Archive | Sectors

4 Merchant Quarter retail units sell

4 of the 5 Merchant Quarter retail units auctioned at Colliers yesterday were sold under the hammer, 2 of them at sub-5% yields.

They’re among 12 retail, food & health sector units on the ground floor of the expanded building, which has new & established apartments at the top, and parking in the middle. 2 of the ground-floor units are vacant.

Agents on all 5 units were Tony Allsop, Josh Coburn & Cheryl Higginson.

North-west

New Lynn

28-42 Totara Avenue:
Pita Pit:
Features: 108m²
Rent: $42,301.44/year net passing income, 10-year initial term, 2 5-year rights of renewal
Outcome: sold for $900,000 at a 4.7% yield

Lumino:
Features: 160m²
Rent: $52,000/year net passing income, 10-year initial term, 2 4-year rights of renewal
Outcome: sold for $1.175 million at a 4.42% yield

Spicy Hot Pot:
Features: 114.15m²
Rent: $33,060/year net passing income, 8-year initial term, 2 6-year rights of renewal
Outcome: sold for $618,000 at a 5.34% yield

Vita Source:
Features: 87.29m²
Rent: $34,333/year net passing income, 6-year initial term, 2 3-year rights of renewal
Outcome: sold for $500,000 at a 6.87% yield

Vacant space:
Features: 102m²
Outgoings: body corporate costs $6045/year – about $55/m²/year + gst
Outcome: passed in

Attribution: Agency release.

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4 apartments sell at Ray White auction

4 of the 6 apartments & townhouses auctioned at Ray White City Apartments yesterday were sold under the hammer.

CBD

Learning Quarter

Connaught, 14 Waterloo Quadrant, units 5A & 5L:
Features: 130m², 2 bedrooms, 2 bathrooms, balcony, 2 storage lockers, secure parking space
Outgoings: rates $2539/year including gst; body corp levy 5A $5245/year, 5L $5032/year (currently includes 2 parking spaces)
Income assessment: $850-895/week furnished, $2100/week furnished & serviced
Outcome: sold for $1.25 million
Agents: Adele Keane & Dusan Valenta

Uptown

Verandahs, 36 Boardman Lane:
Features: 55m², 2 bedrooms, deck, parking space
Outgoings: rates $1214/year including gst; body corp levy $4790/year
Outcome: sold for $425,000
Agents: Adele Keane & Dusan Valenta

Victoria Quarter

Ascent, 149 Nelson St, unit 515:
Features: 39m², one bedroom, parking space; code compliance certificate awaited following remediation, stage 2 remedial works due to start
Outgoings: rates $1007/year including gst; body corp levy $3064/year
Income assessment: $410/week, fixed until April
Outcome: sold for $255,000
Agents: Damian Piggin & Daniel Horrobin

Isthmus east

Parnell

Quest Parnell, 6-8 Heather St, unit 310:
Features: 30m² studio, leased to Quest Hotel until 2023
Outgoings: rates $4461/year including gst; body corp levy $2552/year
Income assessment: $17,640/year including gst, review due April 2018
Outcome: passed in, back on market at $235,000 + gst
Agent: Susanne Bussell

Isthmus west

Eden Terrace

70 Randolph St, unit 3:
Features: 80m², renovated 2-bedroom townhouse, internal-access parking space
Outgoings: rates $1542/year including gst; body corp levy $2403/year
Income assessment: $650-700/week furnished
Outcome: sold for $642,000
Agents: Mitch Agnew & Krister Samuel

Mt Eden

42 Harold St:
Features: 120m², 2 bedrooms, study, double garage
Outgoings: rates $1804/year including gst; body corp levy $3277/year
Income assessment: $700-750/week furnished
Outcome: no bid
Agent: Krister Samuel

Attribution: Auction.

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Quay West & Metropolis apartments & Onehunga warehouse sell

The cranes for the 39-storey Commercial Bay office tower across the road are encroaching on Quay West harbour views, but the apartment block at the foot of Albert St still carries prestige.

A 12th-floor unit which will retain its north-westerly views across the Wynyard Quarter sold for about $9000/m² (net of an allowance for parking) at Barfoot & Thompson’s city auction today.

A smaller Metropolis apartment also sold, and a small Onehunga warehouse sold for $3661/m² (consented space).

