Simplicity could teach governments a thing or two

Started by Untamed, Jun 08, 2024, 01:37 PM

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Untamed

Simplicity Living has done more for the current housing situation in this country, than any government has done for decades. They are building these rentals at the rate of knots. High quality, sustainable, secure, aesthetically pleasing, community based accommodation that are "homes for life."

If you haven't had a look, I highly recommend that you do. This is an impressive initiative:  https://www.simplicityliving.kiwi/

Latest news:

Opening of Range View Road
Simplicity Living, the Build to Rent developer owned by Simplicity KiwiSaver and Investment funds, recently opened its third Build to Rent development in Mt Albert.

The 51 one, two and three-bedroom apartments were built in 12 months, at least 30% below average build costs, and well in excess of the building code.


New building productivity hub

Next month, Simplicity Living will open a new productivity hub at its latest development in Mt Wellington, Auckland. Aiming to help other developers, industry leaders, and policy makers, the hub will showcase how Simplicity Living has improved the timeframes, cost and quality of its projects.

"New Zealand desperately needs more houses," said Shane Brealey, MD Simplicity Living. "We're opening this to share our methods and efficiencies so more homes can be built, faster."


I am seriously impressed. Just goes to show what can be achieved when people think outside the square, and don't muck around. They just make it happen.

BlackPeter

Quote from: Untamed on Jun 08, 2024, 01:37 PMSimplicity Living has done more for the current housing situation in this country, than any government has done for decades. They are building these rentals at the rate of knots. High quality, sustainable, secure, aesthetically pleasing, community based accommodation that are "homes for life."

If you haven't had a look, I highly recommend that you do. This is an impressive initiative:  https://www.simplicityliving.kiwi/

Latest news:

Opening of Range View Road
Simplicity Living, the Build to Rent developer owned by Simplicity KiwiSaver and Investment funds, recently opened its third Build to Rent development in Mt Albert.

The 51 one, two and three-bedroom apartments were built in 12 months, at least 30% below average build costs, and well in excess of the building code.


New building productivity hub

Next month, Simplicity Living will open a new productivity hub at its latest development in Mt Wellington, Auckland. Aiming to help other developers, industry leaders, and policy makers, the hub will showcase how Simplicity Living has improved the timeframes, cost and quality of its projects.

"New Zealand desperately needs more houses," said Shane Brealey, MD Simplicity Living. "We're opening this to share our methods and efficiencies so more homes can be built, faster."


I am seriously impressed. Just goes to show what can be achieved when people think outside the square, and don't muck around. They just make it happen.

No question: No government (ANY government) is good in building houses.

How could they?
They are typically a bunch of loud mouths without any relevant experience elected for making promises they anyway can't deliver on. 
Neither they nor the underlying bureaucracy has any relevant skills to deliver good houses (or anything else) - and there is as well no incentive for any of them to deliver good and cheap houses to live in.
Doubt as well governments can learn. They come in on making promises they don't deliver on, they do something else than what they promised and then they get booted out. In comes the next similar unsuitable bunch.

So - great and laudable to see some private initiative to build affordable houses for rent.

I do wish them to be successful, would however point out that we have seen so far only one side of the story (from the seller). Some of the issues which went through my head when looking at the pictures are:

Buildings with flat roofs in NZ have typically problems with water tightness. NZ building standards are expensive but not very useful, and relying on NZ workmanship if often like playing Russian roulette 
(remember the leaky building crisis?). Most of these problems show only after the first decade or so.

Multi party buildings require significant higher standards in noise insulation, particular if people move in who are not used to living together with other people. Do we know they considered that?

Some of the pictures seem to show sinks on brick walls without splashbacks. I wonder how they look in a couple of years.

Anyway - a laudable attempt and I hope it works for them and their renters. Time will tell.

 

Untamed

Quote from: BlackPeter on Jun 08, 2024, 02:46 PMAnyway - a laudable attempt and I hope it works for them and their renters. Time will tell.


