Aedifice Review – Do They Build Good Investment Properties?

Thinking about buying an Aedifice property? Here is an honest review of who this developer is and whether one of Aedifice’s properties could be the right fit for you.

LM b W

Laine Moger

Journalist and Property Educator for 6 Years
Introduction

If you’re looking at purchasing a New Build investment property, you might have stumbled across Aedifice Property Group – a developer building in Auckland and Wanaka.

So, if you’re researching them, you might be wondering: “Who are these guys?” and “Do their properties make good investment?”

Though before we get into that, you might be wondering – can I trust this article? What’s it based on?

Here at Opes we work with property investors every day. We recommend over 1,000 properties to investors each year and work with 58 different developers. That includes Aedifice – we’ve actually worked with them.

So this article is based on real life experience. Even though we’ve worked with them, this will still be an honest and unbiased review. As you’ll shortly see some Aedifice properties make good investments, some don’t.

In this article you’ll learn who Aedifice is, what sort of properties they build, and which ones might be the right investment for your portfolio.

Who Are They

Who is Aedifice?

Aedifice has been building properties for the past 12 years.

Aedifice focuses on building 2-4 bedroom townhouses and apartments in Auckland. They have some development projects in Wanaka, but if you ask them directly – their focus is Auckland.

Who Are The Directors?

Aedifice has 3 registered directors: Kieran Doe, Francois Beziac and Heremana Malmezac

Kieran is the managing director. His previous experience means he has a wealth of experience to draw on when it comes to executing Aedifice Property Group projects. He is also the founder and managing director of a privately-owned group of property investment and development companies.

Francois is the director. Originally from France, he was regional director for the south of France of a large real estate company overseeing the development of over 1,000 properties per year. After building a successful business contracting and managing real estate operations throughout the south of France, he and his family settled in Queenstown, where he established Aedifice Property, and then to Auckland to bring Aedifice's successful development model to the Auckland market.

Heremana also holds the title of director. After 15 years building his business group in French Polynesia, Heremana made the move to New Zealand where he forged the partnership that would become Aedifice Property.

He has expanded the scope of action for the capital arm of the group, soliciting investment from third parties to fund property development activities.

Heremana is also CEO of the Malmezac Group, a group of companies with extensive business interests in New Zealand and the Pacific Rim across a wide range of asset classes and sectors, including real estate.

What Sort Of Developments Do Aedifice Build?

Aedifice builds terraced townhouses and apartments in Auckland and Wanaka.

Where Does Aedifice Build Its Properties?

Aedifice targets areas with existing infrastructure that have future growth plans in place to support development and planned population growth. Within these opportunistic areas, Aedifice focuses on zones close to transport hubs and motorways. Once the team has identified sites of sufficient scale, land is then negotiated at a price where reward is most likely to outweigh risk.

New Builds

What Are Their Developments Like?

Currently, Aedifice has projects underway or planned in Auckland's North Shore, West Auckland, South Auckland and Wanaka.

For instance, there is a 418-strong development in Hobsonville, an apartment block in Browns Bay, and a 1600 to 2000-sized community in Pukekohe.

To give an example of one of the properties we have recommended, take a look at this photo of a 4-bed townhouse, which is based in Glen Eden, Auckland.

As you can see by the floor plan, the property has three storeys. On the bottom floor is the living and kitchen area.

The top two floors both have 2 bedrooms and a bathroom.

Something interesting about Aedifice is that the exterior of their properties are visually different from properties built by other developers.

Cost

How Much Does An Aedifice Property Cost?

Aedifice builds a range of properties priced from $769,000 all the way up to $2.695 million.

This is one of the reasons we believe some of their properties are good investments, while others aren’t.

That’s not to say the $2.695 million property isn’t a good property or is over-priced. It’s just that a multi-million-dollar apartment is rarely the right fit for a property investor.

However, from our experience, the properties that are good investments are reasonably priced.

For instance, 2-bedroom townhouses in their Selo development – located in Glen Eden – started at $769,000. This is competitive in the Auckland market.

It falls below the average price of what a First Home Buyer spends. For instance, according to CoreLogic, the average first home buyer in Auckland spent $900,500 on their property in Q3 of 2021.

In the same development, 3-bedroom properties started at $859,000, and 4-bedroom townhouses started from $999,000.

But, on the other hand, the company also builds properties that are more expensive – which are more suited for owner-occupiers.

For example, the company is currently building an apartment block in Browns Bay. 2-bedroom apartments start from $929,000. 3-bedroom apartments start from $1.525 million. And their most expensive penthouse apartment will set you back a cool $2.695m.

What’s an affordable house price in Auckland in 2022?