Apartments

CBD

Albert St

Quay West, 8 Albert St, unit 1204:
Features: 132m² north-west corner, air-conditioned, 2 bedrooms, 2 bathrooms including ensuite with a bath, wraparound balcony, secure parking space
Outgoings: body corp levy $12,747/year
Income assessment: $830/week, fixed until January
Outcome: sold for $1.285 million
Agent: Belinda Illingworth

Kitchener St

Metropolis, 1 Courthouse Lane, unit 2615:
Features: one bedroom
Outgoings: body corp levy $4909/year
Outcome: sold for $401,000
Agent: Estee Zeng

Commercial

Isthmus east

Onehunga

10C Hill St:
Features: 183m² roadfront warehouse unit – 168m² warehouse, 15m² ground-floor office plus unconsented 20m² mezzanine, 3.5m stud height, 3-phase power & container access, 2 parking spaces         
Outcome: sold vacant for $670,000
Agents: Nick Wilson & James Marshall

Attribution: Auction.

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3 apartments sell at auction

3 apartments were sold at Bayleys’ city auction today and 2 townhouses were passed in. The units included 2 with remediation issues – one sold.

CBD

Learning Quarter

Connaught, 14 Waterloo Quadrant, unit 8C (building pictured):
Features: one bedroom, deck, storage locker, secure parking space
Outgoings: rates $1825/year including gst; body corp levy $5032/year
Outcome: sold for $600,000
Agents: Diane Jackson & Julie Prince

Victoria Quarter

First Imperial, 125A Hobson St, unit 10B:
Features: 96m², 2 bedrooms, balcony, parking space
Outgoings: body corp levy $6709/year
Income assessment: $680-700/week
Outcome: sold for $592,000
Agent: Sam Yeung

Isthmus east

Grafton

Luna, 16 Burton St, unit 5K:
Features: 2 bedrooms, 2 bathrooms, custom storage shelving, deck, secure parking space; remediation underway, apartment sold on “as is” basis with no further levy liability for the vendor
Outgoings: body corp levy $4725/year
Outcome: sold for $368,500
Agents: Dave Hamlyn & Wendy Nichols

Isthmus west

Grey Lynn

35 Turakina St, unit 6:
Features: one-bedroom unit, parking space
Outgoings: rates $1359/year including gst; body corp levy $2356/year
Outcome: passed in at $450,000
Agent: Blair Haddow

Mt Eden

Mountview Village, 86 Harold St, unit BU
Features: 2-level one-bedroom townhouse, study, parking space; the body corporate settled a remediation claim in 2012, the building has been reclad and code compliance certificate issued, but the contractor & owners are now in dispute on costs
Outgoings: rates $1467/year including gst; body corp levy $2409/year
Outcome: passed in at $530,000
Agents: Dave Hamlyn & Wendy Nichols

Attribution: Auction.

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2 Millwater commercial units sell, one at under 5%

Both properties in the 2-year-old Millwater Central development at Silverdale auctioned at Colliers today were sold under the hammer, one on a yield of just under 5%.

The 2 units are in the same development but have different street addresses.

North-east

Silverdale

Millwater Central, 79 Bankside Rd, unit 11:
Features: 104m², 2 shops leased to The Barbershop Co & Mike Pero Real Estate, both for 6 years plus 2 further terms of 3 years
Rent: $43,842/year net + gst       
Outcome: sold for $881,000 at a 4.97% yield
Agents: Euan Stratton, Matt Prentice & Shoneet Chand

Millwater Central, 175 Millwater Parkway, unit 13:
Features: 321m², leased to Jetts Fitness for 8 years from February 2015, one 7-year right of renewal
Rent: $88,224/year net + gst
Outcome: sold for $1.501 million at a 5.87% yield
Agents: Euan Stratton, Matt Prentice & Shoneet Chand

Attribution: Auction.

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ANZ sells pensions & investments businesses to IOOF

ANZ Banking Group Ltd said yesterday it had agreed to sell pensions & investments & aligned dealer group businesses to IOOF Holdings Ltd, and continued to review options for its life insurance business.

The latest in a succession of sales to get the bank back to mainstream business is the sale of its OnePath pensions & investments & aligned dealer groups business for $A975 million. As part of the agreement, ANZ will also enter into a 20–year strategic alliance to make available IOOF superannuation & investment products to ANZ customers.

