3 industrial sales for JLL

JLL agents have sold 2 Penrose warehouses, one at a 5.1% yield and the other vacant, plus a Rosebank Rd industrial unit in Avondale.

Isthmus east

Penrose

13C Bassant Rd:
Features: 154m², vacant warehouse
Outcome: sold for $631,000 + gst
Agents: Richard McNaught & Luke Nash

641 Great South Rd:
Features: 3840m² site, 1731m² warehouse, low site coverage
Outcome: sold for $4.15 million + gst at a 5.1% yield
Agents: Richard McNaught & Luke Nash

Isthmus west

Avondale

390B Rosebank Rd:
Features: 632m² site, vacant 506m² industrial unit – warehouse 353m², office 153m²
Outcome: sold for $1.15 million + gst
Agents: Luke McGill & Richard McNaught

Attribution: Agency release.

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4 out of 6 sell at Bayleys’ Hauraki, Hawke’s Bay & Waikato auctions

4 properties were sold at Bayleys’ final Total Property 5 auction round last Thursday, out of 6 on offer.

The auctions covered the Hauraki Plains, Hawke’s Bay & Waikato. A Gull service station plus development land (pictured) at Ngatea was sold on a 5.7% yield. Other sales were at Napier, Hamilton & Te Awamutu.

South of the Bombays

Hauraki

Ngatea

44 Orchard Rd West:
Features: 1624m² site on State Highway 2, 96m² canopy for fully automated Gull fuel station; Gull NZ Ltd has 10-year lease plus 4 5-year rights of renewal; chattels include 60,000 & 50,000-litre fuel storage tanks, 3 self-service pumps, 4 filling stations & vapour recovery lines; unused land at rear of site accessed via service lane could offer opportunity for further development
Rent: $57,783/year net + gst
Outcome: sold for $1.02 million at a 5.66% yield
Agent: Josh Smith

Hawke’s Bay

Napier

110 Kennedy Rd:
Features: 126m² site in Marewa Shopping Centre, 250m² commercial building recently strengthened to 80% of new building standard; ground floor occupied by Canton Wok restaurant, second tenant occupies upstairs office space
Rent: $26,692/year net + gst
Outcome: sold post-auction for $585,000 at a 4.56% yield
Agent: Sam MacDonald

Waikato

Hamilton

Dinsdale

38 Whatawhata Rd:
Features: 90m² unit in suburban retail centre, previously operated as a beauty salon, comprising a reception & workspace area, 3 treatment rooms with separate heat pumps, staff room & bathroom
Outcome: sold vacant for $350,000
Agent: Jason Kong

Te Awamutu

106 Alexandra St:
Features: 479m² corner cbd site, 505m² bank building strengthened to seismic rating of 100% of new building standard; Westpac has occupied it since 1999 and is on 6-year term from August 2017
Rent: $104,000/year gross + gst
Outcome: sold for $1.5 million at a net 6.25% yield
Agents: Josh Smith & Blair Hutcheson

Attribution: Agency release.

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Bob Dey Property Report diary, week 20-26 August 2018

The diary is updated weekly and lists auctions, council meetings & agendas, hearings & submissions, economic release dates, events, Parliament order paper items and securities.

Council links

All Auckland Council agendas can be reached via http://infocouncil.aucklandcouncil.govt.nz/. The council livestreams (and archives) Town Hall meetings and some other meetings. You can check those at http://councillive.aucklandcouncil.govt.nz/.

Auckland Council

As Auckland Council makes changes to its website, hearing & submission pages can be hard to find. This is the new link to the page for submissions on consent applications:

https://www.aucklandcouncil.govt.nz/have-your-say/have-your-say-notified-resource-consent/notified-resource-consent-applications-open-submissions/Pages/default.aspx

Governing body

Governing body, Thursday 23 August at 9.30am, Town Hall

Committees

Auckland Domain committee, Thursday 30 August at 9.30am, 135 Albert St
Audit & risk committee, Monday 27 August at 9.30am, 135 Albert St
Civil defence & emergency management committee, Wednesday 29 August at 9.30am, 135 Albert St

Finance & performance committee, Tuesday 21 August at 9.30am, Town Hall:
8, Council-controlled organisations – approval of 2018-21 statements of intent
Recommendation
Attachments
Reconciliation of final statements of intent against shareholder 
Auckland Transport final statement of intent 2018-21
Watercare Services Ltd final statement of intent 2018-21
Panuku Development Auckland final statement of intent 2018-21
Auckland Tourism, Events & Economic Development final statement of intent 2018-21
Regional Facilities Auckland final statement of intent 2018-21
Community Education Trust final statement of intent 2018-21
Contemporary Art Foundation final statement of intent 2018-21
9, Ports of Auckland Ltd – proposed shareholder feedback on the draft statement of corporate intent
Recommendation
Attachments
Timeline of the implementation of the disestablishment of Auckland Council Investments Ltd, including statement of corporate intent timeframes under the Port Companies Act 1988
Ports of Auckland Ltd draft statement of corporate intent 2018-28
Memorandum of understanding Ports of Auckland Ltd & Auckland Council
10, Land acquisition in North Takanini
Recommendation
11, Committee information report
Recommendation
Attachments
24 July 2018 – Briefing on acquisitions & disposals – 10-year budget 2018-28 [published separately]
C1, confidential: Land acquisition in North Takanini

Boards, forums & panels:

Auckland City Centre Advisory Board, Wednesday 22 August at 3pm, 135 Albert St:
5, Update on Auckland Council’s operational response to homelessness
Recommendation
6, Memorandum – update on progress with Kia Whai Whare Tatou Katoa: Regional, cross-sectoral homelessness plan for Auckland
Recommendation
Attachments
Memo – Update on progress with Kia Whai Whare Tatou Katoa: Regional, cross-sectoral homelessness plan for Auckland
7, Endorsement of revised city centre targeted rate assessment criteria
Recommendation
Attachments
Draft city centre targeted rate investment criteria
8, City centre update
Recommendation
Attachments
Summary updates for city centre projects & initiatives
9, Board forward work programme
Recommendation
Attachments
Board forward work programme
City centre targeted rate programme of works (TR7)

Hauraki Gulf Forum, Monday 20 August at 1pm, Town Hall

Waitemata Local Board, Tuesday 21 August at 2pm, local board office, 52 Swanson St:
14, Local board annual report 2017/18
Local board annual report
15, Auckland Council’s quarter 4 & year-end performance report: Waitemata Local Board
16, 2006 – 2015 Urban forest canopy changes in the Waitemata Local Board area
Tree loss in the Waitemata Local Board over 10 years (2006–15) – draft
17, Auckland Transport August 2018 update
18, Project Streetscapes

Hearings:

Find hearings: https://www.aucklandcouncil.govt.nz/have-your-say/hearings/find-hearing/Pages/find-resource-consent-hearing.aspx

Avondale, Avondale racecourse, 2-18 Ash St, application by Avondale Jockey Club to subdivide a portion of land within the racecourse to enable future development; hearing Wednesday 3 October at 9.30am, Town Hall

Epsom, 57, 61-67 Ranfurly Rd and 8, 12 & 14 Epsom Avenue, application by Epsom Village Partnership to expand the retirement village; hearing Monday-Tuesday 29-30 October at 9.30am, Town Hall

Flat Bush, 508 Chapel Rd, application by 508 Chapel Road Partnership to create a childcare centre for 60 children; hearing Monday 27 August at 9.30am, Manukau Civic Building, 31-33 Manukau Station Rd

Grey Lynn, 11 Surrey Crescent, application by Surrey Crescent Cohaus Ltd for combined land use & subdivision consent for a 19-unit cohousing development & villa relocation, hearing Wednesday- Thursday 26-27 September at 9.30am, Grey Lynn Library Hall, 474 Great North Rd

Herne Bay, 113 Jervois Rd, application by Artifact Property Ltd (Liam Joyce) to demolish the buildings onsite and construct a 5-storey mixed-use building with ground-floor retail unit & 9 apartments one residential unit at ground floor and 2 on every upper floor, parking for 16 cars on 3 half-level basement levels; hearing Monday 3 September at 9.30am, Town Hall

Hillsborough, 2 Waikowhai Rd, application by Gong Yu to create 3 new dwellings and subdivide around them & the existing dwelling; hearing Thursday 13 September at 9.30am, Town Hall

