The first thing you need to know about Dundee Developments and Homes by Dundee is that they did not become the largest residential land developer and single-family homebuilder in Saskatchewan over night.
Dundee Developments and Homes by Dundee are wholly owned operations under the banner of Dundee Realty Corporation. The core business within Dundee Developments is taking farmland and converting it into some of Saskatchewan’s and Alberta’s finest residential neighbourhoods. Homes by Dundee, on the other hand, concentrates on building single-family homes exclusively in Saskatchewan on Dundee lands.
Speaking with Joel Teal, President of Dundee Developments and Homes by Dundee, reveals a calculated and thoughtful corporate strategy, which has guided the company from its days of having a few hundred acres to now controlling 6,000 wholly owned acres of land.
“Dundee Developments has grown into a big operation from a small company in the early 1990s in Saskatoon. At that time, we sold an existing company Preston Developments to Dundee Realty Corporation for an important reason; they were able to provide the financial strength the company needed to expand.”
The story of Dundee Developments and Homes by Dundee
The economic environment that we have experienced in Saskatchewan since the early 1990s has gone through three periods, according to Teal. He describes the early to mid 1990s as “slow”. The company was in “survival mode” and under the guidance of a “conservative group of managers who followed opportunities with a prudent approach.”
This prudent approach led the company to controlled growth. In the late 1990s following the sale to Dundee Realty Corporation, several aggressive acquisitions, were made including Carma Developments/Cairns Homes in Regina, Markborough Properties in Calgary and Lehendorff Properties in Edmonton. These acquisitions provided exposure to the robust economy of Alberta while in Saskatchewan the market was stable but less expansive through 2005. “From 2006 to the present, Saskatchewan has experienced strong market conditions providing exceptional results,” continues Teal. This period stands out because the best times we have had in Saskatchewan have occurred when other parts of North America have faced challenges. We have taken advantage of that fact.”
Take advantage, indeed. The last decade has seen Dundee Developments grow to over $200 million in sales revenue. Residential lot sales have ranged from 700 to 1,000 lots per year with approximately 1,800 lots being in the process of being sold in 2010—a new record. “We have made land acquisitions with high quality being the governing criteria,” says Teal. “We have made these acquisitions using equity, not debt; we have made sure we are not burdened with high levels of debt in case the markets turn on us or interest rate levels rise. We have a very conservative balance sheet.” At the same time that the company has assembled a major land bank, Homes by Dundee has built on average 250 single-family homes per year in Saskatchewan.
Master planned communities
The number one criteria we look for when purchasing land,” says Teal, “is that it be in the path of development. When we buy land, we are confident that sooner or later, the purchased lands will be in the path of growth within our communities.”
The company will go through the process of acquiring attractive land holdings and then, planning communities on these lands using professional external planners.
Once the proposed community has been planned, the company then takes the proposal through various approval agencies. Once that is accomplished, Dundee Developments works with subcontractors to complete the physical development of the lands, including the underground water, sewer, utilities, sidewalk and surface road components and amenities such as parks, lakes, walking paths etc.
“In Saskatoon and Regina, we also are a builder of one type of housing product—single-family housing,” explains Teal. “We build on between 30 to 40 per cent of the single family land we produce.”
The other single-family housing lots are sold to external builders and the other categories of land, which include commercial sites, multi family sites for apartments and townhouses and school sites, are also sold to outside builder customers.
Currently, Dundee Developments has three major land projects in Saskatoon, two in Regina, three underway in Calgary and three in Edmonton. The company also has other raw lands that are slated for neighbourhood projects. In total, the company has 11 land projects underway and five major raw land holdings in the planning stages. All told the lands held by the company total approximately 6,000 acres.
“As the creators of new residential neighbourhoods, we, at Dundee, understand and take seriously the role we can play in contributing to the attractiveness and quality of life within our cities. We employ best practices in planning to provide an architecturally controlled mix of housing types, recreational amenities and local commercial services. In our larger developments we incorporate employment centers such as business parks.
“Several leading planning concepts focus upon sustainability. Reduced reliance on automobiles; enhanced opportunities for solar energy and improved efficiency in water management are some examples,” says Teal.
So to what does Teal credit the company’s success? “A great deal of attention is paid to external relationships,” he says, “whether that be with consulting firms, contractors, builder customers, or the approval authorities. What we recognize is the key to our success over and above our land base is our relationships with that long list of business partners. So we have a management team with a long history in their local markets and long standing relationships with a host of key participants in our industry. Our people and relationships are truly our biggest assets.
“Our decision to be part of Dundee Realty Corporation in 1996 was also pivotal. At that time, Michael Cooper and Ned Goodman of Dundee understood and had confidence in the potential of Saskatchewan. Without that successful ongoing relationship with our parent company, the growth we have experienced would not have been possible. We continue to believe that the future is bright for our part of the company in both Saskatchewan and Alberta”.