It’s a tough time for businesses in the construction industry, but one Waikato builder is making things easier for its subcontractors by giving them a share in its profits.
Davies Homes is proud to announce the launch of their Subbie Spec project, a new way of delivering spec homes that directly benefit the many trade professionals that contribute to the build.
A spec home is usually funded by a building company with the intention of selling it upon completion, with the company reaping the profits.
It’s a concept that’s worked well for Davies Homes, which has built many spec homes in its 25-year history.
However, wanting to strengthen the company’s relationship with its subcontractors, founder and Managing Director Daniel Davies saw an opportunity to do something different.
“We’ve built really close relationships with our subbies – we use the same ones across many of our projects and it ensures that we have consistency in our work. We’ve got their backs and they’ve got ours, and we need to keep strengthening those relationships because it’s so important to what we do.
“So, I floated this idea with them about going in on a project together, where each subcontractor funds a part of it, but also shares in the profit from its sale.”
The idea was warmly received at a Davies Homes supplier meeting at its Design Hub in Te Awamutu a year ago, where it was proposed the first Subbie Spec home would be a family home in the beautiful new Bridleways Estate in Cambridge.
“Everyone was really excited and started coming up with all sorts of ideas and we ran with it from there. We came up with some plans and our partners voted on the best one, including the colour scheme.”
Daniel says one of the challenges of the new arrangement was the background work required to get it set up.
“We’ve established the Subbie Spec as a Joint Venture company, and that has involved a lot of consulting with lawyers and accountants, but now all that legwork is done, which will make it a lot faster for us to get future projects off the ground.”
Subbie Spec partners will receive a profit share equal to the percentage of the build cost they contributed. For example, if the electrician contributes 5% of the cost, they will receive 5% of the profit once it’s sold.
The developer of Bridleway Estates is also contributing to the project by delaying payment on the section until after the home is completed and sold.
“This project really is a win-win for all involved. We’ve had no shortage of partners wanting to be involved because of the huge amount of goodwill being generated,” Daniel says.
“At Davies Homes, we are extremely proud of the team of suppliers and tradespeople we’ve built around us, who continually support us in what we do.
“The Subbie Spec is a great opportunity for us to reciprocate that, because supporting each other is absolutely essential if we are to continue to succeed.”
The first Subbie Spec home is under construction now, and is due to be completed in November.
Visit davieshomes.co.nz/subbie-spec/ for more updates about the Subbie Spec project.
