aenspire delivering developmentprofit.com

In the space of a decade the company delivered over 1000 homes at Hobsonville Point. I was there for about six and a half of those years. This project being the last completed under my watch as CEO.

A few things to note when doing large blocks (a superlot) of homes at the same time – 50 to 100 units.

1. Think boutique. They don’t all have to look the same. Small blocks designed to look like they evolved over time. Varied floor plans and aesthetics contribute not only to a more pleasing streetscape but it also comes in handy in softer markets to move unsold stock.

2. Think small. If you were designing your dream home, you would naturally focus on the external context – right? Where the sun hits, the view, the best outlook, outdoor living space etc. you would pay attention to every window- down to what you will see when looking from the kitchen sink. However when designing 100 of them, its very easy to focus inwards on the site plan-without explicitly addressing the context of each unit. But you must. The DM and designer needs to address external context on every single unit.

3. Think value. An end unit allows more windows- don’t waste that opportunity with a 2 beddie, when you can now enable a 3 bed. Pay attention to the joal- the landscaping, the bin enclosures etc (albeit always an argument of cost versus function versus look)- for many this is their front door. And when doing inclusionary zoning -Axis Series they called it at Hobby- where buyers enter a lottery to effectively win 200k of equity – don’t put those units in the best locations! You need to maximise value by placing the market rate units where they can command the highest price.

This was a circa 130 site project that I took over project and development management in Flat Bush. About half under house construction and the other half under design and civil work.

The original contractor operated a modular/panelisation factory. They went bankrupt and just prior to me joining 5 smaller builders each on their own contract were appointed. Most of the houses under or about to start construction were sold, so the clock was ticking to complete and get titles and ccc.

So every second Tuesday I would rock up to six different bank qs/contractor progress/drawdown meetings. 5 house builders and one civil contractor.

The houses were pretty much identical, but how each builder treated the plans, the contract, variations, the programme, their subbies, me and my assistant was completely different. Massive learning experience on that front- in perfect real world test conditions. There were two other projects I was delivering at the same time, so I had live data points on 7 different house builders and 2 different civil contractors.

This project had significant and complex negotiations to take place on various fronts to reach settlement day and 224c. Council, purchasers, other land owners, watercare- you name it. Through persistence and persistence and persistence and collaboration we got there.

A lesson: You can save tens, hundreds, thousands of thousands, maybe even millions, and a whole heap of heartache if you do this one simple task before you start construction, after you have indicated who you intend to award contract to but before signing. Sit yourself, the architect, the builder and their site QS down and go through the plans like a workshop. If the builder wants anything changed (talking details, not design) get the architect to do it. Clarify all the niggly details and identify mistakes early. Nothing more expensive than blaming the plans once the project is coming out of the ground.

An ancedote: when thrusting under the main road to build the neighbors 800m long sewage pipe through their site (one of those negotiations!) on the first day the drill hit metal, deep below the road. Solid metal. Bang. A previous civil roading contractor had left the/a temporary steel trench protection sheilds underground! Ouch. Our civil contractor was a legend though and he could sort anything out.

This project. The Grove, in Papakura, Auckland I took over development management/ project direction and a month later also project management (to improve builder to client communication) for 36 houses under construction and about 60 sites under civils and initial design/feasibility for a further 50 sites/homes to replace a temporary stormwater pond whilst council finished an adjacent wetland/stormwater management area.

One builder this time, steel frame. That eventually seemed to work ok. However, a build contract that was ineffectual so everything became a negotiation.

Strategic anecdotes:

When house sales dried up at the prices required, using a project marketing approach I took a micro approach. Individual homes were given to aggressive local agents, one per agent, each one staged and marketed in their own way and dissapated the staleness of the original campaign. That eventually worked.

