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JULY 2018 NEWSLETTER<br />
www.kinproperty.com.au
BEST PRACTICE FOR SECURING SETTLEMENT<br />
Although the best way to achieve a high settlement percentage would be to engage a specialist entity, like<br />
KIN, there are several other ways for developers to achieve great results. We have reviewed our successes over<br />
the past few years and now share our key learnings that should help your business achieve settlement success:<br />
INVEST TIME IN THE VALUATION PROCESS. Whilst valuations are known<br />
to be a highly variable piece of the development puzzle, they are generally<br />
the most important (in terms of settlement, at least). We recently completed<br />
a project where valuations were undertaken in an area with no (that’s<br />
right, ZERO) comparable sales available to demonstrate the value of the<br />
product. The result? 75% of valuations at or within 10% of the purchase<br />
price. We have heard reports of similarly circumstanced projects faring far,<br />
far worse. The difference? A thorough strategy (we considered project timelines,<br />
level of completeness, stock release and how to best showcase each<br />
product type), intimate knowledge of the project (down to the finest of details)<br />
and an attentive team. This approach, plus a good set of comparables<br />
puts any project in good stead. On the comparables note, it also pays off to<br />
invest time and effort in a good valuation pack, including like sales can be<br />
very beneficial.<br />
GET A DREAM TEAM. Set the bar high and only leave room for improvement.<br />
Implement an operation excellence type approach, bearing in mind<br />
that, often, you get what you pay for. Get the most out of your staff and consultants<br />
by educating them on why they need to go above and beyond and<br />
consider paying a little extra for that top-notch service. Most good quality<br />
consultants will not compromise output by reducing costs. Consider mandating<br />
some service standards, to help weed out the underperformers.<br />
Your dream team is not egotistical and will be motivated by exceeding customers’<br />
expectations. Always remember though, setting the bar high with<br />
purchasers and then failing to deliver can be very damaging to your brand.<br />
DON’T UNDERESTIMATE THE VALUE OF A SETTLEMENT SPECIALIST. Unless<br />
you have a team of full time customer relations devotees, you should<br />
seriously consider appointing a settlement specialist, for a number of reasons:<br />
1) purchasers are serial demanders of time and rightly so, considering<br />
their investment (if they don’t want constant TLC, they want your help<br />
securing finance and planning their move-in), 2) managing expectations<br />
during inspection and defecting processes is a fine art (knowing the Standards<br />
& Tolerances off by heart and being able to recite them with a positive<br />
spin are paramount, unique skills) and 3) even if you do have a dedicated<br />
full time team, chances are, they will still need help during site intensive<br />
project phases (i.e. valuations, pre-settlement inspections and key handover).<br />
Our recent studies indicate that settlement rates increase by about<br />
35% when an external settlement specialist has direct communication with<br />
purchasers (you would be surprised by how far a bit of attention and positive<br />
reinforcement can go). Developers often factor the cost of a settlement<br />
specialist into their sales and marketing budget during feasibility. After all,<br />
as many a wise man once said, ‘a satisfied customer is your best source of<br />
advertisement’.<br />
KEEP THE UPDATES FLOWING. Whether your project is ahead or behind<br />
schedule, you should always keep your purchasers updated. This allows<br />
purchasers the very important opportunity to reassess their situation, with<br />
time to change plans, if necessary. One of the most common misconceptions<br />
in the industry is purchaser preparedness after delayed settlement.<br />
Where there has been no communication about project delays, often, come<br />
KIN PROPERTY
settlement, finance approval will have expired and purchasers will be disengaged,<br />
resulting in settlement delays. Honest communication is a wonderful<br />
weapon. It shows integrity and accountability, resulting in timely<br />
settlements and repeat purchasers.<br />
“Set the bar high and only leave room for improvement.<br />
Implement an operation excellence type approach,<br />
bearing in mind that, often, you get what you pay for.”<br />
BE OPEN TO FEEDBACK AND CHANGE. If you’re looking for zero defects<br />
come purchaser inspections, think about adding an extra one or two rounds<br />