The OnePath pensions & investments business has $A48 billion of funds under management, and the aligned dealer groups business has 7172 aligned advisors & $A19.5 billion of funds managed.

OnePath life insurance has $A1.6 billion of premiums in force, OnePath general insurance $A226 million.

ANZ said the transaction price represented a multiple of 25 times the 2017 financial year net profit after tax, equating to 17 times after separation & transaction costs. Aggregate profit for the year was $A39 million.

The bank estimated its accounting loss on sale of about $A120 million, including sale proceeds of $A975 million, separation & transaction costs of about $A300 million post-tax, and an accounting adjustment of about $A500 million for Treasury shares.

ANZ expected the transaction to increase its tier 1 capital ratio (as set out by the Australian Prudential Regulation Authority) by about 15 basis points on completion.

The bank expects the transaction to take about 12 months to complete.

The context

ANZ group executive for Wealth Australia, Alexis George, put the sale in this context: “The sale of the pensions & investments & aligned dealer groups businesses is consistent with ANZ’s strategy to create a simpler, better balanced bank focused on retail & business banking in Australia & New Zealand, and institutional banking supporting client trade & capital flows across the region. “Financial services such as superannuation, investments & advice are a core part of the support we provide ANZ customers now & in the future.

“By partnering with IOOF, we are able to create greater value for our shareholders while also providing our customers with access to quality wealth products from a specialist provider with the right cultural fit, financial strength & digital capability.

“The sale provides ANZ with greater flexibility to consider options for the life insurance business, including strategic & capital markets solutions.”

Attribution: Company release.

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Commission sets out preliminary issues on Daiken takeover of Dongwha MDF business

The Commerce Commission published a statement of preliminary issues yesterday relating to Daiken NZ Ltd’s proposed acquisition of Dongwha NZ Ltd.

It’s a standard but comprehensive list of competition checks & balances (see the link below).

Daiken lodged its application on 3 October. The commission has invited submissions by Thursday 2 November and is scheduled to make a decision on the application by 30 November. However, the decision date could be extended.

Daiken is the New Zealand subsidiary of Daiken Corp, a Japanese company specialising in the manufacture & supply of wood-based construction materials. In New Zealand, Daiken manufactures & supplies medium density fibreboard (MDF) from a plant it operates in North Canterbury.

Laminex gets supply agreement

Under a product supply agreement with Daiken, Laminex would continue to be supplied with raw MDF from the Southland plant.

Daiken said the agreement would enable Laminex to continue to compete with it and with New Zealand’s third raw MDF manufacturer, Nelson Pine Industries Ltd, in the supply of raw MDF to customers in New Zealand.

Daiken submitted that Dongwha NZ was a “fringe competitor” in the supply of raw MDF within New Zealand because it had long been primarily export focused and, setting aside its sales to Laminex, accounted for a very small proportion of sales in New Zealand.

Daiken also submitted that the proposed merger would not give rise to a material lessening of competition in the manufacture & supply of raw MDF in New Zealand because:

  • Nelson Pine is the largest competitor in the New Zealand market at present, and would continue to exert significant competitive constraint on the merged entity, including by being able to divert significant volumes destined for export to New Zealand customers if market opportunities were to arise;
  • raw MDF is sold in a global commodity market, meaning that prices to New Zealand customers are pinned to conditions in that global market, rather than by standalone competitive dynamics in the New Zealand market;
  • overseas manufacturers of raw MDF in Australia, Asia & South America could import & supply raw MDF in New Zealand if New Zealand manufacturers were to price raw MDF above global market levels;
  • substitutability of MDF for particle board placed additional competitive constraint on the supply raw MDF in New Zealand;
  • new entrants could be incentivised to enter;
  • customers are highly price conscious, push back in negotiations on price increases, and are willing to switch suppliers if they can obtain a cheaper price; and
  • the merger would not materially change the existing degree of competition in New Zealand because the product supply agreement Daiken & Laminex would enter into ancillary to the merger would ensure that Laminex has sufficient volumes to continue to compete, as market opportunities arise, with the merged entity & Nelson Pine in the sale of raw MDF in New Zealand.

The parties

Dongwha is 80% owned by Dongwha International Co Ltd (incorporated in Hong Kong, controlled by Dongwha Group of South Korea) and 20% owned by Fletcher Building Ltd subsidiary Laminex Group (NZ) Ltd. In New Zealand, Dongwha manufactures & supplies MDF from a plant it operates in Southland.