Ponsonby, 94 Shelly Beach Rd, application by Auckland Council Healthy Waters Unit to construct wastewater & stormwater infrastructure to deliver water quality improvements in St Marys Bay & Masefield Beach: to install via tunnelling and operate a new underground sewage conveyance & storage pipeline connecting from New St/London St through to Pt Erin Park; a weir structure, pump station & odour control unit within Pt Erin Park; a smaller weir structure & odour control within St Marys Rd park; and a 450m outfall into the channel from the vicinity of Masefield Beach; hearing Tuesday-Friday 18-21 September at 9.30am, Town Hall

Regionwide, stormwater diversion, application by Auckland Council Healthy Waters Unit, hearing Tuesday-Friday 20-23 November at 9.30am, Town Hall

Westhaven Marina, application by Panuku Development Auckland to extend the north-western breakwater & causeway; hearing Tuesday-Thursday 23-25 October at 9.30am, Town Hall

Submissions:

To find applications open to submissions: https://www.aucklandcouncil.govt.nz/have-your-say/have-your-say-notified-resource-consent/notified-resource-consent-applications-open-submissions/Pages/default.aspx

Birkenhead, 26 Catrina Avenue, limited notification of resource consent application by Chinar Ltd for non-complying activity, to construct 9 residential units plus associated parking, submissions close Thursday 13 September

CBD, Quay St, footpath & road corridor between the western edge of Queens Wharf & the western edge of Marsden Wharf, application by Auckland Transport for resource consent to construct an in-ground palisade – a seawall – about 300m long, for seismic strengthening; the Princes Wharf & Ferry Basin section of the seawall upgrade will have separate resource consent applications still to be publicly notified’ submissions on this one close on Monday 17 September

Otahuhu, 14 Walmsley Rd, limited notification of application by G&M Property Development NZ Ltd to convert a commercial building into a childcare centre for up to 100 children; 6 stacked parking spaces; submissions open Friday 24 August

Ponsonby, 10 Seymour St, limited notification of application by Craig & Kym Andersen to undertake dwelling additions & alterations, including expanding the basement level to provide a rumpus room & double garage, extending at ground level at rear & front, reconfiguring the rooms to fit the enlarged space, and constructing a new upper level; widening the driveway to provide for access from 2 internal parking spaces, re-landscaping rear of the property to include a swimming pool; submissions close Thursday 23 August

Sandringham, 26 Aroha Avenue, limited notification of application by NJ Hart Trust to construct a 13-apartment building plus guest room & communal facilities, parking, excavations including rock breaking for the building platform, submissions close Friday 7 September

Takapuna, western stormwater network – 37 Lake View Rd, Killarney Park & the road reserve of Lake Pupuke Drive, Rangatira Avenue, Lake View Rd & Kowhai St, limited notification of application by Auckland Council Healthy Waters to replace, upgrade & extend the stormwater network in Takapuna; the proposal has been divided into 2 sections – the western & eastern networks; submissions close Tuesday 28 August

Auctions:

Barfoot & Thompson, residential Tuesday-Friday at 10am & 1.30pm, commercial Thursday 9 August at 10am; 34 Shortland St
Bayleys, residential, Wednesdays at 2pm, Bayleys House, Wynyard Quarter, 30 Gaunt St
City Sales, apartments, Wednesday 22 August at 12.30pm, 445 Karangahape Rd
Colliers, commercial, Wednesday 22 August at 11am, Takapuna, 129 Hurstmere Rd
NAI Harcourts, commercial, Thursday 23 August at 1pm, Takapuna, 128 Hurstmere Rd
Ray White City Apartments, Thursdays at 12.30pm, 2 Lorne St

Economy:

Building consents, July, Thursday 30 August
Migration, international travel, July, Tuesday 21 August
Retail trade survey, June quarter, Wednesday 22 August
Trade – overseas merchandise, July, Friday 24 August

Events:

NZ Institute of Building, national awards, Friday 24 August

Property Council, annual conference, Wednesday-Friday 29-31 August, Rotorua

Architectural Designers NZ, annual conference, Thursday-Saturday 25-27 October, Rotorua

Facilities Integrate, facilities management expo, Tuesday-Wednesday 25-26 September, ASB Showgrounds, Epsom, 217 Greenlane West

Listeds – NZ:

Auckland International Airport Ltd, annual meeting, Wednesday 31 October at 10am, Manukau, Vodafone Events Centre
Fletcher Building Ltd, annual result, Wednesday 22 August
Heartland Bank Ltd, annual meeting, Wednesday 19 September at 10am, Waipuna Hotel & Conference Centre; final court orders on corporate restructure moving shareholdings to new parent scheduled for Friday 19 October (if approved at annual meeting), implementation Wednesday 31 October, new Heartland Group Holdings shares to begin trading on the NZX & ASX Thursday 1 November
Metlifecare Ltd, annual result, Monday 27 August; annual meeting, Thursday 18 October at 2.30pm, Eden Park, Kingsland, 42 Reimers Avenue, South Stand
Metro Performance Glass Ltd, annual meeting, Friday 24 August at 10am, Ellerslie Events Centre
Michael Hill International Ltd, annual result, Monday 27 August
Oceania Healthcare Ltd, annual meeting, Tuesday 28 August at 2pm, Heritage Hotel, 35 Hobson St, Auckland
Steel & Tube Holdings Ltd, annual result, Friday 31 August
Stride Property Ltd & Stride Investment Management Ltd (together Stride Property Group), annual meeting, Thursday 30 August at 11am, Pullman Hotel

Parliament

Parliament resumes sitting on Tuesday 4 September

Click the email tab – [email protected].

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Precinct Properties presents a long list of positives from development & in financial structure

Major commercial property owner – and nowadays developer – Precinct Properties NZ Ltd lifted its net profit after tax for the year to June by 57.2% to $254.9 million.

The NZX-listed company’s biggest project at the moment is the $1 billion Commercial Bay development, redeveloping the Downtown Shopping Centre site at the foot of Auckland’s central business district. It’s also developing Bowen Campus in Wellington and has completed developments in Auckland’s Wynyard Quarter.

Image above: The trio of buildings at the centre of Precinct Properties’ strong performance – the existing PwC Tower at right, the new PwC Tower under construction and the existing HSBC House at 1 Queen St, to be redeveloped into a hotel with office above.

Chief executive Scott Pritchard said yesterday Fletcher Building Ltd had provided revised completion dates at Commercial Bay of September 2019 for the retail & December 2019 for the new PwC Tower (across Albert St from the building currently called PwC Tower).

Precinct also announced its plans for 1 Queen St, sitting on the Quay St frontage of the redevelopment, to include a 244-room luxury hotel operated by the InterContinental Hotels Group (IHG) – see separate story.

9% revaluation gain

Mr Pritchard said the quality of Precinct’s portfolio had resulted in a $208.7 million (9%) portfolio revaluation gain to $2.5 billion.

Precinct Properties is the largest city centre real estate owner in New Zealand, and Mr Pritchard said it was committed to its long-term strategy as a city centre specialist.

“The last financial year has delivered another strong result for our business. As we move forward with our strategy, we progressed a number of initiatives and achieved key milestones during the year.

“We have continued to take an active management approach with our investment portfolio & our development pipeline, leveraging Precinct’s market position.”

“The long-term outlook for the Auckland market remains strong, with solid demand drivers for city centre real estate across the office, retail, hotel & residential markets.”

Mr Pritchard said the Wynyard Quarter & Bowen Campus also contributed to this growth, with works progressing well over the last 12 months.

The Precinct Properties precinct: From the ANZ Centre up Albert St, down to the waterfront via Commercial Bay where Precinct is developing the new PwC Tower across the street from the existing PwC Tower, and yesterday announced the redevelopment of 1 Queen St (at right) to contain a hotel with offices on the upper levels.  Other Precinct buildings in this precinct are Zurich House and the AMP Centre.

Commercial Bay update:

Precinct’s reinforced its vision & long-term commitment to the rejuvenation of the central city with the announcement of the $298 million development at 1 Queen St (currently HSBC House), which will include the hotel in the lower half of the building.

Commercial Bay, looking out between the Cloud & Princes Wharf.

This development has been designed to integrate seamlessly with Commercial Bay. Its upper floors will also be remodelled to contain high quality office space & unique food & beverage options, including a rooftop bar.

Commercial Bay & its retail wrap’s Customs St frontage yesterday.

Mr Pritchard said phase one of the Commercial Bay retail remained on schedule, with international powerhouse H&M opening its flagship 3800m² store fronting Customs St in a fortnight, on Thursday 30 August. Passersby have been able to watch H&M’s creation in the new lowrise building beside the 21 Queen St offices of Zurich House, as windows have started to be placed at lower levels of the 39-storey Commercial Bay tower at the corner of Customs & Albert Sts.

