Vietnamese modular units for new terraced housing in Auckland are planned to be installed in the next six weeks at Hobsonville Point, four months ahead of time and 20 per cent cheaper than traditional builds.
Chris Aiken, formerly chief executive of Hobsonville Point developer HLC, has become a build-to-rent investor developing the new places.
“The whole process will have taken about six months, including with Covid delays. I’m getting better quality faster at a competitive price,” he said.
“These places are about a 20 per cent improvement on current construction cost – that much lower-cost to build,” he said of his project and the units had arrived four months ahead of schedule.
His investment business, Hurstmere Property Trust, is developing the places.
For eight years, Aiken was chief executive of the Hobsonville Land Company which later became HLC and master-developed Hobsonville Point. HLC has since been merged into state house owner and provider Kāinga Ora Homes and Communities.
Aiken said he is a trustee and the entity he’s using is a family trust.
He bought land and plans for the two-level units on Walter Merton Rd because the site had previously been owned HLC which sold it to a developer for the new homes.
“Kāinga Ora created the opportunity. They sold the land on the basis of an innovative construction methodology being used here,” Aiken said.
Aiken himself grew up in a Christchurch state house so has first-hand experience.
But state tenants will not rent the units, instead the homes will go on the private market.
Aiken stressed he had not bought the site directly from the state. Another developer bought the land from HLC, he said. Aiken is an advisor the state house entity. HLC has since become part of Kāinga Ora but Aiken said the two were separate legal entities at the time he bought the property.
The homes will rent from about $600/week to $700/week.
He bought modular units from TLC, which is also supplying the state home entity with dozens of places.Aiken expects it would only take about two days to “drop” them on the site once the traffic plan had been consented.
Aiken was TLC’s establishment chief executive “to get the business set up here and I did that under a contract”.
“We’ll be installing the units in the next six weeks. The groundworks and foundations are done. All the modules are in New Zealand and they’ll come to the site from Northport when I’m ready.”
TLC Modular, partly owned by Goldman Sachs, plans to import 182 fully-built-up housing units on four ships arriving this winter from Vietnam and stack places on top of each other on the corner of Lake Rd and Fraser Ave.
Aiken has had his new units shipped to Whangārei to save on shipping costs and time and expects they’ll be finished and ready to live in around the end of next month “by the time I’ve finished putting the petunias in the garden.
“I’ve been a proponent of modular housing for five or six years since I first came across the concepts at HLC and I’m now using it as an opportunity to put my money where my mouth is.
For apartments and terraced homes with a standardised form, modular units “are an excellent solution”.
Asked about the failure of Integrated which went into liquidation bringing units here from Australia for Kāinga Ora, he said he didn’t know any details about that.
But for Government entities like Corrections and Defence, modular would allow expansion in the development sector.
“I can do a lot of different things with the balance of my life. I want mine and other people’s kids to have a fair crack at the housing sector. We have to keep leading out of our generation. Without that, we’re not going to get families into good dry, safe homes. What we’re currently doing isn’t working and I’m very pleased to do that personally.
“I devoted a lot of my life at HCL to affordable, good housing and I’m in good company. How do we crack this high-cost complex construction sector we’ve already got? Kāinga Ora is certainly leading the charge on that and trying to address the whole housing system.
“The challenge for the sector is that Covid and inflation hit modular because it hammered container shipping and steel costs,” he said, particularly in Australia, Europe, the United States and Asia which suffered substantial shutdowns and labour shortages.
Although the effect was dramatic, it would only be temporary, Aiken predicted.
The sector had lost about a year and people buying modular early were most affected.
Modular was 50 per cent faster and 20 per cent cheaper as a rule of thumb, he said.
“Existing builders who are sceptical about modular – I don’t blame them. But 3D modular is a different world than panalised modular. 3D modular is completed in a factory and arrives on-site almost fully built apart from the facades is 50 per cent faster. “I’ve got a history of people laughing at what I do. People used to say it would be a failed experiment.
“The Government has a significant role in leading with these projects. It might be a couple of million here and there, but over an industry worth $30b a year, if we can improve that by 20 per cent that’s a $2b saving for house buyers and that’s going in many cases for first home buyers. I’m happy for my taxpayer money to go into that,” he said.
Nearly 50,000 homes are being consented annually, he noted.
“Why the Government? They’re big enough to do the scale and globally it’s Governments leading this. It’s never a good story when any project runs over, but in the private sector there are cost overruns and no one’s going to call you with that story.”
More than 200,000 people are housed in around 60,000 state houses, most owned by the state but some rented from private landlords.
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