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.
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.
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.
Not hard to beat the Kiwibuild numbers .......
Does Simplicity invest in these properties using their customers Kiwisaver funds, or is there some ring-fenced fund specifically for the property development?
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.
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.
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.
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.
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. :)
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
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.
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.
I quite like it - I just wish they would disclose more information about the financial performance of the development / rental company.
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.
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?
They are using kiwisaver funds. My daughter was surprised to find that 3% of her balanced fund was invested in Simplicity Living. Seems high to me, also begs the question to what extent they are a passive versus active investor.
Sam Stubbs seems a very visionary and action oriented sort of fellow. For me he appears in the news a bit too much though. For example, he had a lot to say on Simplicity's behalf about Simon Henry the loud mouth. My thought was he was entitled to his opinion and passion for social good, but I would prefer he did use investor money to achieve them. Some might be happy enough though.
Quote from: Popeye on Jun 18, 2024, 02:16 PMThey are using kiwisaver funds. My daughter was surprised to find that 3% of her balanced fund was invested in Simplicity Living. Seems high to me, also begs the question to what extent they are a passive versus active investor.
Sam Stubbs seems a very visionary and action oriented sort of fellow. For me he appears in the news a bit too much though. For example, he had a lot to say on Simplicity's behalf about Simon Henry the loud mouth. My thought was he was entitled to his opinion and passion for social good, but I would prefer he did use investor money to achieve them. Some might be happy enough though.
of DGL fame who made those of colour comments about Nadia Lim a while back, how Simplicity was going to remove their investments, how he shouldbe fired
You might want to edit your post, as something is clearly missing.
Initially, I wasn't fussed on Sam myself, but having made the effort to attend two of his road shows, I feel very differently. The guy is passionate and committed, and he is most definitely not in this to make money for himself. He thinks outside the square, which is precisely what this country needs, especially our political parties/governments, who seem totally incapable of it.
Read through the Simplicity Living website, and take a look at the attachments I provided - how many businesses would be willing to share that information? I'll wager, very few, if any. If you get the chance to go to a road show, go - ask questions, and you will get answers. Simplicity is one of the most transparent companies out there, and they absolutely
are making a difference.
Shane mentioned in his email, that they use F&P appliances - rather than cheaper brands. He talked about this at the road show. They provide exactly the same appliances in every unit they build, which means they have been able to an excellent deal with F&P (I assume directly rather than via a retailer) to provide appliances at a significantly discounted rate. That deal is long term so if and when an appliance needs replacing, Simplicity will still get it at a valuable discount. Provide quality appliances and your appliances will last much longer. Everything they have done with their builds is designed to be cost effective, low maintenance, and long term.
I do get that people are sceptical - so was I. But not anymore. I am more than happy for a small percentage of my Kiwisaver to be invested in this initiative. There
is money to be made in rentals, and the fact that this is a not for profit company, means returns go straight to us, the shareholders.
Simplicity Living is achieving more than any government has in my life time. That speaks volumes.
Quote from: Popeye on Jun 18, 2024, 02:16 PMThey are using kiwisaver funds. My daughter was surprised to find that 3% of her balanced fund was invested in Simplicity Living. Seems high to me, also begs the question to what extent they are a passive versus active investor.
I understand that not everyone likes Simplicities unlisted housing type investments in their Kiwisaver or other general funds, but they are not hiding it from anyone, and people are free to choose or change their preferred Kiwisaver provider.
I cannot argue with any of the above, all fair points. Anyone who gets quality stuff built quickly in this country deserves respect. Personally, I would want my super fund to be more silent running. I would not want to wonder what share of unlisted housing is appropriate for the fund, and whether it was going to rapidly increase under my nose.
The moral posturing about that dickhead Simon Henry saying some dumb stuff did stick in my craw a bit. I do not believe in stringing people up for putting their foot in their mouth, we all do that on occasion. Stubbs was front and centre on punishing Henry/DGL for basically being rude and obnoxious when making a fair point.
Having said that, I do hope Stubbs and Simplicity go from strength to strength and succeed at housing where so many others have failed. Just not with my money though..