“This marks a significant milestone for the transformational development which is reinvigorating the heart of the central city,” Mr Prithcard said. “The superb 4-storey retail offering promises to be the country’s premier H&M destination.

“Phase 2 of the Commercial Bay retail & the new PwC Tower have revised estimated completion dates, following the confirmation of a completion programme from main contractor Fletcher Building Ltd.

The revised completion dates are September 2019 for the Commercial Bay retail & December 2019 the new PwC Tower.

“The programme provided by Fletcher Building has been independently reviewed by Precinct’s expert programmer, RCP, who confirm the revised dates are achievable, subject to the main contractor’s performance.

“Precinct remains confident with the provisions of its construction contract, which protect the business from losses due to contractor delay.

“While any delay in a project is disappointing, we believe Fletchers are maintaining a very high standard of quality during a very challenging period within the construction industry.”

Commercial Bay’s entrance on to Quay St.

The new timeframes also affect prospective tenants: “Precinct continues to work closely with retailers at Commercial Bay to communicate the revised occupation dates. For those occupiers coming into the new PwC office tower, all have lease terms which extend beyond the revised completion dates of the office tower.”

Mr Pritchard said Commercial Bay continued to achieve a good level of leasing enquiry. Precinct had secured retail commitments to 76% and office commitments to 78%: “The $1 billion Commercial Bay waterfront development & lifestyle district is destined to become Auckland’s newest shopping, dining & social hub, offering a vast range of food & beverage outlets.”

Links:
Precinct Properties
Precinct Properties annual report
Commercial Bay

Related stories today:
Precinct Properties presents a long list of positives from development & in financial structure
Precinct Properties valuations & profit up, debt low
The 1 Queen St redevelopment

Attribution: Company release.

Continue Reading

Precinct Properties valuations & profit up, debt low

Precinct Properties NZ Ltd increased its net profit after tax by 57.2% to $254.9 million (2017: $162.1 million) in the year to June. The quality of Precinct’s portfolio including its active development pipeline has resulted in a portfolio revaluation gain of $208.7 million, or 9.0%.

Image above: The trio of buildings at the centre of Precinct Properties’ strong performance – the existing PwC Tower at right, the new PwC Tower under construction and the existing HSBC House at 1 Queen St, to be redeveloped into a hotel with office above.

Net operating income (distributable earnings), which adjusts for a number of non-cash items, has increased by 2.5% to $76.6 million ($74.7 million). This equates to 6.32c/share, in line with guidance (2017: 6.17c/share).

Revenue growth of 3.6% was primarily due to the completion of Wynyard Quarter stage 1, which was partially offset by foregone income related to development activity and 10 Brandon St, Wellington. After allowing for these transactions & activity, on a like-for-like basis gross rental income was 3.7% higher. This growth has driven an uplift in NPI by 5.4% to $95.3 million ($90.4 million).

As at 30 June 2018, Precinct’s portfolio value increased to around $2.5 billion following the strong revaluation gain. Precinct’s net tangible assets/share were up 12.9% to $1.40 (2017: $1.24).

Chief executive Scott Pritchard said yesterday: “The last financial year has delivered another strong result for our business. As we moved forward with our strategy, we progressed a number of initiatives and achieved key milestones during the year. We have continued to take an active management approach with both our investment portfolio and our development pipeline, leveraging Precinct’s market position.”

Focusing on a number of capital management initiatives during the year has resulted in $250 million of capital raised through the completion of a convertible notes offer & bond issue. Precinct also sold a 50% interest in the ANZ Centre in Auckland and sold 10 Brandon St in Wellington. These assets totalled $191 million of capital recycled.

“At year end our investment portfolio has continued to benefit from strong occupier markets. Achieving a high overall portfolio occupancy of 99% at year end and weighted average lease term of 8.7 years demonstrates this. Our Auckland portfolio has performed particularly, well with occupancy sitting at 100%, reflecting demand for premium inner-city office space. In Wellington, we have also reduced vacancy.

“In both Auckland & Wellington, we have successfully leased major expiries well ahead of vacancy. At the AMP Centre in Auckland, the QBE expiry has been fully leased at a premium of 17% to previous rentals. At Aon Centre in Wellington, 3 floors have been leased on the former IAG tenancy, with 2 remaining floors becoming available in early 2019.”

Mr Pritchard said the Auckland hotel market was experiencing unprecedented levels of growth in demand, which is forecast to persist through further growth in tourism numbers until at least 2025: “While a number of new hotel projects have been announced in the last 24 months, the increase in supply is expected to still fall short of demand over the short term and reach equilibrium over the medium to long term. This is expected to underpin robust room and occupancy rates.”

Commercial Bay

Commercial Bay remains on track to deliver a yield on cost of 7.5% and an increased profit on cost of 41% (June 17: 31%) or $283 million. Based on current project metrics, there remains a further $100 million of unrecognised development profit expected to materialise on completion.

Bowen Campus

In Wellington, construction works have continued to progress well over the last 12 months. We have now completed the facade installation at Charles Fergusson Tower with on floor works continuing. All works are targeted for completion late December 2018.

At Bowen State Building we have completed the majority of the structural works for the building including the north and south shear walls. The façade is now 90% complete for the building, installed from Level 1 to 10. On floor works are also underway to all levels.

Occupation of Bowen State Building by New Zealand Defence Force is expected in Q3 2019.

Financial highlights:

  • Net profit after tax increased by 57.2% to $254.9 million ($162.1 million)
  • Net property income, up 5.4% to $95.3 million ($90.4 million)
  • Net operating income, up 2.5% to $76.6 million ($74.7 million)
  • Full-year dividend, up 3.6% to 5.8c/share (5.6c/share), representing a 100% payout ratio (under AFFO – adjusted funds from operations)
  • Property revaluation gain of $208.7 million – 9% ($77.5 million)
  • Net tangible assets/share, up 12.9% to $1.40 ($1.24)
  • Earnings guidance for the June 2019 financial year, net operating income of about 6.60c/share, dividend expected to increase by 3.4% to 6c/share

Capital management:

  • $191 million of asset sales, providing capacity for new projects
  • $250 million of non-bank funding secured
  • Post-balance date refinancing of $760 million bank debt facility
  • Strong financial position, gearing of 25.0% (25.1%); pro forma gearing reduced to 19.4% at balance date following asset sales

Commercial Bay:

  • Advancing retail commitments to 76% (46% at June 2017) and office commitments to 78% (2017: 66%)
  • Yield on cost unchanged at 7.5%, with an increased profit on cost following the revaluation of 41% (June 2017: 31%), or $283 million
  • Phase 1 of the retail remains on schedule, with H&M opening its flagship 3800m² store on Thursday 30 August
  • A revised completion programme has recently been provided.

Bowen Campus:

  • Charles Fergusson Tower on track for completion in December & occupation by Ministry of Primary Industries
  • Bowen State Building to be occupied by NZ Defence Force, with lease starting April 2019
  • Yield on cost of 7.0%+, with an increased profit to 18%.

Future development opportunities:

  • Design has advanced for Wynyard Quarter development stages 2, 3 & 4; Precinct anticipates the second stage of the development will start in the next 6 months
  • Building design & marketing underway for precommitment leasing for the remaining development land at Bowen Campus.

Investment portfolio:

  • Auckland fully leased
  • Occupancy of 99% (2017: 100%) and a weighted average lease term across the portfolio maintained at 8.7 years (2017: 8.7 years)
  • 41 lease transactions completed, encompassing over 21,900m² & 598 parking spaces
  • Strong demand for space, with QBE expiring floors leased ahead of vacancy and 3 floors of IAG expiry leased at Aon Centre, Wellington
  • Strong like-for-like income growth of 3.0% – Auckland up 3.1%, Wellington up 2.9%
  • Generator occupancy of 73%, well above expectations; with 75% (9500m²) of its space launched during the year, the Generator business recorded a loss, as anticipated for this trading-up period.

Links:
Precinct Properties
Precinct Properties annual report
Commercial Bay

Related stories today:
Precinct Properties presents a long list of positives from development & in financial structure
Precinct Properties valuations & profit up, debt low
The 1 Queen St redevelopment

Attribution: Company release.

Continue Reading

The 1 Queen St redevelopment

Precinct Properties NZ Ltd announced the $298 million redevelopment of 1 Queen St – currently HSBC House – yesterday, to include a luxury hotel operated by the InterContinental Hotels Group (IHG), with office space above.