The average spend by an Auckland First Home Buyer was $900,500 on their property in Q3 of 2021. This is a good indicator of what’s affordable for people starting on the housing ladder.

What’s the median house price in Auckland?

The median house price in the Auckland region is $1,290,000 (December 2021), $290,000 more than the next most expensive region - Wellington.

Will house prices drop in 2022?

The Reserve Bank has predicted there is going to be an 8.4% decline in house prices between now and the end of 2023.

House prices have already dropped 2.6% since November, according to REINZ (Nov 21 – Jan 22). That’s only 2 months, but it’s a third of the predicted drop.

Point Of Difference

What Makes Aedifice Different From Other Developers?

Opes managing director Andrew Nicol says he likes Aedifice’s investor-friendly contract.

“After first meeting Aedifice they amended their contracts so that the sunset clauses were much more in favour of the investor and home buyer,” he says.

Today, the sunset clause in Aedifice’s standard contract can only be used by the purchaser, and not the buyer. This means the developer can’t use this clause to cancel the contract and put up the price.

Another point of difference is that Aedifice has a display suite, which is kind of like a show home. This is relatively rare in Auckland.

This means if you’re an investor who wants to have a “look around” to see what the property will look like, you can book a visit to a display suite and have a nosey.

Reputation

Is Aedifice A Good Developer? Can I Trust Them?

Before recommending Aedifice properties to our investors, we’ve gone through a detailed due diligence process.

This is where we scrutinise a developer and categorise them by risk. Aedifice scored “low risk” on all but one of our criterion.

For instance, the company has completed enough previous projects to meet the bar to be considered “lower-risk”. They appear to be highly regarded in the industry and our background checks yielded no red flags.

They also have a sizeable team of support staff and good project supply chain agreements. That means they’re less likely to have build delays due to supply shortages.

The main risk identified with the Glen Eden project that was recommended to Opes investors was the size.

For example, there is a big skill set (and risk) difference between building a row of 6 townhouses and 206.

That can pose challenges to developers who don’t have the experience to tackle it, and unintentionally bite off more than they can chew.

Taking this risk into account we decided to recommend these properties to investors. The reason is that we had the confidence that Aedifice could complete the development given they have built large-scale projects in the city before.

Right Fit

Who Are Aedifice The Right Fit For?

If you are an investor looking to buy a townhouse in the Auckland market, then Aedifice could be a good option for you.

At less than $800K, their starter properties are an affordable option. These can act as a gateway into the Auckland market.

Because these properties are reasonably priced, their yields are often relatively attractive, compared to properties offered by other developers. Their 4-bedroom townhouses in the Selo development had particularly good cashflow.

So, some of Aedifice’s properties certainly can be good investments.

Wrong Fit

Who Are They The Wrong Fit For?

But, their properties aren’t the right fit for everyone. And not all of their properties make good investments, in our view.

Aedifice tends to build townhouses and apartments, primarily in Auckland and Wanaka. So, if you’re looking to invest outside those areas, or if you had your sights set on a standalone property, then they’re not the right fit for you.

Similarly, if your budget is more limited and can’t afford $769,000 or above, then you may need to look in a more affordable city, like Christchurch, or at a more affordable property type.

In addition, renovations-focussed BRRRR investors are not suited to New-Build townhouses because they don’t have the ability to increase their value. So if that’s your strategy, buying a New Build townhouse from Aedifice is likely not the right fit for you.

Conclusion

Should I Buy An Aedifice Property?

All things considered, Aedifice can be a good investment option. And some of the investors we work with have purchased Aedifice properties using our service.

But, just because Opes has recommended Aedifice properties in the past doesn’t mean that every single property they build is a great investment.

For instance, we didn’t recommend their Wanaka properties – since this is not a location we recommend or stand behind. Properties there are very expensive, it has a small population and the economy is tourism-dependent.

It’s a similar situation for some of their apartments where they are more suited to home buyers, as opposed to investors.

This doesn’t mean those homes are bad, it just means that not every property is a good investment.

Whether or not one of Aedifice’s properties is the right investment for you will hinge on the figures standing up, subject to your current situation.

So, the answer to whether or not an Aedifice property is right for you will come down to your personal situation and the deal you are evaluating.

That’s why many investors who purchase New Build investment properties use our service at Opes to evaluate many developers and find the right properties to suit their portfolios.

LM b W

Laine Moger

Laine Moger has been a journalist and reporter for the last 6 years. She previously worked for Stuff, The North Shore Times and Radio NZ. She has a Bachelor of Communications (Honours) from Massey University and a Diploma of Journalism from the London School of Journalism.