Accidental developer says it’s not all about the money
Meteorology, math, bumming around . . . and $440m in work in 12 months. Mark Todd from Ockham talks to
"For some reason, I just stepped off that path. I’d been doing well at school, doing well at university, got a good job and for some reason or other, I decided to stop taking those steps."
Mark Todd, Ockham co-founder
Mark Todd — co-founder of high-profile apartment builder Ockham Residential — was almost a weatherman. He left university with degrees in maths and philosophy and was offered a rare position as a cadet meteorologist.
But something didn’t feel right and he opted out.
It’s just one of many stories Todd tells that reveal a lack of passion for money which might seem surprising for a successful property developer.
“I was going to be a meteorologist and I went to the South Island for the summer, I came back and I never turned up to my meteorology cadetship. Looking back, it was a key sort of sliding doors moment in my life.”
“At the time it was kind of all intuitive,” he says, speaking on the Money Talks podcast.
“For some reason, I just stepped off that path. I’d been doing well at school, doing well at university, got a good job and for some reason or other, I decided to stop taking those steps.”
That led to several years of labouring, painting houses and a lot of surfing. Or as his official bio on Ockham’s web page puts it, Todd “bummed around for a bit, thinking and labouring”.
In hindsight, it was an inspired decision.
Ironically it put Todd — who describes himself as a lover of abstract ideas — on a path to success in a very sold business: construction and property development.
“I’m as astonished as anyone that Ockham grew to be as large as it is. We had close to a hundred staff 18 months ago, and in the last 12 months, we finished $440 million of apartments — all privately funded.”
Todd founded Ockham with friend Ben Preston — a fellow maths student who had forged a successful career in finance. With help from his brother, Todd had kept painting and renovating and eventually started subdividing properties and buildings. When the Global Financial Crisis (GFC) hit, he and Preston reconnected and started Ockham.
A native-born Aucklander, Todd is very proud of the city. He grew up on an urban farm in Panmure that his grandfather started in the 1940s.
It’s that passion for the city that keeps him focused on his goal of building quality urban living spaces.
“I was increasingly frustrated,” he says of the building he saw going on in the last 1990s and early 2000s.
“I could see the poor quality, high density, that’s what happened around Auckland from the mid-90s through to the GFC.”
He describes it as a period of “urban ugliness”.
“Those big, large-scale projects of poor visual quality, they actually are a form of economic vandalism in that they preclude future high-value development of a neighbourhood.”
Todd has a reputation for being outspoken about the quality of urban design, something that hasn’t always made him popular in the sector. “I ruffled a few feathers,” he says. “I’m reasonably lucky that we are
. . . a private company, we’re independent and we don’t report to a board or shareholders. I think that’s probably a strength of ours, being able to say what we want to say in public . . . But mostly I do it, not as a property developer to change the rules to make our business function better, I do it with my citizen’s hat on. I’m lucky, I know a fair bit about building houses and urban regeneration, and it could be better.”
Todd says he’s never chased money for its own sake.
“Developers have got to have an aspirational vision for the outcome,” he says.
“It’s all about the intention and aspiration. So I think too often with large projects, it’s all about maximizing the number in the bottom right-hand corner of the spreadsheet and a thousand decisions are made over three or four years to protect that number.”
The aggregate of all those small decisions is often poor quality outcomes for buildings that will be around for a hundred years, he says.
“That’s actually a moral and ethical failing.”
“Sure. You’ve got to be profitable. Don’t get me wrong, we are hardnosed. We don’t do anything for free.”
But being profitable is only a necessary condition, not a sufficient condition, to undertake a project, he says with a bit of mathematician’s logic.
Todd says he still has a lot of love for maths and philosophy. Not necessarily to solve problems, but for their own sake.
“I just love abstract,” he says. “Maths is a terribly misunderstood subject, it’s not actually about numbers.”
Numbers are just one narrow part of mathematics, he says.
“They are useful for making aeroplanes fly and making buildings stand up, doing accounting . . . But really mathematics is a way to understand essence and quality and the relationships among things. Numbers fall out as a special case.”