Images above & below: The redeveloped 1 Queen St, to contain hotel & offices, will sit alongside the Quay St frontage of the Commercial Bay development, which is dominated by a 39-storey tower now under construction.

Precinct chief executive Scott Pritchard said the premium waterfront redevelopment fronting the foot of Queen St, at the corner of Quay St, was designed to integrate seamlessly with Commercial Bay, which is being built on the former Downtown Shopping Centre site running up the rest of the first block of Queen St and facing Customs St East & Albert St, plus a small part of Quay St.

The overall project is 75% precommitted, with a management agreement entered into with IHG and a signed heads of agreement across 3700m² of the office premises. Precinct will fund the development through its existing debt facilities. On completion, the project is expected to generate a stabilised yield on cost of 7.0% and a profit on cost of 15%.

LT McGuinness will be the main contractor. Construction is scheduled to commence in the first quarter of 2020. LT McGuinness has been the contractor on Bowen Campus in Wellington & Wynyard Quarter in Auckland.

Project summary:

  • InterContinental Auckland will be a 244-room luxury hotel occupying levels 1-13 (excluding level 2)
  • Commercial office space will total 8700m², occupying levels 14-20
  • A rooftop bar & hospitality offering will feature on level 21
  • The lower levels of 1 Queen St are already being developed, to be included in the retail & hospitality offer of Commercial Bay
  • 1 Queen St will comprise a single-level basement & 22 upper levels, providing a total gross floor area of 27,500m².
  • The redevelopment will integrate with Commercial Bay from the ground level to level 2.
  • Signed heads of agreement over 3700m² of the office premises, which results in the overall project being 75% precommitted, with an expected yield on cost of 7.0% once complete
  • Entering into a 50% fixed price construction contract with LT McGuinness Ltd (the construction company owned by relatives of Mark McGuinness, head of Willis Bond Ltd, which is developing apartments in the Wynyard Quarter)
  • Construction is scheduled to start in 2020
  • The refurbishment is due for completion in 2022.

Links:
Precinct Properties
Precinct Properties annual report
Commercial Bay
LT McGuinness

Related stories today:
Precinct Properties presents a long list of positives from development & in financial structure
Precinct Properties valuations & profit up, debt low
The 1 Queen St redevelopment

Attribution: Company release.

Continue Reading

5 sales down country for Bayleys

Bayleys sold a property at Te Puke in its Total Property auction in Tauranga on Wednesday, and followed up with 4 Wellington sales yesterday, including 3 in Petone.

South of the Bombays

Bay of Plenty

Te Puke

27-31 Jellicoe St:
Features: 667m² site, 20m of main street frontage, 616m² single-level retail building with 3 tenants; being refurbished to accommodate the third tenancy with 5-year lease starting on 1 October
Rent: $84,000/year net + gst (including refurbished tenancy)
Outcome: sold for $1.105 million at a 7.6% yield
Agents: Brendon, Lynn & Ryan Bradley

Wellington

Petone

19-21 Gear St:
Features: 794m² site, 23m of street frontage, 794m² industrial building – 590m² warehouse with 5.5-6.25m stud & 2 roller doors, 102m² office & amenities, 102m² mezzanine
Rent: estimated potential income of $88,500/year net + gst
Outcome: sold for $1.42 million with vacant possession
Agents: Andrew Smith & Paul Cudby

73 Sydney St:
Features: 379m² site, 539m² 2-level office & warehouse building
Rent: estimated potential income $85,000/year net + gst
Outcome: sold for $935,000 with vacant possession
Agents: Paul Cudby & Andrew Smith

14 Victoria St:
Features: 465m² site, 328m² warehouse & office building, 75m² yard
Rent: estimated potential income $58,000/year net + gst
Outcome: sold for $745,000 with vacant possession
Agent: Richard Faisandier

Thorndon

85 Hutt Rd:
Features: 977m² site overlooking Hutt Rd & State Highway 1, 3 warehouse units totalling 385m² plus one-bedroom apartment; fully leased with additional income from billboard
Rent: $103,000/year net + gst
Outcome: sold for $1.275 million at an 8.07% yield
Agent: Bhakti Mistry

Attribution: Agency release.

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Cruise spending up 18%

More cruise voyages & passengers boosted cruise ship spending by 18.3% to $434 million in the year to June, Statistics NZ said yesterday.
The $67.1 million increase following a 9.9% rise in the previous 12 months.

Cruise visitors contributed $284 million, up 31.8% ($68.6 million), after a 0.6% decline in 2017, when the number of passengers fell. GST from cruise visitor spending contributed a further $43.4 million. Stats NZ said spending by cruise visitors had grown by 54.2% ($99.9 million) since 2015.

Vessel spend associated with services, including bunkering (fuel), fell 10% ($11.9 million) to $106.6 million.

Auckland & Tauranga had the largest total spending by port – up 11.2% to $131.4 million in Auckland, down 3% to $65.9 million in Tauranga.

Cruise ship passengers increased by 17% (38,000) to 259,000 after a 7% fall in 2017, largely because fewer ships were available for voyages.
Australian citizens made up 44% of all passengers in the 2018 year, US citizens 20%, NZ citizens 13%, UK citizens 8%. The NZ Cruise Association said cruise ships made over 700 port visits. Auckland received 211,000 passengers, up 9% (18,000), and Dunedin received 180,000, up 11% (17,000).

Attribution: Statistics NZ release.

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Heartland Bank lifts earnings 11%

Heartland Bank Ltd increased net profit after tax by 11% to $67.5 million in the year to June. Net operating income rose 15% to $196.8 million.

Chief executive Jeff Greenslade said yesterday the strong growth in profitability was driven by growth in underlying net finance receivables, which were up 12% to $4 billion.

Mr Greenslade said the growth strategy was delivering results in core business – reverse mortgage, motor & small business lending – while the bank’s Australian operations had grown 39%.

Assuming shareholders approve the company’s proposed restructure at the annual meeting on Wednesday 19 September, shares in the new parent company, Heartland Group Holdings Ltd, will begin trading on the NZX & ASX on 1 November.

The bank has entered the new financial year positively, expecting net profit after tax for the June 2019 year to be in the range of $75-77 million – a rise of 11-14%.

Financial highlights for the 2018 year (2017 in brackets):

  • Total comprehensive income, up 14.4% to $71.2 million ($62.2 million)
  • Net profit after tax, up 11% to $67.5 million ($60.8 million)
  • Net operating income, up 15% to $196.8 million ($171.3 million)
  • Impaired asset expense, up 47% to $22.1 million ($15 million)
  • Impairment ratio59% (0.45%)
  • Pretax profit, up 11.5% to $94.3 million ($84.6 million)
  • Basic & diluted earnings/share, 13c (12c)
  • Net tangible assets/share, up 9.5% to $1.04 (95c)
  • Total equity, up 16.6% to $664.2 million ($569.6 million)
  • Net finance receivables, up 12.4% to $4.0 billion ($3.6 billion)
  • Return on equity1% (11.6%)
  • Net interest margin42% (4.46%)
  • Cost:income ratio9% (41.9%)
  • Final dividend5c/share, full-year dividend 9.0c/share

Link: Heartland Bank

Earlier story:
6 August 2018: Heartland aims to add ASX listing in restructure

Attribution: Company release.

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On the move, August 2018

Oyster appoints development manager
Cheryl Macaulay dies
McLauchlan replaces Hunter on Argosy board
Jeremy Brown joins RDT Pacific board
Berry Simons promotes Andrews & Storer

On the move is a Bob Dey Property Report column about comings, goings, rises & falls. Contributions are welcome, including photos – email [email protected] with details (of the coming or going) & a jpeg or png image.

16 August 2018:

Oyster appoints development manager

Mark Hitchcock.

Oyster Property Group Ltd has appointed Mark Hitchcock as development manager as it continues to expand its property team.

Mr Hitchcock has 13 years’ national & international experience in property & business development, project delivery, commercial property management & leasing.

Most recently, he was principal property specialist for Auckland Transport, where he established a portfolio-wide retail strategy & implementation programme, which included redeveloping Devonport Wharf and delivering the new Manukau Bus Station retail.

Before Auckland Transport, Mr Hitchcock was principal commercial development manager for Transport for London, where he led strategic commercial property development programmes predominantly across the London Underground portfolio, as well as embedding commercial property outcomes into Crossrail Station designs.

Before going to London, he graduated from Auckland University with a BProp degree and was a sales & leasing agent at Colliers in Auckland for 2½ years.

His key focus at Oyster will involve identifying & executing value-add & redevelopment opportunities across the Oyster portfolio.