If you ever get a chance to go to one of Sam Stubb's Roadshows, go! I went to one recently where he outlined Simplicity Living etc, and asked more than my share of questions. One thing they are, is very transparent and happy to elaborate on whatever people want to know.

I can't lay my hands on the info right now, but they built these to exceed all aspects of required building standards. They also install top quality whiteware - no Warehouse type brands. Again, I can't remember the details, but they have not taken shortcuts with these. Their goal, and expectation is for them to last a very long time, with minimal maintenance requirements.

Here is a snippet from the website:

Simplicity Living follows a low-cost, efficient building strategy developed over many years by its predecessor, NZ Living. The intellectual property of NZ Living was gifted to start Simplicity Living, and all the staff transferred too.

The building strategy allows Simplicity Living to the build significantly below average market costs per square metre, and to a very high quality.


By the way, I don't think that's brick - looks like tiles to me.

Stoploss

Not hard to beat the Kiwibuild numbers .......

Buzz

Does Simplicity invest in these properties using their customers Kiwisaver funds, or is there some ring-fenced fund specifically for the property development?
Age is not a good measure of ability

Untamed

#5
Quote from: Buzz on Jun 08, 2024, 05:56 PMDoes Simplicity invest in these properties using their customers Kiwisaver funds, or is there some ring-fenced fund specifically for the property development?

More detailed explanation here:

https://simplicity.kiwi/learn/updates/simplicity-living

This is an historical article - they have already delivered several locations and have several more under development. Current rent info is provided in the link I provided earlier, for the locations already tenanted.

Buzz

Quote from: Untamed on Jun 08, 2024, 06:05 PMMore detailed explanation here:

https://simplicity.kiwi/learn/updates/simplicity-living

Thank you, this kind of answers my question. The supplementary question might be, how much of the Kiwisaver fund is directed into Simplicity Living, and do Simplicity Kiwisaver customers know about this.

"Who owns Simplicity Living, and who will manage it?

The homes will be built by Simplicity Living. Certain funds within the Simplicity KiwiSaver Scheme (not including its default fund), and the Simplicity Investment Funds, own and provide funding to Simplicity Living through a wholesale funding arrangement."


I'll ponder whether I would want my Kiwisaver invested in building houses. Maybe if I knew whether it was opt-in, how much, what %, and what returns are expected.
Age is not a good measure of ability

Untamed

Quote from: Buzz on Jun 08, 2024, 06:11 PMThank you, this kind of answers my question. The supplementary question might be, how much of the Kiwisaver fund is directed into Simplicity Living, and do Simplicity Kiwisaver customers know about this.

"Who owns Simplicity Living, and who will manage it?

The homes will be built by Simplicity Living. Certain funds within the Simplicity KiwiSaver Scheme (not including its default fund), and the Simplicity Investment Funds, own and provide funding to Simplicity Living through a wholesale funding arrangement."


I'll ponder whether I would want my Kiwisaver invested in building houses. Maybe if I knew whether it was opt-in, how much, what %, and what returns are expected.

I can't find my notes from the roadshow, but just looked at my KS "where is my money?" - my balance is around $43,500 and I have $945 invested in Simplicity Living. So a very small percentage, and I am happy to contribute. I am not sure if there is an opt out option but I think I do recall Sam mentioning that they will only ever be investing a very small percentage. When I get back from my holiday I will email them for clarification.

Regardless, I feel very confident that they know what they are doing and I am happy for a small part of my KS to support it. If I ever find my damned notes I'll post more details.

Untamed

An email from Simplicity in response to a question I asked them a while ago:

Thanks for your message about your investment with Simplicity.
Both the Simplicity Living Ltd Redeemable Preference shares and Simplicity Living Ltd Ordinary shares are issued by Simplicity Living, a property developer and manager.

Simplicity Living issues the Redeemable Preference Shares to compensate investors with and over the development and construction phase of the new properties. Once the property is completed, these are converted to Ordinary shares.