of developer defecting and rely on your settlement specialist’s expertise<br />
when it comes to gauging purchaser sentiment and scheduling. Better yet,<br />
during the tender process, consider specifying additional inspections or<br />
setting a benchmark standard number of defects tolerable to ensure your<br />
product presents A+. This one relates back to the point about getting a<br />
dream team. If you can’t get this one across the line with your construction<br />
team you may wish to consider reassessing. Think about it this way, if dents<br />
and scratches on a new car (worth not even one tenth of a new apartment)<br />
is not OK, how could it possibly be OK for our off-the-plan apartments to<br />
present with defects. The quality of your delivery process will directly relate<br />
to your customer satisfaction levels.<br />
DON’T UNDERESTIMATE THE VALUE OF A GOOD DEVELOPMENT AND<br />
PROJECT MANAGEMENT TEAM. Not only will this help to prevent construction<br />
delays and cost blowouts, but the flow on effect is a well finished, good<br />
quality product, more likely to encourage repeat purchasers. Ensure your<br />
development and project management teams (often the captains of the<br />
dream team) have the resources and time to keep on top of your project. It<br />
is paramount to have someone keeping everyone else accountable.<br />
DEFECTING – ENSURING A QUALITY PRODUCT<br />
KIN Property has long been providing builders defecting services to clients across Australia.<br />
With the highly skilled team at KIN on board your<br />
project, you can rest assured that your product<br />
will be at the standard your clients expect by settlement.<br />
We assists developers, project managers<br />
and builders (tiers 1, 2 and 3) to satisfy their<br />
builders defecting requirements with as little<br />
as 24 hours’ notice. Engaging a service provider<br />
like KIN to assist with builders defecting not<br />
only ensures cost efficiencies, but also allows<br />
for otherwise unrealistic turnaround times to be<br />
achieved without compromising the quality of<br />
output. Our team periodically undergoes training<br />
on industry standards and tolerances. We<br />
work with all major defecting platforms including<br />
Aconex (Field), WebFM (OmTrack) and DefectID.<br />
When using a live, <strong>online</strong> defecting platform,<br />
www.kinproperty.com.au<br />
we are able to streamline the defecting process<br />
by assigning defects directly to our clients’ contractors.<br />
At KIN, it’s all about saving our clients<br />
time and helping our clients achieve product<br />
excellence.<br />
Get in contact if you think we could help your<br />
business to deliver a premium product.
RECENT PROJECTS<br />
UNION TOWER<br />
Melbourne, VIC • Lots: 165<br />
VOLAIRE<br />
West Melbourne, VIC • Lots: 154<br />
SUMMUS<br />
Maribyrnong, VIC • Lots: 183<br />
RYDE GARDEN<br />
North Ryde, NSW • Lots: 784<br />
AUSTRALIA 108<br />
Southbank, VIC • Lots: 1105<br />
CONSERVATORY<br />
Melbourne, VIC • Lots: 473<br />
MARINE PARADE<br />
St Kilda, VIC • Lots: 22<br />
ETERNITY<br />
West Footscray, VIC • Lots: 62<br />
KIN PROPERTY
YORK & GEORGE<br />
Sydney, NSW • Lots: 199<br />
SHADOW PLAY<br />
Southbank, VIC • Lots: 546<br />
SUPPLY CO<br />
Richmond, VIC • Lots: 139<br />
SWANSTON CENTRAL<br />
Carlton, VIC • Lots: 1039<br />
HAWKE & KING<br />
West Melbourne, VIC • Lots: 74<br />
AUTUN<br />
Malvern East, VIC • Lots: 39<br />
WHITE DAWN<br />
Toowong, QLD • Lots: 60<br />
CLASSIC<br />
East Melbourne, VIC • Lots: 64<br />
AVANT<br />
Melbourne, VIC • Lots: 463<br />
PELHAM<br />
Carlton, VIC • Lots: 214<br />
QUARTZ<br />
Highett, VIC • Lots: 33<br />
www.kinproperty.com.au
VALUATIONS AND<br />
NOMINATIONS<br />
Here are the cold, hard facts - 70% of off-the-plan valuations across postcodes<br />
3000, 3003, 3006, 3141 in the last six months returned a result below purchase<br />
price, meaning purchasers are left with a financial gap to bridge.<br />
70%<br />
The Situation<br />
70% of properties valued<br />
under purchase price<br />
Average Valuation Difference<br />
Valuations in the CBD, Southbank,<br />
South Yarra and West Melbourne<br />
have an average gap between<br />
purchase price and current<br />
valuation of 6.7%<br />
6.7%<br />
3 0 0 3 - W E S T M E L B O U R N E<br />
Melbourne CBD Case Study<br />
The below facts are from one Melbourne CBD project we worked on recently<br />
20%<br />
Requested Financial Assistance<br />
20% of purchasers who suffered<br />
from a low valuation requested<br />
help from KIN to find an<br />
alternative financial solution<br />
Requested a Nominee<br />
42% of purchasers were unable to<br />
source finance and requested help<br />