10 August 2018:

Cheryl Macaulay dies

Cheryl Macaulay.

Highly successful property syndicator Cheryl Macaulay died last Saturday after failing to fight off cancer. Her funeral will be held in Northcote this afternoon (1pm).

Mrs Macaulay launched her first property syndication business, Cheryl Macaulay Properties Ltd (later Commercial Investment Properties Ltd), from Timaru in 2003 but moved to Auckland in 2011. She joined forces in 2012 with KCL Property Ltd, which Bryce Barnett had been running since 1993, with offices in New Plymouth & Auckland.

They combined portfolios totalling 160 properties in New Zealand & Brisbane worth $800 million. In 2014, they sold KCL to Augusta Capital Ltd, where Mr Barnett is a director, but in 2015 Ms Macaulay branched out on her own again, incorporating a new syndication company, Silverfin Capital Ltd. She also chaired Auckland Adventure Jet Ltd for the last 8 years.
Earlier stories:
23 March 2014: Augusta confirms KCL takeover, Bayleys secures long-term contract
25 May 2012: Property syndicators Barnett & Macaulay join forces

McLauchlan replaces Hunter on Argosy board

Stuart McLauchlan.

Argosy Property Ltd has appointed Stuart McLauchlan as an independent director with effect from Wednesday 6 August, replacing Chris Hunter, who didn’t stand for re-election at the company’s annual meeting on Monday.

Mr McLauchlan owns Dunedin business advisory & accountancy firm GS McLauchlan & Co Ltd and has a wide spread of company directorships, including AD Instruments Pty Ltd, Dunedin Casinos Ltd, Dunedin International Airport Ltd, Ngai Tahu Tourism Ltd & Scenic Circle Hotels Ltd. He chairs the NZ Sports Hall of Fame, Pharmac Ltd, Scott Technology Ltd & UDC Finance Ltd, and is a member of the Otago-Southland branch of the Institute of Directors.

Chris Hunter.

Mr Hunter, who was on the Argosy board for 5 years, has a majority interest in NZ Strong Construction Ltd & related companies after buying the business from Shane Brealey in 2014. Last year, Mr Hunter added NZ Strong Construction & Development Ltd to the portfolio. He left Hawkins Construction Ltd in 2012 after nearly a decade with the company, finishing as chief executive. That followed a decade at Mainzeal Construction.

Jeremy Brown joins RDT Pacific board

Jeremy Brown.

Project management & quantity surveying firm RDT Pacific Ltd has appointed Jeremy Brown as a director. He has over 35 years of project management experience and joined RDT Pacific as an associate director in 2014.

Mr Brown has experience in all aspects of project & commercial management in New Zealand & the UK and has held a range of senior management positions at Canary Wharf Group, Mace Group, Arup Project Management & Beca.

6 August 2018:

Berry Simons promotes Andrews & Storer

Specialist environmental law firm Berry Simons has promoted senior environmental lawyer Helen Andrews to partner and Kate Storer to senior associate.

Helen Andrews.

Founding partner Sue Simons announced the appointments at an Environmental Defence Society dinner the firm sponsored.

The other founding partner, Simon Berry, said: “Not only has Helen done excellent work on a range of projects, she plays an extremely important role in organising our in-house training and mentoring & supervising our junior staff.”

After graduating from Auckland University with a conjoint degree in law (honours) & arts (majoring in geography), Ms Andrews completed her professional studies at the Institute of Professional Legal Studies in Auckland in 1999. She was a solicitor at Chapman Tripp, solicitor & senior associate at Minter Ellison & senior associate at Chancery Green before joining Berry Simons in 2015, and has been involved in a wide range of large & complex projects, including the Auranga development, the first private plan change to be approved under the Auckland unitary plan. She‘s recently been working closely with the Environmental Defence Society on Resource Management reform, including co-presenting a workshop with the society.

Kate Storer.

Kate Storer has been at Berry Simons for 5 years, following 5 years as a senior researcher & inhouse lawyer at the Environmental Defence Society, where she remains a director, and 3 years as a civil litigation lawyer at Grimshaw & Co.

After completing a law degree (with honours) at Bristol University, she worked in private practice & for an environmental not-for-profit think tank. She also holds a first class master’s degree in public law from Auckland University.

Ms Simons commented: “Kate’s progress as a practitioner has been exponential over the last couple of years. She has exceptional legal & writing skills and has developed the strategic thinking & commercial acumen that has made her a fully rounded environmental law practitioner.”

Ms Storer has been involved in a wide range of work since joining Berry Simons, including a number of major greenfields developments, special housing areas, plan changes, and commercial, residential & mixed-use developments.

Got an appointment you want the world to know about? Hit this email tab – [email protected].

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5 apartments sell at auction

All 5 apartments auctioned at Ray White City Apartments today were sold under the hammer – 2 in Zest (pictured) sold as one lot after being passed in separately.

One other unit, in the brand new Oasis at the top of Myers Park, was withdrawn from the auction but auctioneer Ted Ingram indicated it would be sold within 24 hours.

CBD

Kitchener St

Metropolis, 1 Courthouse Lane, unit 1005:
Features: 43m², one bedroom
Outgoings: rates $1517/year including gst; body corp levy $5007/year
Outcome: highest bid of $484,500 has gone on contract
Agents: Mitch Agnew & Ryan Bridgman

Learning Quarter

Silo, 23 Emily Place, unit 8M:
Features: 35m² + 8m² balcony, one bedroom, 2 decks, secure covered parking space on separate title
Outgoings: rates $1304/year including gst, parking $155/year; body corp levy $5085/year, parking $829/year
Outcome: sold for $485,000
Agents: Mitch Agnew & Ryan Bridgman

Uptown

Oasis, 26 Poynton Terrace, unit 2A:
Features: 110m², 2 bedrooms, bathroom & ensuite with underfloor heating, air-conditioning, 2 enclosed balconies, secure covered parking space
Outgoings: body corp levy $4347/year
Outcome: withdrawn from auction “but will be sold within 24 hours,” said auctioneer Ted Ingram
Agents: Damian Piggin & Krister Samuel

Victoria Quarter

Zest, 72 Nelson St, units 913 & 1017:
Features: both 20m², furnished one bedroom
Outgoings, unit 913: rates $1033/year including gst; body corp levy $1856/year excluding water; unit 1017: rates $1304/year including gst; body corp levy $1906/year excluding water
Income assessments, unit 913: $300/week, fixed until 7 November; unit 1017: $300/week, fixed until 23 February
Outcome: unit 913 passed in at $215,000, unit 1017 passed in at $225,000, both then sold together for $450,000
Agents: Judi & Michelle Yurak

North-east

Takapuna

Spencer on Byron, 9-17 Byron Avenue, unit 1708:
Features: 48m², one bedroom, hotel furniture package, covered parking space
Outgoings: rates $5844/year including gst; body corp levy $3429/year
Income assessment: $/week in hotel lease
Outcome: sold for $390,000 + gst
Agents: Damian Piggin, James Mairs & Gillian Gibson

Attribution: Auction.

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Avoka apartment sells

The one apartment auctioned at City Sales today, a unit in the Avoka building off Karangahape Rd, was sold under the hammer at just over $3000/m² internal. The building has remediation works pending.

CBD

Uptown

31 Day St, unit 8C:
Features: 60m², one bedroom, deck
Outgoings: rates $3185/year (commercial rating) including gst; body corp levy $8413/year including gst
Outcome: sold for $182,500
Agent: Susan Frear

Attribution: Auction.

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Kingsland townhouse & Penrose warehouse passed in

A Kingsland townhouse and the Momotea restaurant group’s Penrose headquarters were both passed in at Bayleys’ auction today, without a bid on either.

Townhouse

Isthmus west

Kingsland

2 Second Avenue, unit 4:
Features: 56m², 3 bedrooms, 2.5 bathrooms, parking space
Outcome: no bid
Agents: Robyn Clark & Peter Tanner

Commercial

Isthmus east

Penrose

14 Greenpark Rd:
Features: 1627m² site, 1451m² warehouse, seismic rating 71%, head office for Momotea restaurant group, plus apartment
Rent: $201,141/year net + gst, lease expiring in 2035
Outcome: no bid at auction postponed from last Wednesday
Agent: Millie Liang

Attribution: Auction.

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House prices up outside Auckland again, down marginally in Auckland

The house sale price trend continued in July: Auckland down slightly, rest of the country well up, so an increase nationally.

The Real Estate Institute said today Auckland’s median price fall from July last year was $1000, or 0.1%, to $835,000.

