Generation Homes embarks on rapid expansion plan

16 May 2012

Generation Homes embarks on rapid expansion plan

In a market which has seen several well-known building franchises fail, national home building company Generation Homes is forging ahead with its large-scale expansion plans for five new offices in four regions across New Zealand.

The expansion over the next six months is planned for Manukau, Waipa and the Coromandel, West Auckland and also includes the company’s first venture into the South Island, with two offices scheduled to open in the north and south of Christchurch.

In 2009 Generation Homes took on 10 joint venture partners in quick succession within 16 months. The five new businesses will bring the number of Generation Homes joint venture partnerships throughout New Zealand to 15.

Generation Homes CEO Kevin Atkinson says while the residential building market has improved and confidence is lifting, these are not the influencing factors behind the company’s growth.

“We always planned to establish businesses in these regions regardless of the market. The recession went on longer than anticipated and it put our plans on hold for six to nine months, but we are now geared up to continue our growth strategy.”

In the last 15 years Generation Homes has built almost 2000 homes and 100 communities across the breadth of the North Island.

Atkinson says, “Where possible we work with local suppliers in all the areas we operate in so that as much money stays in the local communities as possible. Our plans are ambitious with our ultimate goal to build one in every 10 homes in New Zealand – that is almost 3000 homes a year, which is 10% of the market share.”

The thinking behind the new office locations is simple, says Atkinson. “In Auckland there is pent-up demand for housing which will only gather momentum as the real estate market becomes tighter. We have an existing presence in Papakura and Orewa and we believe a high volume of people will look to new builds to fill the housing gap.

“In regards to the Coromandel and Waipa areas, the opening of an office to cover those regions ensures Generation Homes can now offer a complete service throughout the North Island, bar the Hawkes Bay, which we will look to take care of in the near future.

“The next step was always Canterbury regardless of the opportunities the rebuild now offers. Christchurch is still one of the major cities in New Zealand and is an obvious first choice for Generation Homes’ expansion to the South Island,” says Atkinson.

Generation Homes Manukau is the first of the new regions to open the doors to a show home. On May 25 the new show home will open in the popular Wattle Cove subdivision. The directors, a husband and wife team Rod and Jess Lalich, are already directors of Generation Homes Papakura and Franklin.

Generation Homes was established in Tauranga in 1997 by electrician Graham Hockly and builder David Mansel.

Graham Hockly says, “When we started out our plans for expansion and growth were quite small, but as we exceeded our annual sales targets each year there was only one way to go and that was to grow our business by setting up in other areas.

“The basic reason behind using joint venture partnerships to expand was as the business grew outside of Tauranga it became too hard to manage the areas successfully from a distance, so we decided it would be a good idea to have someone local running the business New joint venture partners put up an affordable license fee, along with the first year of working capital – this gives them 50 per cent ownership of the joint venture and a 50 per cent share in its profits. In exchange, they receive an exclusive license to operate within their prescribed territory and all of the building and business management systems that have won Generation Homes some business awards,” says Hockly.

Kevin Atkinson says although Generation Homes took on the majority of joint venture partners in 2009, during what could be considered by some as hard times, all of the regions have survived the recession.

“Our joint venture partners understood the opportunity of going into the industry at the bottom, doing it hard for a couple of years, but being there to get the uplift when it happens and we are now doing just that,” Atkinson says.

Generation Homes is the only joint venture building company in New Zealand. In the past, this unique business model has won numerous awards including the Westpac Tauranga Business Growth award and the Westpac Supreme Business awards.

Atkinson believes the Generation Homes model is the key to its success.

“We deliver what we promise. We build one-story homes in 14 weeks and two-story homes in 18 weeks. We deliver a complete home, including the letter box, landscaping and trimmings, and we have a fixed price.”

All regions will open their new show home doors before the end of October.

ENDS

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