Stage two, instead of preselling homes and land, we presold land only to smaller builders. At that market there was a little bit of positive arbitrage compared to hiring a main contractor and building ourselves. The resource consent was an integrated one so all the homes were designed to match the overall aesthetic of the development. What we supplied was the land with titles, with reserve contributions sorted and almost ready to lodge building consent plans- using timber construction to maximise the number of potential buyers. Ready to lodge – so they took on all the risk on the accuracy of the plans but could also adjust to suit their details and techniques. They all sold at good prices.

Learnings:
When I took over the project the conditions required to satisfy 224c was quite onerous but some sections had already been sold with sunsets. And the two no longer matched. I reckon I needed another six months!

The race was on and there was neighbors infrastructure agreement reneged on, a pumpstation to create, thrusting a water main half a mile down the road, getting agreement from parks on top of all the usual conditions. Lets just say Veolia got sick of me turning up to their offices!

The heat was on. I still can’t believe it but we got 224c a week before the sunsets expired. Why is this important? Because since purchasing the sections the housing market had declined…..

I have a system for dealing with obtaining 224c, mainly its coordination and persistence and a load of structure – but that is for a different day.

As a former CEO of Universal Homes, building hundreds of homes including walk up apartments over the last seven years, I have come to an enlightening conclusion with regards to that what Shane Brealey has achieved with Simplicity Living. The design, method of procurement, construction, tradie interaction and project management with a constant focus on improvement -aka kaizen Toyota- canNOT be replicated by any existing construction firm in New Zealand.

And that means no other firm can secure the substantial cost savings he does in providing mid-level apartment buildings to the build to rent market, or the for-sale market for that matter. I know this for a fact, I sure tried.

I have poured over every detail in his plans, from layout efficiencies to construction junctions. I understand the way he procures and manages the projects. I used experts to reverse engineer every element. I have seen the feasibilities (that’s ridiculous I USED to say) and I have seen what he can pay for land.

My conclusion is simple, easily explained by these four constraints that affect everyone else:

Firstly, the only way to replicate what Shane is done is to first throw everything you currently do in the bin. Every preconception about how people work together and inherent bias, founded on generations of an industry that doesn’t really change anything, but constantly tries using new methods whilst still embedding old attitudes. That gets rid of 90% of the players – because they won’t or more than likely structurally can’t do that.

Second, you need to start again with one person making every single decision. That person needs to understand the complete development ecosystem from tenant needs & management to funding, urban design, architecture, project management to site management and even to the resource and process every subbie performs on site, as well (phew) to the logistics and perhaps even manufacture of every component involved in the final build. Of course, this initial micromanagement actually results in complete hands-off delegation once the decisions are ingrained. Many decisions already made never have to be made again because…

Thirdly, consistency. Every project builds on the previous project. Every project moves forward substantially similar to the one before with subtle improvements. Improvements created -no doubt- by a team in synergy, getting that extra 1% here and there. There are no other ‘different’ projects clouding the production line (from CEO to plumber). Rather than changing everything all the time, improvement is incremental, step by step. And that is greatly helped because of….

Fourth, continuity. You need the team to continue the journey without delay, without downtime, with a pipeline that allows every player to work together (yes subbies advising other subbies!) to get faster/more productive/more quality conscious, because they (everyone!) know they will make more money the next time around from their own productivity increases.

So, unless you are ready to start again, have one key person run the entire show and then get 700 units under your belt doing the same thing every day, what Simplicity Living through Shane and his devout followers has achieved is next to impossible.

Not trying to kiss butt, just saying it as I see it. Could I be wrong?

Andrew Crosby

https://simplicity.kiwi/learn/updates/simplicity-living-oranga?gad_source=1&gclid=EAIaIQobChMIpdqdqLnchQMVuxJ7Bx3FkwD3EAAYASAAEgJApPD_BwE

Xpect Connect. Auckland City Tender Prequalification Results. After running through the results the terrace home developer will be issuing tenders to 3 of the parties prequalified using Xpect Connect.

Testimonial attached.

http://aenspire.com/xpect/xpectconnectReference.pdf