The increase in the rest of the country was 8.6%, from $419,000 to $455,000, and the national median rose 6.2%, to $550,000.

The median hit records in 4 regions: 

  • Northland, up 5.7% to $481,000
  • Taranaki, up 15.4% to $375,000
  • Nelson, up 15.2% to $547,000, and
  • Marlborough, up 13.4% to $453,500.

Institute chief executive Bindi Norwell said today the shortage of properties available continued to push prices up in all regions except Auckland.

“Auckland continues on its steady trajectory, with only minor changes in median price each month. Delving into the Auckland region in greater detail highlights that Auckland & North Shore cities [the institute continues to gauge the market on the boundaries of the councils that were turned into the super-city in 2010] saw median price decreases of 1.6% & 1.3% respectively to $892,000 & $985,000. However, Waitakere City saw a median increase of 4.6% to $774,000, highlighting the popularity of this more affordable part of Auckland.”

House sales rose nationally by just 42 (0.7%) in July, from 5619 last July to 5661. Outside Auckland, the rise was just 7 (0.2%), from 3942 to 3949. In Auckland, the rise was 35 (2.1%), from 1677 to 1712.

The institute’s national house price index rose 4.9% from a year ago to a new high of 2722. Outside Auckland it rose 8% to a new high of 2589. In Auckland, it was unchanged from June and up 1.6% on last July at 2883.

Auctions were used in 11.5% of all sales in July and 649 homes sold under the hammer, down from 13.5% (760) sold by auction last July.

Auctions fell from 24% of Auckland sales in July 2017 (408 homes) to 21% (357).

The number of properties available for sale nationally fell by 3.8%, from 22,123 to 21,288, the lowest level since last July.

Auckland’s inventory fell 2.6%, from 8019 to 7810, the lowest level for 10 months.

The breakdown of sales in price brackets and their share of the market in July 2018 & July 2017 (in brackets):

$1 million-plus: 737 (729), 13.0% both months
$750-999,999:  807 (687), 14.3% (12.2%)
$500-749,999:  1715 (30.3%), 1516 (27.0%)
Under $500,000: 2402 (42.4%), 2687 (47.8%)
Total sales: 5661 (5619)

Auckland median prices & volumes on old council boundaries for July 2018 and, in brackets, June 2018 & July 2017:

Auckland City: $892,000 ($988,000, $906,500), 548 (638, 564)
Franklin: $675,000 ($675,000, $665,000), 97 (76, 70)
Manukau: $832,000 ($810,000, $820,000), 312 (359, 315)
North Shore: $985,000 ($1,016,000, $998,000), 274 (282, 268)
Papakura: $667,500 ($640,000, $650,000), 81 (66, 90)
Rodney: $873,000 ($876,500, $850,000), 147 (154, 131)
Waitakere: $774,000 ($765,000, $739,900), 253 (285, 239)
Auckland region: $835,000 ($850,000, $836,000), 1712 (1860, 1677)

Attribution: Institute release.

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Argosy buys Albany Warehouse

Argosy Property Ltd has unconditionally acquired The Warehouse property at 11 Coliseum Drive in Albany for $26.4 million. The property is next to the Argosy-owned Albany Mega Centre and comprises 7600m² of warehouse, 760m² of office, mezzanine & garden centre and 413 parking spaces.

Argosy chief executive Peter Mence said on Monday the acquisition price represented an initial passing yield of 5.0% and the pre-tax internal rate of return was 6.78%. The property has 6.5 years to run on the initial 12-year lease.

Mr Mence said the acquisition size was within Argosy’s investment policy criteria and the property had met all the necessary due diligence requirements: “We are very pleased to have secured a strategically important property and strengthened our relationship with a longstanding & valued partner in The Warehouse Group. The purchase allows us to now consider a range of organic growth options across the entire Albany Mega Centre site. Longer term, we are excited about the opportunity & value this acquisition can deliver for Argosy & its shareholders.”

Settlement is expected to occur on or around 7 September.

Attribution: Argosy release.

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4 sales, 7 leases

Industrial & commercial property specialist Commercial Realty Ltd has reported deals completed over $50,000 from May to July. Some had confidential pricing which I’ve mentioned, but I’ve omitted those with so little detail as to make this report meaningless.

Below are 4 sales & 7 leases signed around the Auckland region.

Sales

CBD

Lorne St

8 Lorne St, basement:
Features: 275m², secondary retail
Outcome: sold for $1.475 million
Agent: Reid McGowan

North-west

New Lynn

72 Delta Avenue:
Features: 1200m² standalone building
Outcome: sold to a dance studio for $1.875 million + gst
Agents: Mike Edward & Daniel Speck

South

East Tamaki

15 Bishop Lenihan Place, unit 22:
Features: 102m², live/work unit, 2 stacked parking spaces
Outcome: sold for $477,725
Agents: David Turner & Reid McGowan

Papatoetoe

260 Puhinui Rd:
Features: 8051m² site, 3664m² building
Outcome: sale & leaseback, price confidential
Agents: Mike Edward, Mark Bramwell & Reid McGowan

Leases

Isthmus east

Penrose

Part 323 Church St:
Features: 600m² car yard
Rent: leased to a car dealership for $75,000/year net + gst
Agent: Willie Fernandes

100 Gavin St:
Features: 3171m² warehouse, 1800m² yard, leased to an international tenant
Rent: $455,242/year net + gst
Agent: Danny Guise

22 Industry Rd, unit 2:
Outcome: sold to an investor for $875,000
Agent: Kerry McGuffog

Isthmus west

Avondale

12A Saunders Place:
Features: 698m² warehouse & office
Rent: leased for $93,000/year on a long term to a local Rosebank Rd business at the full asking rental
Agents: Tom Cooper & Mark Bramwell

South

Drury

4 Creek St:
Features: 2000m² yard, 700m² warehouse
Rent: leased for $105,000/year net + gst
Agents: Mark Bramwell & Brad Rathbun

Mangere

50 Andrew Baxter Drive:
Features: 1800m² site, 1080m² warehouse & office
Rent: leased for $175,000/year net + gst
Agents: Danny Guise & Mike Edward

Manurewa

Part 239 Browns Rd:
Features: 1200m² warehouse
Rent: leased to an international tenant for $120,000/year net + gst
Agent: Brad Rathbun

Attribution: Agency release.

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KiwiBuild prequalification opens

The Government opened the prequalification process on Monday for first-homebuyers & second-chancers wanting to buy a KiwiBuild home.

Aspiring homeowners can apply online at kiwibuild.govt.nz to determine if they are eligible to enter a ballot for a KiwiBuild home.

Image above: Artist’s impression of housing being built at McLennan, Papakura.

The target is 100,000 new homes over 10 years, half of them in Auckland.

Housing & Urban Development Minister Phil Twyford said the production rate would take 3 years to rise to the annual target of 10,000 new KiwiBuild homes: “In the first year we will build 1000 KiwiBuild homes, with the full ramp-up reaching 5000 homes by June 2020 and 10,000 homes by June 2021. KiwiBuild will build modest starter homes, initially focusing on areas with high housing demand & affordability pressures.

“First-time buyers & second-chancers will be given plenty of notice about homes that are coming on the market so there is no rush to prequalify.

“But this is a great opportunity for people to familiarise themselves with the KiwiBuild system and seek trusted, professional advice before entering a ballot to buy their first home.”

The first ballot will open next month for a limited number of KiwiBuild homes in Papakura. Kiwis will have over 6 weeks to prequalify & enter the ballot before it’s drawn in October.

To ensure KiwiBuild homes go to the people they are intended for, applicants must:

  • be a first-time buyer or a ‘second chancer’
  • have an income below $120,000 for a single applicant, or no more than $180,000 for more than one buyer
  • be a New Zealand permanent resident or citizen, or a resident visa holder who’s ‘ordinarily resident in New Zealand’, and
  • intend to live in the home as their main place of residence for at least 3 years.

The online prequalification process will ask for specific documentation including:

  • proof of residency
  • proof of income
  • statutory declaration signed by an authorised person (e.g. a Justice of the Peace, lawyer), and
  • financial pre-approval from a bank or other lender

The Government has committed $2 billion for KiwiBuild and said it intends to work with iwi, councils & the private sector, establishing a home-building programme, undertaking major greenfield & urban development regeneration projects and driving innovation to develop new ways to build quality affordable homes.

Links:
KiwiBuild
KiwiBuild work programme
Unitec land for housing
McLennan development, Papakura

Attribution: Ministerial release, KiwiBuild websites.

