Du Val Group is planning to use $100 million of institutional financing secured from Canadian asset manager Fiera Capital to complete three Auckland townhouse developments.
Montreal-based Fiera, listed on the Toronto stock exchange, had assets under management of C$158.3 billion (NZ$199b), at its last reporting period in September.
Du Val's chief executive, Kenyon Clarke, said the investment reflected the “level of confidence” that major global institutions have in the economic future.
The funding will go towards construction of off-the-plan 79-unit Te Awa Terraces in Māngere East and West Auckland’s Sunnyvale Terraces and Edmonton Mews, with a combined 103-units.
Initial public offer
The three developments follow Du Val’s 151-apartment Lakewood Plaza in Manukau, 119 apartments at the Avenue, Māngere, a 101-unit development at Rata Terraces, Papatoetoe, and a 33-townhouse development at McKenzie Terraces in Māngere Bridge.
Clarke, who co-founded Du Val with wife Charlotte in 2013, told BusinessDesk in September the firm will be seeking an initial public offer, likely on the Singapore exchange, with a secondary listing on New Zealand’s exchange within the next few years.
Under that scenario, the high-flying couple, who have recently concluded a reality TV show called the Property Developers, would relocate their family, including their four children, from Auckland to Fiji to be closer to their international businesses.
That, Clarke said, would align with the firm’s international plans, including the development of its international 'proptech' venture, Du Val Global.
The property developer also operates a funds-management division, under Du Val Capital Partners, aimed at wholesale investors, under a mortgage as well as build-to-rent fund.
Finance and funds under management are estimated at more than $250m. Its large-scale apartment developments hold an estimated book value of $750m.
500 new homes
Last October, the firm caught the attention of the Financial Markets Authority (FMA) for misleading Instagram advertising in relation to the mortgage fund, which offers a 10% return on minimum investment of $250,000.
The FMA issued a follow-up warning to Du Val Capital Partners last month, noting that some of the eligible investor certificates were incomplete, in that they weren’t signed by a financial adviser, accountant or lawyer.
But Du Val director of property and developments Kristen Holland said the firm expects to deliver 423 homes into the Auckland market during the next financial year, with $300m in contracted new revenue.
He said the firm had a solid pipeline of work extending to about 500 new homes for the 2025 year. With every project now “fully financed” the group was undertaking due diligence on a number of brownfield sites in the southern and western corridors.
Recruiting
Clarke said the firm’s Auckland-centric strategy had worked well for the company, enabling it to maintain margins and profitability, rather than diversifying across different cities and countries.
The comment could have easily been directed at upstart Christchurch residential developer Williams Corporation, which is understood to be cutting overheads and offering redundancy to some of its Australasian staff as it hits only about a third of targeted annual development numbers.
About 120 of Williams’ 200 staff are based in NZ, with the remainder in Australia and Singapore. Williams, founded by friends Matthew Horncastle and Blair Chappell in 2012, is ranked by Pacifecon Building Intelligence as the country’s 14th largest home builder with 1,143 homes built for the year to April.
Du Val, which employs 120 full-time staff in Auckland, featured in 66th place with 256 homes.
Holland said the firm was now recruiting for experienced personnel based on its growth projections.