Todd says that part of the thinking behind starting Ockham was applying his passion for maths and philosophy to the building sector.
“You scratch the surface and any subject is fascinating. The older I get, I try to retain a sense of wonder.”
He worries that the modern world with access to unlimited information has led us to a place where everyone is sort of an expert in everything.
“But it’s kind of the opposite has happened and no one actually takes the time to study deeply. There’s always something to learn. I just try and keep a sense of wonder about any aspect of human activity.”
It has been a difficult time for the property sector as interest rates have risen and buyer demand has fallen. While it is still building apartments, Ockham has scaled back dramatically until market conditions turn the corner.
“It’s still incredibly tough on the sales side of the business,” Todd says. “In the last 12 months, we finished nearly 500 apartments across five projects. It’s been a huge effort, the last three years, through the pandemic and recessionary environment and the shortages of everything.
Sales have been “anaemic”, he says.
“No one wants to buy off the plans when the general view is house prices are falling and they have been falling for the last few years. It feels like the bottom of the trough now and they’re not going to fall any further, but it’s still really tough out there.”
Ockham grew fast for many years and now the company is taking a cautious approach through the downturn.
Late last year, it made the tough call to put the Feynman 165-unit apartment complex, planned for Grey Lynn, on hold. It handed back dozens of deposits to customers after slow pre-sales made it risky to proceed.
It is still working on apartment projects in Pt Chevalier and Waterview and also just completed the high-profile Greenhouse building in Ponsonby.
“I’ve never done anything for growth,” Todd says. “We did the right thing, we attracted opportunity and we were trusted with equity. It’s a huge responsibility stewarding capital.”
More so than debt, Todd says, being responsible for investor money is what keeps him awake at night.
At one point 12 months ago, Ockham had close to a hundred million dollars of private equity under management. “There’s a lot of responsibility for those investors that have trusted us, that’s . . . the pressure that I feel.”
Todd says he isn’t personally a big spender but, while money hasn’t been a major driver in his career, he does admit to the occasional indulgence.
“I find it quite motivating to spend a little bit of money on things that are unnecessary,” he says. “Probably the biggest one was 11 years ago when we finished the Isaac [apartment complex in Grey Lynn], which was a big project at the time. When that was finished, I ordered a restored old Daimler car. It was very expensive and it turned into a standing joke though, because it took eight years to finish. Everyone that knew me would ask me how my car was.”
He gets that he is wealthy now but he worries about social inequality and what it is doing to society.
“I am in the 1 per cent, you know, 0. 1 per cent probably in this country and I’m very grateful for that,” he says. “But I don’t think it’s special skills of mine. It’s luck.”
“It’s who you were born to, your parents. Just look at the mathematics. Yes, there are exceptions to the rule but the metrics don’t lie.”
“If you’re born poor, you are poor. If you’re born Ma¯ori or Pasifika, you’re not going to have a net worth anything or a life expectancy, anything like someone born middleclass European. So it’s luck that drives wealth.”
Asked what his priority would be if he was Prime Minister for a day, he highlights the need to lift wages. But a lot of that relates to housing, he says.
“Incomes have decoupled from house values. Literally, people can no longer afford a house. No one’s better off with the relative value of houses to incomes”.
It’s not just housing, he says.
“The price-to-earnings ratios you pay for shares in the sharemarket has gone up an incredible amount in the last 20 years. What you pay for utilities or a roading company or an airline or a port, everything’s overvalued. I think that’s a structural macroeconomic finance problem.”
The era of easy borrowing and super low interest rates or “free money” made a lot of money for the people in the 1 per cent, he says.
“But it’s had some pernicious, macro effects. We’re nearly the worst for unaffordability here in New Zealand, particularly Auckland, but we’re not that far ahead of . . . many other Western cities.”
These are complex issues, not easily solved, he admits.
“Let’s not pretend the solutions are trite. They are not trite. They are deep. But to even open that space up, you’ve got to start with the truth. It is really about: how did you perform in the lottery of birth?”