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3 Airport Oaks sales, complex deal in Napier

Colliers agents have sold 3 warehouse & office properties in the Airport Oaks precinct in Auckland. In one of 2 Napier transactions, 4 corner properties were sold in a multi-vendor deal.

South 

Airport Oaks

14 Amelia Earhart Avenue:
Features: 3887m² gated site, 1257m² 2-level office building, 59 parking spaces
Rent: $330,838/year net + gst
Outcome: sold for $4.2 million + gst at a 7.9% yield
Agents: Brad Johnston, Paul Jarvie & Matthew Barnes

39B Rennie Drive:
Features: 392m² warehouse & office unit leased to Cross Fit Oaks Ltd, & fitted out as a gym
Rent: $37,836/year net + gst
Outcome: sold for $920,000 + gst at a 4.1% yield
Agent: Ash Vincent

64 Richard Pearse Drive:
Features: 10,165m² site, 3869m² warehouse & office
Outcome: sold for $8.5 million + gst
Agents: Brad Johnston, Dwayne Warby, Paul Jarvie & Dean Collins

South of the Bombays

Hawke’s Bay

Napier

60 Prebensen Drive:
Features: 5014m² industrial site with less than 10% site coverage, 960m² building on fringe of Onekawa large-format retail precinct
Rent: $100,000/year net on lease expiring in November
Outcome: sold for $2.35 million at a 4.26% yield on current rent
Agent: Dan Walker

57, 59 & 65 Thackeray St and 15 Faraday St:
Features: 4 adjoining properties at the corner of Faraday & Thackeray Sts, Napier South
Outcome: sold in a complex, multi-vendor deal for a combined $2.649 million – a corner retail property at 65 Thackeray St & vacant site at 15 Faraday St sold for $1.45 million, a residential property at 59 Thackeray St sold for $599,000, and a residential property at 57 Thackeray St sold for $600,000
Agent: Dan Walker

Attribution: Agency release.

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5 Wellington sales include Courtenay Place fixture

3 properties at the southern Te Aro end of Wellington’s central business district and 2 in suburban Island Bay & Rongotai have been sold by Bayleys agents.

South of the Bombays

Wellington

Island Bay

296 The Parade:
Features: 650m² corner site with development potential, 1920s mix of commercial & residential buildings totalling 220m² – 2 shops, 2-bedroom home plus a one-bedroom flat
Rent: estimated $70,000/year net + gst fully occupied
Outcome: sold for $1.1 million
Agents: Mark Walker & Baha Mabruk

Rongotai

56 Kingsford Smith St:
Features: leasehold 2273m² site, fully refurbished 1827m² former warehouse with seismic upgrade to 70% of new building standard, converted for retail & office use, 10 tenants on mostly new 3- to 6-year leases
Rent: $264,000/year net + gst (after ground rent paid)
Outcome: sold for $2.47 million at a yield of 10.69%
Agents: Fraser Press & Baha Mabruk

Te Aro

66-72 & 74-78 Courtenay Place (pictured above):
Features: 1111m² site next to Readings Cinema complex, 2-level 1919.5m² character retail building strengthened to 70% of new building standard, 4 hospitality tenants
Outcome: sold for $8.5 million at a 7.9% yield
Agent: Jim Wana

5 Tory St, levels 1 & 2:
Features: 2 unit-titled character office floors totalling 425m², interlinking internal staircase, seismic assessment 100% of new building standard, 6-year lease to Heyday Ltd from January 2018, 3 3-year rights of renewal
Rent: $102,384/year net + gst
Outcome: sold for $1.3875 million at a 7.38% yield
Agents: Grant Young & Mark Walker

21 Vivian St:
Features: 582m² site zoned central area, 428m² high stud workshop, 10 parking spaces
Outcome: sold vacant for $2 million
Agents: Mark Walker & Jim Wana

Attribution: Agency release.

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Summerset lifts underlying profit on fatter margins, feels impact of flatter housing market, looks at Australia

Retirement village operator Summerset Group Holdings Ltd said yesterday strong margins on both sales & resales lifted its underlying profit for the June half by 27% to $45.2 million, in line with the profit guidance provided in early July.

Under IFRS (international financial reporting standards), net profit fell 9.2% to $82 million. Underlying profit includes realised resale gains, development margin & deferred tax expense, minus the fair value movement of investment property. Under IFRS, fair value is included.

Financial & operational highlights (2017 first half in brackets):

Net profit after tax under NZ IFRS, down 9.2% to $81.97 million ($90.25 million)
Investment property fair value movement, down 10.1% to $78.3 million ($87.1 million)
Underlying profit, up 26.8% to $45.2 million ($35.7 million)
Total revenue, up 29.5% to $65.7 million ($50.7 million)
Net operating cashflow, up 7.4% to $92.8 million ($86.4 million)
Total assets, up 25.2% to $2.42 billion ($1.9 billion)
Net tangible assets, up 32.2% to 377.85c/share (285.72c/share)
Basic earnings/share, down 10% to 37.22c (41.37c)
Diluted earnings/share, down 10.2% to 36.53c (40.67c)
Interim dividend, up 54% to 6c/share (3.9c/share)
Total occupation right sales, down 7.4% to 299 (323)
New sales, down 19% to 145 (179)
Resales, up 6.9% to 154 (144)
New units delivered, down 3.5% to 165 (171), but on track for delivery of 450 for the full financial year
Development margin, 17.9% higher at 33% (28%)
Realised development margin, up 21.3% to $25.8 million ($21.3 million)
Gross new sale proceeds, up 3.2% to $78.3 million ($75.9 million)
Resale realised gains, up 38.3% to $14.9 million ($10.8 million)
Sales margins lift returns, fair value fall reflects flatter property market

Chief executive Julian Cook said the underlying profit increase was driven primarily by strong margins on both new & resales: “While sales volumes were lower than the same period of 2017, we are seeing good levels of contracts on homes – both on resales & homes to be completed before the end of 2018 – many of which will settle in the second half of the year.”

He said the lower fair value movement reflected smaller price increases in response to the flattening property market being seen in some areas of the country.

As for the sharp increase in development margin, up from 28% to 33%, Mr Cook said the result was “pleasing, but reflects the particular mix of retirement units settled in this period, and our long-run expectations for development margin are less than this”.

Summerset grew total assets by 25% from a year ago to $2.4 billion.

“We delivered 165 new homes this half year and we are on target to meet our build rate of 450 homes for the year. This is despite continuing pressure from the Auckland construction market. Our key construction activity in Auckland is to complete our Hobsonville village, main apartment buildings at Ellerslie, and new villa builds at Karaka & Warkworth.”

Residents moved into the first homes at Casebrook (Christchurch) & Rototuna (Hamilton) villages in the June half.

Summerset recently received resource consent for its proposed Avonhead village in Christchurch, and is awaiting the outcome of consent applications for proposed villages in Boulcott (Lower Hutt) & Kenepuru (Wellington). Resource consent for its proposed village in St Johns (Auckland) has recently been declined.

“We are currently working through this decision, but remain confident we will be able to progress a successful village on this site,” Mr Cook said. “There is strong demand for all of these villages and we are keen to progress them as soon as possible.”

Company sees gains from staff benefits

In May, Summerset announced additional staff benefits, including a day of leave for staff birthdays, travel voucher prizes every quarter and paid sick leave from the first day of employment. These complement the staff benefits announced in 2017.

“Pleasingly we’ve seen the staff attrition rate at our villages drop by 8% in the last 12 months, and the company-wide attrition rate has reduced almost 7% over the same period. We believe this is a result of both the investment we are making in our staff and the Government’s equal pay settlement.

“However we are seeing the shortages in care staff increase due to the changes introduced to immigration last year by the previous government. We believe it is important the current government recognises the importance of immigration alongside local training & development to ensure there are sufficient qualified & competent people in the aged-care sector.”

Mr Cook said Summerset continued to investigate the feasibility of an Australian expansion. It has opened an office in Melbourne with a dedicated team who are working through the appropriate diligence process. The company said it was making good progress.

Attribution: Company release.

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We have a super-city plan, now change it

Auckland council planners say the Government’s proposals for national planning standards will conflict with important features of the Auckland unitary plan, which took 6 years to formulate and is close to becoming fully operative.

110 pages of the council planning committee’s agenda last Tuesday were devoted to the draft standards and the council staff’s proposed submissions on them.

The big issue for councillors was to ask – or, to varying suggested degrees, tell – the Government & Ministry for the Environment the council would need more time to put the standards in place. The proposal is 7 years but Auckland wants 10.