In case anyone is still even remotely interested in learning more about this, here is an email received today from the Investor Services Manager (Simplicity) with a little more info:
Is there an Opt-Out option...
Unfortunately not, however, you can choose how exposed you are by selecting a fund type that has an allocation you are comfortable with.
Is there a maximum percentage you would ever invest...
Absolutely - below I have listed our target asset allocation:
Fund Type Target asset allocation
High Growth 10.00%
Growth 4.50%
Balanced 3.50%
Conservative 2.50%
Default 0%
Defensive 5.00%
What kind of returns can one expect from the Simplicity Living investment?
I'm quoting directly from our Statement of Investment Policy and Objectives (SIPO) which I have attached:
During the development stage, the deemed return on construction is 10% to compensate investors for the cost of capital (including land purchased for development).
Following completion, the rented properties will target a return of 5 year rolling NZ CPI + 3% (Consumer price index). This recognises the lower-risk characteristics of completed residential property, while compensating investors for the associated illiquidity of the investments.
We don't comment on the performance expectations of the individual portfolios that make up our fund types ( i.e. unlisted New Zealand property asset class) as this is subject to uncertainty and risk - However, I would suggest having a look at our non-KS fund type, the Homes and Income Fund, which is still very new so the historical returns data only goes back 3 months - but with a 25% Unlisted New Zealand property target allocation, it provides a good indication of performance - I have attached a couple docs below.
Can you provide some financial details for NZ Living...
So essential NZ Living became Simplicity Living Limited, it is not a partner business - Simplicity Living is owned by the Simplicity Foundation - this information can be located in the NZ company office's register.
I would suggest Googling Shane Brealey, who was the founder and director of NZ Living, there are quite a few articles regarding NZ Living's past development - one of their most recent developments before becoming Simplicity Living was a sizable project in Auckland - here is an article I found
I have attached details of the Home and Income Fund - EDIT: nope, too large again. PM me if you want it.
If you want me to stop sharing/you're not interested - let me know and I will leave it here.
Quote from: Popeye on Jun 18, 2024, 02:16 PMThey are using kiwisaver funds. My daughter was surprised to find that 3% of her balanced fund was invested in Simplicity Living. Seems high to me, also begs the question to what extent they are a passive versus active investor.
Sam Stubbs seems a very visionary and action oriented sort of fellow. For me he appears in the news a bit too much though. For example, he had a lot to say on Simplicity's behalf about Simon Henry the loud mouth. My thought was he was entitled to his opinion and passion for social good, but I would prefer he did use investor money to achieve them (I assume you meant "didn't"). Some might be happy enough though.
Anybody who chooses to invest in Simplicity's Kiwisaver or investment funds, is 100% aware that Simplicity is a not for profit provider, with the primary goal of creating good returns for investors, while doing good in our communities. Some will have chosen Simplicity specifically for that reason, others may have chosen it for the low fees, but everyone knew this. As I said elsewhere, Simplicity is one of the most transparent companies in NZ. I seriously doubt many companies would be willing to share what Simplicity has - for me to share with you here (see my other posts).
I guess the point I'm making is your comment above is kind of unnecessary. If you don't want your money supporting social causes, you wouldn't choose Simplicity.
Simplicity honestly baffles me - I feel like Sam Stubbs uses Simplicity like a personal fiefdom and megaphone. And I'm not saying that he is wrong but the potential conflicts of interest are not what I want from a KiwiSaver provider. I appreciate others have different views
Quote from: Crackity on Jun 19, 2024, 09:59 PMSimplicity honestly baffles me - I feel like Sam Stubbs uses Simplicity like a personal fiefdom and megaphone. And I'm not saying that he is wrong but the potential conflicts of interest are not what I want from a KiwiSaver provider. I appreciate others have different views
Where is the conflict of interest? He is passionate about the company he set up, and the philosophy and values behind it. He is also passionate about fostering and encouraging financial literacy in general, and uses Simplicity to help educate people. What is wrong with that? It is that passion that has enable Simplicity to think outside the square and do things nobody else is doing.
I am not telling anyone to invest with them. But I am really puzzled by the general lack of appreciation for what they are achieving. I don't get that.
