This apartment site was shut when the Herald visited today and subbies are complaining about not being paid. Video / NZ Herald
Kāinga Ora has taken control of four residential projects for 91 new apartments previously being constructed by housing developer Build Partners, the state housing agency says.
Kāinga Ora construction and innovation general manager Patrick Dougherty said three projects in Auckland and one in Wellington were now in the Crown entity’shands.
“We were contacted by a number of Build Partners’ subcontractors because they had not been paid,” Dougherty claimed.
Build Partners' Ōwairāka site in Auckland where Kāinga Ora has stepped in after subcontractors were left unpaid.
“Since then, Kāinga Ora has had many meetings and calls with Build Partners to gather information about its situation as prompt payment to subcontractors is a commercial contractual obligation for all development and construction contracts with Kāinga Ora,” Dougherty said.
Kāinga Ora had struck an agreement with Build Partners to take possession of the social housing development sites they were contracted to deliver, Dougherty said.
How much subcontractors are owed is not clear.
“We are reaching out to all known subcontractors to confirm the information that we have been provided by Build Partners is correct,” he added.
Companies Office records show Build Partners is 99 per cent owned by Property Partners, a modular building business hailed as an innovative beacon by the previous government’s construction sector accord for its methods.
Property Partners Group chief executive Steve Mikkelsen did not respond to emails or calls from the Herald yesterday or today asking about subcontractors’ payments.
Patrick Dougherty, general manager of construction and innovation, of Kāinga Ora. Photo / Michael Craig
Last week Mikkelsen said: “We are working closely with [Kāinga Ora] and we are in agreement there will be a positive outcome for all involved in the next few days.”
Problems were not related to modular construction, he said last week.
Kāinga Ora’s move comes amid the Government-ordered, Sir Bill English-led inquiry into the state agency.
The under-construction apartment project locations are:
Corner Great North Road/Cadman Avenue, Waterview: 40 units and a community room;
Hindmarsh St, Johnsonville: 29 units and a community room;
Fowlds Ave, Sandringham: 15 units;
Corner Hendon Ave/Hargest Tce, Ōwairaka: nine units.
Property Partners Group featured in an accord series on “businesses which provide examples of good practice and innovation to the sector so that lessons can be shared to help raise others’ capability”.
Build Partners' site on the corner of Hendon Ave and Hargest Tce in Auckland. This site is one of four taken over by Kāinga Ora after subcontractors were unpaid.
Last year, the Herald reported how construction was advanced on the first six-level $90 million block by Property Partners, with another two planned to be built on neighbouring sites near the intersection of Hendon Ave and Richardson Rd, Ōwairaka.
Modular units were being made in a Wiri factory, then trucked to the site and craned into place, one on top of the other.
Mikkelsen said at the time he had hunted globally for the best modular apartment technology and eventually decided on the Swedish system.
Tough construction market
Kāinga Ora’s Dougherty said market conditions had changed significantly over the past 18 months.
“Kāinga Ora recognises the impact this is having on many businesses in the construction sector.”
A number of construction companies have already run into difficulty this year.
Selah Homes called in Waterstone Insolvency this month, citing poor health, cash flow problems and spiralling cost increases.
It built homes at waterfront locations, at Riverhead, and in new subdivisions.
In January, Franklin Homes (Franklin) ceased trading.
Applications to build new homes have fallen sharply.
Stats NZ information showed consents were issued for 37,000 new residences in the year to December, down 25 per cent from the 49,538 consents issued a year ago.
Dougherty said Kāinga Ora had delivered nearly 2000 new social houses in its current financial year to the end of February 2024.
“We have just over 6400 additional new homes contracted or under construction for completion by the end of June 2025.”
To achieve that, the Crown agency had commercial contracts with private developers and construction companies, who in turn hire subcontractors such as carpenters, electricians, painters, roofers and many more, Dougherty added.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