Its minority shareholder, Laminex, buys MDF from Dongwha for its own wood products business in New Zealand. Laminex also on-sells some of the MDF it purchases from Dongwha to other parties.

Dongwha bought the New Zealand business from US timber company Rayonier Wood Products LLC in 2005, and Laminex bought 20% from Dongwha in November 2007.

Link:
Commerce Commission, clearances register, Daiken-Dongwha

Attribution: Commission release & website.

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Housing rises & transport falls maintain modest inflation increase

CPI – the consumers price index – rose 0.5% from the June quarter to September, and rose 1.9% for the year, pushed up by housing-related rises and held down by transport-related falls.

There was nothing unusual about the rise from one quarter to the next. Statistics NZ’s graph shows only one quarterly rise reaching 1% since June 2011, and 5 quarterly falls along the way. The March 2017 quarter was notable for a rise from the same quarter a year earlier exceeding 2% (it was 2.2%), falling back to 1.7% and then 1.9% in the 2 most recent quarters.

The index was last in bigger-than-2% territory in September 2011, with a 4.6% annual rise as New Zealand began to emerge from the depth of the global financial crisis. Since then, housing prices have skyrocketed, without great effect on the CPI.

In the latest quarter, however, Statistics NZ said:

  • Rents rose 0.6% from June & 2.2% over a year
  • The cost of construction of new homes, excluding land, rose 1.1% from June, 5.4% for the year
  • Council rates rose 3.5% from June, 3.7% for the year, and
  • Home insurance rose 6.1% from June, 12% for the year.

Regional shifts in rent & construction

Auckland had the lowest annual increases in rent & construction costs since March 2015.

In Canterbury, rents fell 1.9% for the year, the fifth consecutive annual decrease in rents for the region. The 2.6% increase for the year for construction of new homes (excluding land) was the lowest annual increase since September 2010, before the Canterbury earthquakes.

In Wellington, construction costs rose 1.4% from June, 3.2% for the year, and rents rose 1.0% from June, 3.7% for the year. That was the largest annual increase in Wellington rents since December 2008.

Among other price shifts:

  • Petrol fell 1.7% from June but rose 4.5% for the year
  • International airfares fell 5.5% for the quarter, 2.7% for the year
  • Vehicle relicensing fees fell 8% for the quarter & year
  • Prices for second-hand cars fell 0.9% from June but rose 1.8% for the year

Updated CPI for the December quarter

Statistics NZ said it would release the December quarter CPI a week later than usual because it’s implementing a review of the index. It carries out these reviews every 3 years to ensure the index remains relevant. The next quarterly index will be published on 25 January 2018, and a paper on the review will be released on 12 January.

Attribution: Statistics NZ release & tables.

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3 sales, a syndication & a lease

Colliers agents have completed 2 sales & a lease in West Auckland, another at Rosedale, and have completed the syndication of 4 distribution centres through Silverfin Capital Ltd.

Syndication sale

Features: 4 Provida Foods Ltd national distribution centres
Outcome: sold to investors in 233 parcels in a Silverfin Capital Ltd proportionate ownership scheme for a total $11.65 million
Agents: Charlie Oscroft & Kris Ongley

North-east

Rosedale

35 William Pickering Drive, unit 4:
Features: 946m², retail showroom/warehouse
Rent: $170,000/year net + gst from tenancy running until 1 March 2018       
Outcome: sold for $2.765 million at a 6.14% yield
Agents: Jimmy O’Brien (Colliers) & Marty van Barneveld (NAI Harcourts)

North-west

Hobsonville

Hobsonville Workspace, 102 Hobsonville Rd, lots 3 & 4:
Features: 600m² off-the-plan office site developed by The Neil Group Ltd; building to be developed by Kea Properties Ltd, it will include a childcare, retail, cafes & office, completion expected end of 2018
Outcome: sold to Kea for $2.848 million + gst
Agents: Sean Finnegan & Craig Smith

Westgate

101-103 Fred Taylor Drive:
Features: 3.55ha vacant industrial development site     
Outcome: sold for $10.5 million + gst
Agents: Sean Finnegan (Craig Smith (Colliers) & David Mayhew (JLL)

Lease

North-west

Westgate

9 Northside Drive, lot 3:
Features: 720m² childcare centre leased to Eduplay Childcare Ltd
Rent: $390,000/year net + gst + opex
Outcome:
Agents: Sean Finnegan & Craig Smith

Attribution: Agency release.

