April 2016
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Palm Springs flourishing Page 10
Stonewood buyers mean business Hugh de Lacy The Chow brothers and their Inno Capital partner Clint Webber were looking for an entry into the new home market even before the receivership of Christchurch-based Stonewood Homes gave them the opportunity, according to David Kelly, the CEO of Registered Master Builders. Webber, and Michael and John Chow looked like white knights to the creditors owed $15 million and the 110 clients left in the lurch with unfinished homes, when they bought Stonewood after the country’s third biggest home-builder went into receivership in February this year. While the timing may have seemed opportunistic, Kelly said the partners were “clearly serious about being a player in the residential construction market”.
Inno Capital is the existing owner of a range of investments that includes commercial property and hotels, and extends to strip clubs. Although Wellington-based, it seems to have its eye particularly on the still-bubbling housing markets of Christchurch and Auckland. Stonewood is the number two home-builder in Christchurch where the master-franchising company is based, and number three nationally, with nearly 6000 completions to its credit. Inno Capital has said it wants to make Stonewood number one nationally. Kelly said that in his dealings with Inno over Stonewood, where all the uncompleted houses were covered by Master Builders’ homeowner’s guarantee insurance, “they’ve been really professional”. “They’ve come in, they’ve been very serious,
they’ve done everything they said they were going to do so far, and they’ve got on with getting the houses back under way.” In the wake of the Inno purchase, three of the 15 Stonewood Homes franchises – the West Coast, New Plymouth and Blenheim – were cancelled, cutting founder Brent Merrick and his wife Sue out of the business. However, Inno has re-hired Stonewood’s highpowered chief executive Warwick Isaacs, recruited barely a year earlier to sort out the company’s troubles. Isaacs was formerly CEO of the post-quake Christchurch Central Development Unit, and will be with the company for at least six months. He was the most prominent of several executives whom Stonewood hired in March of last year to get it out of its deepening crisis.
Master Builders’ Kelly believed that the collapse of the original company was a classic case of it taking on too much work at fixed prices while its costs were going up. “You get in a squeeze where material costs are going up, sub-contractors have plenty of work so they put their prices up, and the killer is that you can’t get the subbies when you need them,” he said. With the market at an 11-year high and nearly 30,000 new homes being built a year in the face of record long-term immigration, Kelly said Stonewood had “put pursuit of market share ahead of business fundamentals of matching output to cashflow”. By contrast, Inno Capital “have strong balance sheets and they have got good cashflow,” Kelly said.
Auckland’s house prices ‘catch breath’ Chris Hutching Latest Quotable Value statistics show Auckland house values down 0.2% over the past three months. Century 21 New Zealand national manager Geoff Barnett says the movement is predictable given Government and Reserve Bank restrictions which came into effect late last year. But he says it is only a slight softening and takes a real estate marketer’s optimistic view from a vendor’s perspective - albeit more young people are being priced out of the market. Overall Auckland’s house values are up nearly 17% on a year ago, he says. “I still believe 2016 will be relatively strong across New Zealand when you consider real estate in many of the regions is performing well, interest rates remain low, and Auckland’s relentless population growth continues. “What we’re now seeing in the Auckland market is actually more sustainable and more realistic. “The real story from QV’s latest average house values is that overall the rest of the country has seen a bit of lift in the last quarter – particularly when you look at the likes of Hamilton, Tauranga, Hawkes Bay, Nelson and Wellington.” “We’re seeing some real excitement in the capital with many properties now selling well over valuation, while Auckland’s more central suburbs are effectively catching their breath.”
INSIDE
Marina work powering ahead.... The Stage II extension of the Bay of Islands’ Opua Marina is well underway. The existing marina was built about 15 years ago and the extension will provide an increased number of monohull and larger catamaran berths. A 270-metre floating breakwater is included in the
Manuka products on the rise - PAGE 2
Meet the Mother of Brewing - PAGE 3
marina extension to protect the new berths. Another part of the project will see newly reclaimed land used for the construction of a boardwalk, landscaped esplanade, retail outlets, residential apartments, additional car parking and an expanded hardstand for the boat yard. Story page 4
Excitement on Quail Ridge - PAGE 6
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