Group which last month raised $1.75 million to acquire the management rights to an undisclosed property – adding to the company’s existing portfolio of two Gold Coast high rises.
However, Garnett, a fourth-generation developer who has undertaken more than 700 residential and commercial projects over the past 25 years, reveals that property development is not part the future strategy for Raptis Group.
It’s a major departure for the company that was listed on the ASX by Jim Raptis in 1986 and has delivered a suite of landmark Gold Coast projects since then, including the Phoenician Resort at Broadbeach, Corporate Centre at Bundall, Chevron Renaissance in Surfers Paradise, Southport Central and the Surfers Paradise Hilton.
“Development is not our intent, and we will be making announcements in coming weeks and months of our strategy moving forward,” Garnett tells Business News Australia.
The strategy will be delivered by a rejuvenated board with Raptis Group expected to announce new appointments as part of the leadership transition under way.
The company announced last week that Helen Raptis had stepped down as non-executive director, while revealing today that Jim Raptis will remain as chair of the board and continue supporting the company during the transition.
Garnett, who also leads private business incubator Urban Revolutions and co-living property company Vuvale, has hinted that while he is aiming to grow the Raptis Group management rights business, he sees some synergies between the Vuvale and Raptis Group operations.
“Vuvale is like a shared accommodation, somewhere between student housing and something affordable that people aspire to,” he says.
“Building Vuvale up as a portfolio also lends itself to the management rights play - a prop-co and op-co (operating company) type of play.
“More strategically it’s about what I can do in Sydney and what we are planning to do right across the country and how those two things come together to help themselves.”
Vuvale currently has two innovative shared-accommodation projects under way in Sydney – at Oran Park and Castle Hill.
“As for management rights, the only thing that is going to change (for Raptis Group) is that we are going to grow it and we are going to grow it fast,” says Garnett.
“We are negotiating to acquire another building at the moment. After raising just over $1.7 million, it gives you an idea of the type of management rights we are purchasing next and it’s not dissimilar to what the business is already doing.”
Raptis Group currently owns the management rights to The Gallery Residences at Broadbeach and Pearl at Main Beach, projects that were developed by Jim Raptis’ private company.
Management rights at The Gallery delivered revenue of $256,781 in the December half of FY25 for Raptis Group, while revenue from the rights to the recently completed Pearl is expected to start flowing to the company’s accounts in FY26.
Garnett says future management right opportunities for Raptis Group may include existing developments or projects under construction.
“We are actively looking and we have some other sites earmarked at the moment as well,” he says.
“We will also be looking to expand those roots into NSW and Canberra.”
The acquisition currently in train has been facilitated by the $1.75 million capital raise which was announced in May.
The funds were secured via a private placement and equity raising that was fully underwritten by GAS Asset Holdings and Hayman Developments.
Following the capital raise, GAS Asset Holdings, which is associated with the Sullivan family, and Hayman Developments, associated with property industry identity Steve Hayman, have emerged with 17 per cent each of the issued capital of Raptis Group.
Boosting the appeal of kickstarting revenue growth for Raptis Group are the company’s accumulated losses of $26.59 million recorded on the balance sheet at the end of June last year.
Jim Raptis has today welcomed Garnett’s appointment as CEO of the group.
“His deep experience in property and corporate leadership, combined with his demonstrated commitment to growth and innovation, makes him ideally suited to lead Raptis through a new strategic chapter,” he says.
“The board looks forward to working with Russell to drive sustainable value creation for our shareholders."
Raptis adds that the board is also looking forward to "restructuring the business and taking it down new paths”.
“We’ve always looked at taking the business in a new direction,” he says. “The opportunity hasn’t arisen until now and we are embracing it and moving forward with it.”
Raptis Group’s shares, which have languished below 3c for most of the past six years, have risen sharply since the May capital raise was announced, hitting a high of 19c on 19 June after the capital raise was finalised.
Raptis Group shares closed 12.7 per cent higher at 7.1c each today.
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