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Judge overturns year-old highrise consent next to heritage substation because of non-notification

High Court judge Rebecca Ellis has set aside a year-old resource consent for a 10-storey 39.5m building Equinox Capital Ltd proposes to build in central Wellington because the owners of a 2-storey heritage-listed former substation next door weren’t notified.

In her decision issued last Wednesday, Justice Ellis wrote: “In summary, I consider: (a) Sydney St Substation Ltd should have been given limited notification of Equinox’s resource consent application; (b) there was a material error in the 14 October 2016 decision not to publicly notify Equinox’s resource consent application; and (c) there were material errors in the 14 October 2016 decision granting Equinox’s resource consent application.

“There have been no matters raised which persuade me I should not exercise my discretion to grant relief here. I therefore make orders setting aside the notification decisions & the substantive resource consent decision, all of which are dated 14 October 2016.”

The dispute concerns buildings (heritage & proposed) a few doors from the courthouse, on what was Sydney St until 1993 and is now Kate Sheppard Place in Thorndon, a street noted for its “Elizabethan & Jacobean” architecture.

The category II heritage building is the old Sydney St substation at 19 Kate Sheppard Place, which has historical significance as one of the first substations constructed to distribute electricity in Wellington after the Mangahao hydro power station began operation in 1924.

Justice Ellis said it also had “some architectural significance due to what has been described as its ‘quirky mixture of architectural styles’”.

The lower of its 2 storeys originally housed the transformers & other substation equipment. The upper level has always been a home. “That unusual & experimental combination of utilitarian & residential design is regarded as adding to its architectural interest. A heritage covenant was placed on the building in 2011.”

In 2013 the Government sold the substation building to Sydney St Substation Ltd, owned by Trevor & Jillian Lord. They renovated & strengthened the building to some acclaim, with the assistance of a Wellington City Council grant. The entirety of the building is now used for residential purposes.

Justice Ellis concluded: “There can be no real doubt that the substation’s heritage value was highly influential in the decision to purchase it, and to renovate it at some expense. To suggest that an adverse effect on the substation’s heritage value does not, equally, adversely affect its owner seems unattractive. So if there is a minor adverse effect on the heritage value of the building there is a minor adverse effect on Sydney St Substation Ltd.

“Even if there is some flaw in that logic, there remains the further & more substantive (“anticipated development model”) issue. The views I have expressed about that strongly support the conclusion that the adverse effects on the owner of the substation (in terms of the matters of which discretion is restricted under rule 13.3.4, namely design, external appearance, siting & placement of building mass) have been understated and are at least minor.

“On any of the above analyses, therefore, Sydney St Substation Ltd was an affected person and should have received limited notification of Equinox’s resource consent application.”

In contrast with the judge’s view, the council notification said: “There are no affected persons in respect of this application (sections 95B/95E). It is noted that neighbours have registered an interest in works occurring on the subject site. Neighbour interest does not deem them to be affected parties under the tests of the act or qualify as special circumstances under the act in this case.”

The judge said most other buildings in the vicinity were multi-level office blocks “of limited street appeal”. The Lords sought judicial review of Wellington City Council’s approval of resource consent “authorising the construction of another such building immediately adjacent to the substation, on a site which is presently a carpark. In short, Sydney St Substation Ltd says that the council was wrong to grant the consent and also wrong to even consider it on a non-notified basis. They say that the substation will be significantly adversely affected by the proposed construction.”

Equinox (Chong Du Cheng & Kerry Knight) has plans for 63 apartments, a 39-room hotel with ground-floor lobby and ground-floor commercial space with a total floor area of 32,422m².

An important factor in the judge’s consideration was that the proposed building would exceed the height limit of 35.4m in the “low city” area, set out in the district plan.

According to the district plan guidelines, “Where a new development adjoins a heritage building that is 4 storeys or less, its height should be not more than one storey above the heritage building, over an area extending approximately 5-8m along & back from the street frontage at the common boundary with the heritage building”.

Link: Substation judgment

Attribution: Judgment.

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