Just as Blair and Jules rose to the challenge of finding a new way of building rental housing, the project also required ANZ to re-think its approach to lending on such projects.
Our lending usually relies on pre-sales of apartments and an acceptable margin, but with a built-to-let project like 26Aroha, that clearly wasn’t going to work.
Instead, we had to take a wider perspective, taking into consideration long-term cash flow, the size of the debt on completion and the income from the apartments once tenanted.
In this case, we looked at cash flow forecasts for the next 20 years, including the building’s overall running costs and expenses.
This helped us understand how the project could work from a financing perspective.
There was also the additional costs of sustainable materials and the innovative technology and techniques that made the project so environmentally friendly and energy efficient.
These added to the cost of the build, but taking a long-term view allowed us to factor in the payback from these features and acknowledge the value they provided in reducing the overall running costs of building.
In many ways, it has provided a proof point for us, showing that the environmental and social aspects of developments can and should play a strong part in our funding decisions.
Since completing the project, Blair and Jules have been inundated with requests from people wanting a tour of the building - and it’s easy to see why.
From architects to schoolchildren, local councillors to Kainga Ora, in many ways 26Aroha has become a flag-bearer for how green and tenant-focused apartments can work.
It’s great that Blair and Jules were able to bring ANZ in on the project early in the process and that we were able to work with them to achieve such an amazing outcome.
They were meticulous in their planning and engaged some of the top professionals in the field to help, so it’s no accident the project came in on budget and ahead of time, and with all 13 apartments now leased.
In many respects – especially its social and environmental credentials – 26Aroha has raised the bar, and more than fulfilled the brief of making rental housing a first-class option.
It’s also likely to inspire other developers to think in different ways, especially as they focus their energies on build-to-rent developments in the coming years.
While no one initiative will solve the country’s housing crisis, it is clear that every additional high-quality home will help in a small way to rebalance the housing equation.