Quote from: Untamed on Jun 19, 2024, 10:25 PMWhere is the conflict of interest? He is passionate about the company he set up, and the philosophy and values behind it. He is also passionate about fostering and encouraging financial literacy in general, and uses Simplicity to help educate people. What is wrong with that? It is that passion that has enable Simplicity to think outside the square and do things nobody else is doing.
I am not telling anyone to invest with them. But I am really puzzled by the general lack of appreciation for what they are achieving. I don't get that.
Well the potential conflicts and opacities will be between funding/managing Simplicity Living and the Simplicity KiwiSaver funds. The trustee for these will be supervising everything I presume......
Quote from: Untamed on Jun 19, 2024, 07:10 PMAnybody who chooses to invest in Simplicity's Kiwisaver or investment funds, is 100% aware that Simplicity is a not for profit provider, with the primary goal of creating good returns for investors, while doing good in our communities. Some will have chosen Simplicity specifically for that reason, others may have chosen it for the low fees, but everyone knew this. As I said elsewhere, Simplicity is one of the most transparent companies in NZ. I seriously doubt many companies would be willing to share what Simplicity has - for me to share with you here (see my other posts).
I guess the point I'm making is your comment above is kind of unnecessary. If you don't want your money supporting social causes, you wouldn't choose Simplicity.
I sort of agree (that is why I pulled my money from Simplicity), although I wonder if less sophisticated investors fully appreciate the implications of Simplicity's approach for their house deposit or retirement. Most Kiwisaver investors wont have given this much thought...
Simplicity might find they have a very difficult balancing act between their goals which will not always be congruent. Hopefully they can provide great returns for investors while doing social good.
ps. thanks for he edit, I need to be more careful
Quote from: Popeye on Jun 20, 2024, 08:27 AMI sort of agree (that is why I pulled my money from Simplicity), although I wonder if less sophisticated investors fully appreciate the implications of Simplicity's approach for their house deposit or retirement. Most Kiwisaver investors wont have given this much thought...
Simplicity might find they have a very difficult balancing act between their goals which will not always be congruent. Hopefully they can provide great returns for investors while doing social good.
ps. thanks for he edit, I need to be more careful
Correct. In my experience
most KiwiSaver members give little or no thought to their investment. I used to feel sorry for them and put it down to lack of knowledge, but not anymore. There is no excuse now, for anyone not understanding how KiwiSaver works, or for not being proactively involved in their own. You would be shocked to see the comments I see on various Facebook pages/groups/general posts, by people who still believe the government Is stealing their money, and controls their KiwiSaver. I have spent hours, trying to politely enlighten people but they simply don't want to know. Sometimes it honestly feels like we are living in Trump's America.
So I am sure you are right, but it is their responsibility. If they want to go through life being ungrateful, ignorant conspiracy theorists, who am I to stop them?
This is precisely why we need financial literacy education in our schools, and not just superficial savings education. Solid, age appropriate, in depth education, so that this youngest generation is able to do better.
Yes, I am getting less tolerant of fools as I get older.
Quote from: Untamed on Jun 20, 2024, 08:40 AMCorrect. In my experience most KiwiSaver members give little or no thought to their investment. I used to feel sorry for them and put it down to lack of knowledge, but not anymore. There is no excuse now, for anyone not understanding how KiwiSaver works, or for not being proactively involved in their own. You would be shocked to see the comments I see on various Facebook pages/groups/general posts, by people who still believe the government Is stealing their money, and controls their KiwiSaver. I have spent hours, trying to politely enlighten people but they simply don't want to know. Sometimes it honestly feels like we are living in Trump's America.
So I am sure you are right, but it is their responsibility. If they want to go through life being ungrateful, ignorant conspiracy theorists, who am I to stop them?
This is precisely why we need financial literacy education in our schools, and not just superficial savings education. Solid, age appropriate, in depth education, so that this youngest generation is able to do better.
Yes, I am getting less tolerant of fools as I get older.
I spend a bit of time on the Reddit NZ personal finance sub, and never cease to be amazed at the financial illiteracy it reveals. Staggered a couple of days ago with people asking what a term deposit was. Shocking indictment on our educational and financial educational system... do we have one :)