finding a substitute purchaser<br />
42%<br />
95%<br />
Settlement Success<br />
Despite the above, 95% of<br />
apartments settled within four<br />
weeks of the official settlement<br />
date<br />
There are challenging times ahead for the Australian property market but if you<br />
want to safeguard your investment from settlement risk, reach out to one of the<br />
KIN staff members ASAP.<br />
KIN PROPERTY
A NEW HOME, A GROWING FAMILY<br />
The last year has been one of growth for KIN. We moved offices and brought on several new staff members.<br />
Having left our chic premises in South Yarra, we shifted into a charming, homely abode on Drummond Street<br />
in Carlton, a stone’s throw from the CBD.<br />
As well as establishing a new property management function, in line with<br />
performance of previous years, the number of lots settled by us in 2017 was<br />
almost 20% higher than the number of lots settled in 2016. Quite the recipe<br />
for a growth spurt.<br />
Whilst this transition represents a physical change in the business, KIN’s<br />
core values and culture remain the same. All KIN staff continue to deliver<br />
results driven customer service and risk mitigation excellence. We continue<br />
to take an individualistic approach to all projects, creating a custom plan to<br />
help clients achieve their goals, whether it be risk-free timely settlements<br />
or simply meeting deadlines.<br />
In the last six months we have welcomed seven new staff members, six of<br />
whom are Assistant Project Managers. Their aim is to keep delivering the<br />
high level of customer service excellence on which KIN was founded. Each<br />
new staff member undergoes extensive and specialised training to ensure<br />
all projects and clients are handled with supreme care and professionalism.<br />
Over the past year, our property management team has contributed to the<br />
growth of the KIN family. KIN Property Management’s extensive industry<br />
knowledge and unrivalled commitment to customers means achieving the<br />
best results for clients, time and time again. It should, however, be noted<br />
that, whilst our property management team stays true to KIN service<br />
standards and values, it is standalone to the traditional KIN settlements<br />
business. This means that we are able to ensure that respect is always at<br />
the fore when dealing with clients who have other property management<br />
interests. Just another testament to KIN’s commitment to client customised<br />
service offerings.<br />
Another area of focus for KIN has been builder’s defecting. Since all KIN staff<br />
are industry trained to have a keen eye for detail and a thorough understanding<br />
of industry standards and tolerances, it seemed only fitting that<br />
we expand into this space. Recently, our team has been on-site conducting<br />
defect inspections for developers, builders and project managers. We view<br />
builders defecting as a way of ensuring client happiness. For builders and<br />
project managers, it can assist by cost-effectively satisfying contractual<br />
obligations and for developers, it ensures that product delivery standards<br />
are kept high and purchasers are content. In a world where purchasers are<br />
spoilt for choice, this can only be a good thing.<br />
We hope the theme of growth continues into the next financial year. However,<br />
our main aim, as always, is maintaining the highest levels of client<br />
satisfaction. We will continue to strive for excellence and ensure that our<br />
offering remains the premium, marketing-leading service you are used to.<br />
www.kinproperty.com.au
KIN STAFF MEMBERS<br />
Kerren McNamara<br />
Managing Director<br />
Anne Paciocco<br />
General Manager<br />
Shannon Barker<br />
Manager & OIEC Property Management<br />
Donna Fleming<br />
Accounting & Administration Manager<br />
Jake Barker<br />
Marketing Coordinator<br />
Karin Jacobsen<br />
Project Manager<br />
Jenny Roche<br />
Project Manager<br />
Pippa Wright<br />
Project Manager<br />
Natalie Hanrahan<br />
Project Manager<br />
Lisa Dixson<br />
Project Manager<br />
Sally Clarke<br />
Project Manager<br />
Eeshan Ng<br />
Project Manager<br />
Amanda Grist<br />
Project Manager<br />
Kelly Coutts<br />
Assistant Project Manager<br />
Netta Regnani<br />
Assistant Project Manager<br />
Ellen Vacouftsis<br />
Assistant Project Manager<br />
Samantha Warrick<br />
Senior Property Manager<br />
Maria Shi<br />
Assistant Project Manager<br />
Amy MacMillen<br />
Assistant Project Manager<br />
Charlene Guan<br />
Assistant Project Manager<br />
Carla Ford<br />
Assistant Project Manager<br />
Anne Paciocco | +61 (0) 412 202 253 | anne@kinproperty.com.au | kinproperty.com.au<br />
KIN PROPERTY