Ho Chi Minh to Northcote: ‘Southern Hemisphere’s largest modular housing project’

An artist's impression of TLC Modular’s Elevation project on Lake Road, in Northcote, Auckland.

Northcote’s under-construction six-level 183-apartment project Elevation is the Southern Hemisphere’s largest modular residential building development, its units manufactured in Vietnam and then shipped here, its boss says.

Alistair Sawer, Ho Chi Minh-based chief executive and founder of TLC Modular, previously Thao Li International, said the project was on a scale not seen here before.

“It’s the largest New Zealand modular apartment project, the biggest in the Southern Hemisphere and the fourth- to fifth-largest in the world,” Sawer said from Vietnam.

The project is at the ex-Kāinga Ora state house site on the corner of Fraser Ave and Lake Rd and has been the subject of intense sector speculation and scrutiny as sceptical construction sector bosses watch progress.

After sources contacted the Herald with concerns work had stopped around mid-December, Sawer explained that was partly due to the unusual nature of construction, and the holiday period.

Only three to four Auckland Council staff were dedicated to compliance and consenting at the site, and they were away until January 19, so Sawer said work had largely stopped.

“There’s no point burning cash. But the boys will be back at work from January 13 and the subcontractors by January 20.”

Work had begun to fix facades to the first building.

Facade work would continue with an aim for all work to be finished on the first building around the middle of this year and the second in the third quarter, Sawer said.

“We had good support from Kāinga Ora and we’re still focused on that affordable market,” he said, citing prices ranging from $580,000 to above $850,000.

Earthworks were carried out at the Elevation apartment site in Northcote around 2021/2022. Photo / Naylor Love

But TLC was aware of New Zealand’s economic malaise, Sawer said, so had not been pushing marketing hard for some time.

Further marketing of Elevation at 203-225 Lake Rd is planned soon with building completion so close.

A marketing suite would be shifted to the Lake Rd/Fraser Ave corner soon because its existing location would be inaccessible due to construction work, he said.

Naylor Love finished ground works at the site in November 2022 and Sawer acknowledged issues with compliance and Covid had taken a big toll and the hope was that work would be finished by the end of last year.

“We’ve had a lot of delays for various reasons, mainly processing documents and that’s because it’s a new system. It’s not been the easiest. We work in Australia, the US and New Zealand. I think we’ve turned a corner, selling 30% to 40% of buildings at the moment.

“We see New Zealand as a long-term strategy – slow but long-term,” Sawer said.

Each apartment comprises two to three pods, craned one on top of the other, so about 580 modules were manufactured outside Ho Chi Minh City and shipped here.

An artist's impression of TLC Modular’s Elevation project on Lake Road, in Northcote, Auckland.

Eleven months ago, TLC Modular announced the completion of the final module lift and placement “a testament to our team’s hard work and dedication. This achievement reflects our commitment to excellence in modular construction, made possible by the collective effort of our project managers, site team, staff, in collaboration with our partners and suppliers”.

TLC specialises in modular building and prefabricated products sent to Australia, New Zealand and more recently Singapore.

The company says it has a 20-year track record in Southeast Asia’s construction, building and structural steel fabrication industry and aims to expand via “modular, conventional and hybrid building systems backed by its in-house engineering and project services solutions”.

A Kāinga Ora spokeswoman said that entity had no investment in Elevation but manages an underwrite on behalf of the Crown.

“The construction and sale of these homes is managed by the developer, just like any other market home,” she said.

The underwrite can be exercised by the developer if not enough homes are sold, only on underwritten homes that are completed and have received both code compliance certificates and titles.

Alistair Sawer of the modular housing business which is nearing completion at Northcote. Photo / TLC Modular

There is also a contracted period the developer is required to continue to market the homes for sale. The underwrite can only be exercised once that time expires and the home remains unsold.

The underwrite operates on a per-home basis and can be exercised on any underwritten home once the conditions have been met and it remains unsold.

Elevation, the 183-apartment scheme at Northcote on ex-state housing land. Photo / TLC Modular

Kāinga Ora sold the build-ready land to the developer as part of the Northcote LSP, also known as the Northcote Development, she said.

Elevation was a private development with no social housing planned.

“Some of the apartments are subject to a Crown underwrite agreement, contracted under the former KiwiBuild programme. The construction and sale of these homes is managed by the developer, just like any other market home,” the spokeswoman said.

Kāinga Ora would not disclose the dollar value of the underwrite but one sector expert estimated it to be on about 40% of the project, worth more than $60 million.

In 2022, a Kāinga Ora spokesman said: “The Elevation project is a partnership between Kāinga Ora and TLC. It is part of Kāinga Ora’s large-scale project in Northcote that will see the construction of more than 1000 affordable and market homes. Elevation itself will have 182 apartments, of which there will be a 40% affordable homes component.”

In 2022, the Herald reported how dozens of state homes on traditionally large lots were demolished to make way for Elevation near the Northcote shopping centre.

The Vietnamese company was being seen as part of the key to unlocking the potential of the land, importing fully-built up housing units on four ships.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.