The Ordinary shares reflect the performance of the business and captures the income received (via rents), property revaluations, and operating expenses. Members are invested in both forms of shares via the diversified funds they invest in.

We don't have any plans to publicly list Simplicity Living but it is available to invest in via our Homes and Income Investment fund.

Buzz

Quote from: Untamed on Jun 08, 2024, 06:26 PMAn email from Simplicity in response to a question I asked them a while ago:

Thanks for your message about your investment with Simplicity.
Both the Simplicity Living Ltd Redeemable Preference shares and Simplicity Living Ltd Ordinary shares are issued by Simplicity Living, a property developer and manager.

Simplicity Living issues the Redeemable Preference Shares to compensate investors with and over the development and construction phase of the new properties. Once the property is completed, these are converted to Ordinary shares.

The Ordinary shares reflect the performance of the business and captures the income received (via rents), property revaluations, and operating expenses. Members are invested in both forms of shares via the diversified funds they invest in.

We don't have any plans to publicly list Simplicity Living but it is available to invest in via our Homes and Income Investment fund.


That's very helpful, thank you.  :)
Age is not a good measure of ability

Raven

Simplicity also have a special investment fund dedicated to building and financing housing, with a social and community aspect.

https://simplicity.kiwi/investment-funds/funds/homes-and-income-fund

ValueNZ

Quote from: Buzz on Jun 08, 2024, 06:11 PMI'll ponder whether I would want my Kiwisaver invested in building houses. Maybe if I knew whether it was opt-in, how much, what %, and what returns are expected.
How much money can there be in building rental houses...

Simplicity won't be getting my Kiwisaver funds.

Untamed

#12
Quote from: ValueNZ on Jun 08, 2024, 10:08 PMHow much money can there be in building rental houses...

Simplicity won't be getting my Kiwisaver funds.

Did you look at any of the links I shared? And read any of the information there?

I am disappointed in your attitude to be honest. Nobody is saying you should participate in this initiative, but I did think you were mature enough, and open minded enough, to at least familiarise yourself with the details, and appreciate the significance of what Simplicity is achieving.

We all invest to make money, but some of us are happy to do some good for others, along the way.

Dolcile

I quite like it -  I just wish they would disclose more information about the financial performance of the development / rental company. 

Untamed

#14
I received an email from Shane Brealey, the Managing Director of Simplicity Living, in response to my email. He sent me a multitude of documents and spreadsheets, including budget/financial details, which may interest some of you.

His general comments:

I received your enquiry and attach some information we regularly share.  We are in the process of updating and tightening this.

It has taken 35 years and many good people to arrive where we have and now the team of young guns is carrying this forward.  We still have much to learn and continuously improve.
The key to it really is to get the basics right, keep things simple, work with the same capable people and aim to eliminate waste that is so prevalent in our industry.  There will be many people that will challenge our use of say F&P appliances, concrete structure, brick cladding, fan coil units for aircon etc.  Why not mass timber structure, passive house design, OSM, various different façade materials etc?

We have views on all this stuff, rightly or wrongly.

What we do know with some confidence is that there is no-one that we know that is coming even close to the speed of home letting (high resident demand), fairness of rents, durability of building design, low cost of maintenance and overall financial performance of residential developments.  This goes straight to the benefit of our KiwiSaver/investors whilst at the same time we are providing more affordable secure tenure housing in large numbers.

I am in Europe at present on a working holiday and have met with many people here and in Australia – no-one is producing outcomes like we are.  And its all just from keeping things simple and doing the basics well.
Your group might want to visit our Productivity Hub at our Reiputa project some time.  This opens 1 July and bookings will be open shortly.  A link to this will be provided on LinkedIn via both Sam and I.  It sets out in full life scale how we are achieving what we are.

I figured out how to add attachments so have attached some of the documents Shane sent me. Unfortunately the rest are too large (there is an attachment size restriction). If anyone would like to see them PM me and I can email them to you.