Williams Corporation is New Zealand’s second largest home builder. Video / Alex Burton
The Christchurch-headquartered apartment and townhouse developer, which is laying off up to 30% of its 200 staff due to falling sales, is also continuing to advertise for staff to join the company.
“We still have positions
available,” Williams Corporation co-founder Matthew Horncastle said today, referring to jobs in Christchurch and Wellington to lead construction projects.
A project manager is offered up to $120,000 in Christchurch and $150,000 in the capital and a client consultant is offered a base salary of $70,000 but with commissions of up to $750,000 per year .
Yesterday the Messenger reported Williams announcing that it was seeking voluntary staff redundancies, seeking to lay off 10-30% of its 200 staff.
Horncastle said 120 of Williams’ 200 employees are in New Zealand. The company also has offices in Australia and Singapore.
On social media, one follower wrote: “Please tell me the New Zealand Herald got it all wrong!” Horncastle replied, “the story is correct,” attributing the layoffs to sales dropping from 800 homes this year to 500 homes next year.
“So we are currently overstaffed. We will reduce our workforce by 10-30% so that we don’t have staff idle next year. We are currently doing optional redundancy where any member of staff who wants to leave is paid an extra month on top of their redundancy contract,” he said.
The staff will receive two months’ salary as part of the redundancy offer.
“Five per cent of the team have accepted the offer,” Horncastle said today. He is optimistic that sales will pick up “so I think it will be minor and for a short time. It’s just sensible business.
The Williams staff had a pleasant lifestyle: a Herald characteristic This year Horncastle referred to a 28-year-old property developer driving a Rolls Royce Wraith, flying a private jet, owning an 87ft $4million launch and located in downtown Christchurch .
The article read: “They have an Instagram lifestyle synonymous with young, wealthy developers, with annual revenue of $520 million: a new boat, WW (guess why it’s called that?) Brought in from the States States and moored at Viaduct Harbor, and luxury resort stays, most recently at Peter Cooper’s Mountain Landing in the Bay of Islands.
“They charter a white leather-seated Bombardier Challenger 604 jet from GCH Aviation of Christchurch for a fortnightly Christchurch-Wellington-Auckland staff round trip: “We buy roughly 100 hours at a time. I’ve always wanted to fly in a private jet,” Horncastle confessed in this January 15 report.
The letter sent by Williams Corporation to staff was dated November 8 and signed by Horncastle.
“If at any time sales increase to a satisfactory level, this process may be interrupted or abandoned,” he wrote, quoting Robert H. Schuller as saying “tough times never last, but tough people do. “.
The staff had until 3 p.m. on November 14 to accept the voluntary departure offer.
“In 2021, we sold around 800 homes in a rolling 12 month period. Historically, the company has doubled in size every year, and therefore it was assumed, and it was reasonable to believe, that this would happen again and that Williams Corporation would double – delivering about 1600 homes a year and becoming the largest builder in New Zealand (taller than GJ Gardiner),” the letter read.
“In 2022, our sales have dropped to around 400 to 500 homes on a rolling 12 month basis and we have taken all practical steps to increase sales, but we have not seen an increase, and sales are not increasing as As a result, it will likely be proposed that restructuring and/or “proper sizing” of the business is required in order to adjust to market conditions, which may include a reduction in overhead costs of around 15 30% to match our work-in-progress and business forecasts,” the November 8 letter read.
Today other property investors and developers said they weren’t surprised by Williams’ decisions: ‘So it starts,’ said an Auckland investor with more than $100m invested in the property commercial real estate. It provides for much more pain.
Another said: “There will be total carnage. Apparently some salespeople in companies try to sell to family and friends. The market is toast. It’s all over and the music has stopped. No one outside the industry can see it yet. It’s gonna be super ugly.
Last month, Things published an article about the slowdown in townhouse sales in which Horncastle said “we are trading in a calmer market but we are selling more than one house every day”.
Data from StatsNZ shows that in the year to September 50,732 new dwellings were granted, up 7% per annum: in the month of September 1848 single-detached houses were granted, 1688 houses in row, apartments and units and 778 apartments.
Williams owns three wholesale funds: Williams Corporation Capital, Williams Corporation Capital Partners and Williams Corporation First Mortgage Investments.
About $158.8 million is in these funds, contributed by 337 investors, receiving 10% gross per annum, paid quarterly well above the bank rate, Horncastle said last month.
“This entire sum is invested in the development of new homes, which makes us the largest private home builder in New Zealand. These funds are critical to our ability to provide affordable housing for Kiwis,” he said.
He supported a financial market authority Te Mana Tātai Hokohoko investigationwhich published its findings on October 20.
Formal warnings have been issued to seven companies, including Williams, raising millions for property schemes by creating ‘non-compliant’ documents for wholesale property investment deals.
The nearly year-long survey of often high-risk schemes revealed several driving issues in wholesale real estate investing.
He named Black Robin Equity and Westwood Terraces BRE, Du Val Capital Partners and Du Val BTR GP, E+O Property Syndication, Jasper NZ Investments, Provincia Property Fund, Williams Corporation Capital Partnership GP and Wolfbrook Capital.
The investigation came after complaints and concerns about how these wholesale deals were being promoted and whether the right investors were being targeted and accepted.
The authority now wants the intervention of professional organizations of lawyers, accountants and financial advisers.
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