Grant Porteous of Deacon Holdings - G.J. Gardner’s master franchisor - said the national business would expand from31 franchisees to about 40 within the next six months to a year.
“Most of the negotiations, due diligence and the details are completed with many new areas set to open. We are growing the market network at a time when others are losing franchisees,” he said from the company’s Rosedale headquarters on Auckland’s North Shore.
“We’re applying that to the market. There’s strong demand for new G.J. Gardner offices to open, particularly out of Auckland, in more regional areas,” he said.
Porteous openly volunteered that the downturn reduced the business.
“Our income has gone down by probably a third lately,” he said of Deacon whose revenue is based on 2% of the contract value of residences built by franchisees.
To quantify how challenging the market has been for G.J. Gardner, Porteous said in the years to March 31, numbers were:
2020-2021: 1493 new residences built by G.J. Gardner franchisees nationally
2021-2022: 1702 residences
2022-2023: 1302 residences
2023-2024: 1027 residences
That is data from BCI’s What’s On Report which gives the number, value and size of new residences built.
Although G.J. Gardner remained New Zealand’s largest builder based on the number as well as the value of homes completed annually, the market had shrunk markedly, Porteous acknowledged.
He expects only about 850 to 900 residences will be completed by franchisees in the year to March 31, 2025.
Grant Porteous with wife Ellie from house-building company G.J. Gardner.
StatsNZ said on August 30 that the number of new homes consented for building fell 22% in the year to July. There were 33,921 new homes consented over that period, down from 43,487 in the 12 months to July 2023. Levels haven’t been this low since February 2019 when 34,262 new homes were consented on an annual basis.
Porteous said Christchurch and Waikato were a big focus for growth because despite the downturn, demand was staying high in those areas and other smaller provincial regions.
G.J. Gardner plans to establish two new Christchurch franchisees, doubling outlets from St Albans in the north and Hornby in the south currently.
That city presented big opportunities and negotiations were under way to open offices, particularly with a focus on demand to build on land where buildings were demolished post-earthquakes, he said.
“Christchurch has been our biggest underperforming area. We have done good there but we’ve never done as well as we could,” Porteous said.
G.J. Gardner planned to increase its Hamilton presence from one franchisee to three due to demand.
Already, the business has had eight inquiries from parties keen on buying the one franchise it has currently, Porteous said.
A new franchise is planned at Matamata, one is in the final steps for the Upper/Lower Hutt area and one for the Timaru/Ōamaru area.
Franchises in Rotorua, Tauranga south, Palmerston North and Whanganui have new owners.
“All are grown from staff in the G.J. network, which is important to us,” Porteous said of himself and wife Ellie, who is managing director.
The sale of the Tauranga south franchise had just been concluded to a couple.
“That is exciting for many reasons, including the belief major banks showed in tough times to support the purchase with such a large investment required,” Porteous said.
National expansion was planned for good reasons.
“The business is very strong in many rural regions, including Taranaki, Palmerston North, Wairarapa, Wānaka and Queenstown,” Porteous said.
“It’s exciting to have so many accomplished skilled businesspeople wanting to be part of the G.J. team in these times.”
The house-building business now offers virtual reality and augmented reality for customers, so they can see what a new residence will look like before it is built.
“We’ve got a long list of business improvements and enhancements we’ve been able to design for our customers,” he said.
IT efficiencies, increased security, electronic price updates for all key merchant suppliers and electronic invoicing were some of the biggest changes lately, he said.
Du Val founders Kenyon and Charlotte Clarke - the business is in statutory management with PwC estimating $250m liabilities.
And while G.J. Gardner is expanding, other building businesses like Du Val have suffered, now in statutory management.
That business founded by Kenyon and Charlotte Clarke is in statutory management with PwC estimating $250m liabilities but that is yet to appear in any official data yet.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