The big issue for staff is the complexity, including likely needless doubling up of terminology for 2 large plan changes coming up soon, and that will mean extra cost.

Linley Wilkinson, the council’s lead planner on Auckland-wide planning, whose previous role was to lead the integration of the old councils’ plans into the super-city Auckland Council’s unitary plan, told the committee the idea of national standards had been around for a long time, especially when the Resource Management Act was introduced in 1991.

Now that the draft has been written, the Ministry for the Environment wants the standards gazetted by next April.

The draft’s aim is to standardise the structure & form, chapter layout, spatial planning tools, zone framework, metrics for noise & vibration and digital & planning requirements for plans & policy statements throughout New Zealand.

Ms Wilkinson said some of the standards would have significant impacts for Auckland, which had the most complex & largest plan in the country, combining both regional & district plans (assessments previously separated into the functions of regional & local councils).

“We’ve really scrutinised each standard to see what impact they will have on the unitary plan. There is quite a lot of significance. The zoning framework does not cover the full sweep of what our plan moves in. They are pitching these standards at more medium-sized councils. It has been a little bit disappointing for us, and we feel some of the standards will substantially unpick some of the unitary plan.”

She said that if the council was forced to produce a revised plan in 7 years, it wold have to start work on it 2-3 years earlier than projected.

Auckland Council’s planners generally supported the standardisation intent to achieve consistency & improve accessibility. But they said the standards would have a significant impact on the regional policy statement, regional coastal plan, zone framework & definitions.

Main points in the council submission

The standards:

  • would challenge the Auckland unitary plan’s policy direction
  • would reverse agreements or decisions made in partnership with iwi or other stakeholders
  • don’t reflect the outcomes the community anticipates
  • would reduce the number of zones
  • didn’t contain a section specifically on urban growth, and
  • didn’t contain a section specifically relating to mana whenua.

The council planners are concerned that reducing zone numbers will mean revisiting the whole underlying policy framework, after they’d gone to great lengths to harmonise the legacy zonings of the pre-super-city councils. Instead of relitigating those issues, the council planners say the council should build on work already completed through the unitary plan – that one, point 3.6 in the submission, is likely to leave the standards writers about as confused as I am at what is meant.

Perhaps the biggest conflict will come in the naming & basis of zones. The council used names to describe zones whereas the standards proposal is for residential zone names based on density.

The submission: “This does not make sense in the Auckland context, where 3 of the residential zones in the Auckland unitary plan have no density limit. Instead, the zones are names in accordance with the housing typology provided for.”

While the key concern at the committee was around how mayor Phil Goff might best convey the council’s unhappiness at conflicting versions, members generally ignored that – as with the way different versions of the old councils’ plans were worked through to reach an agreed formula – the best course might be a delay in gazetting the current draft.

In that case, the debate ought to have been about how to present a delay in a good light.

That good light could be:

  • To agree some more complexity for large urban regions than would be needed for smaller towns & cities
  • To spend another year getting more agreed uniformity,
  • Alternatively, educate members of Parliament before the draft is gazetted on what unworkable sections will cost the country, landowners, developers, home owners.

Links, Auckland Council planning committee agenda 7 August 2018:
12, Draft national planning standards – Auckland Council submission
Recommendation
Attachments
Process for developing national planning standards
Planning standards relevant for the unitary plan
Auckland Council submission on draft national planning standards

Attribution: Council committee meeting & agenda.

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Council committee insists on promised consultation over Tamaki reserve land swaps

Auckland Council’s planning committee agreed last week to remedy the council’s failure to consult the public over plans for reserves in the Tamaki regeneration area.

Consultation had been promised, but council staff arrived at last Tuesday’s meeting with a recommendation to notify the proposed open space plan change without that prior notification going ahead.

However, the committee agreed public consultation should be carried out on the Tamaki open space network plan before proposed rezoning & land exchanges of Taniwha Reserve, Maybury Reserve West & Boundary Reserve are progressed.

Planning team leader Tony Reidy said the council had acquired about 200 land parcels on subdivision over the last year, including the 3 Tamaki reserves & some land swaps in the Tamaki regeneration area.

The council-controlled organisation in charge of its land management & disposal, Panuku Development Auckland, had discussed with council departments & iwi the rezoning of 10 land parcels as part of its land disposal & rationalisation process, and intended to bundle them into one open space plan change to dispose of them efficiently & cost-effectively.

Quizzed by former Tamaki-Maungakiekie Local Board chair Josephine Bartley – who was elected as a councillor last year, replacing Denise Lee after she was elected to Parliament – Mr Reidy said the local board had consulted “at a broader level”.

He told Cllr Bartley the current batch of changes were for land swaps and were more straightforward than a number of others where more controversial changes were proposed, and on these later changes the board had asked for community consultation.

While Mr Reidy said the board had told staff they were comfortable with these 3 reserve changes proceeding, but wanted to see consultation on others, Cllr Bartley commented: “It’s a very piecemeal approach… They’ve almost given up hope on the consultation. I don’t think that’s good enough – the local board are just another tick in the box, and one that has implications for other areas of Auckland. It doesn’t make sense to do it this way.

“The only implication I can see is timing [for the Tamaki regeneration project], but this is just doing it the right way in the community that has lost trust. The good thing is that trust could be rebuilt.”

Links for 7 August 2018 planning committee agenda:
9, Auckland unitary plan (operative in part) – proposed open space plan change Recommendation   
Attachments
Proposed open space plan change maps [published separately]   
Proposed open space plan change section 32 evaluation report [published separately]   
Panuku land disposal & rationalisation process    
Open space zoning guidelines

Attribution: Council committee meeting & agenda.

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New Urban Partners scheme for Mission Bay a $200 million project

Urban Legacy & Partners Ltd (Haydn & Mark Staples) said at the weekend it would lodge its application this week for a notified consent hearing on its proposal to redevelop half of the central block across Tamaki Drive from Mission Bay beach with a $200 million scheme.

Image above: The Tamaki Drive-Patteson Avenue corner of the proposed redevelopment.

The Staples family, through earlier companies Retail Holdings Ltd & Urban Partners Ltd, has owned much of the block for 3 decades and has contemplated several major transformations, but this is the biggest & most comprehensive.

The scheme to replace existing buildings contains 7 new buildings with a range of heights, materials & colours and provides sightlines across the site and pedestrian laneways through it.

The Mission Bay proposal:

From 8 storeys on Tamaki Drive, 5 levels on Patteson Avenue, 3-level townhouse pods on the Marau Crescent side.

  • The site covers about half a block – 75-79, 81-87 & 89-97 Tamaki Drive, 6-12 & 14 Patteson Avenue and 26, 28 & 30 Marau Crescent
  • zoned business local centre under the unitary plan
  • a mix of commercial (retail and food & beverage), entertainment (cinemas) & residential
  • gross floor area of 35,095m²
  • 2920m² of food & beverage
  • new cinema complex (up to 5 cinemas on 2 levels) that accounts for 955m²
  • up to 100 apartments
  • up to 265 basement & ground-level parking spaces
  • The design “references” elements of the art deco flavour of Mission Bay
  • The architects are the Buchan Group

Urban Partners said it was in the process of consulting with tenants after 18 months of spatial testing of the site’s opportunities & constraints, including 3 sessions with the council’s independent & non-statutory urban design panel.

Gradual rise from 3 to 8 storeys

Project manager Doug Osborne said the 3 levels of townhouses proposed for 3 lots on Marau Crescent deferred to the residential zoning on the other side of the crescent “with a lower height & sensitive integration with the surrounding neighbourhood”.

Building heights would gradually increase along Patteson Avenue & Tamaki Drive, culminating with an 8-level building on the corner of Tamaki Drive & Patteson Avenue.

The company has owned a large part of Mission Bay’s commercial area for many years and, I wrote in 2014, was still investigating development options.

Laneways are proposed through the site.

One project where it achieved more rapid action was in the development of a $60 million data centre at Takanini for Spark Digital Ltd. Retail Holdings funded, designed, managed & constructed the centre, which opened in October 2014.

Also at Takanini, the company built the Southgate bulk retail centre, sold to Augusta Capital Ltd in 2014 for syndication.

The company has acquired assets at Waiwera over a number of years with a vision of creating a wellness destination that has a mix of complementary attractions & accommodation.

Retail Holdings was the brainchild of brothers Haydn & Mark Staples, who ran a retail business in the 1970s and began acquiring premises they were operating out of.

Links:
Urban Partners
Urban Partners blog

Earlier stories:
3 May 2015: Augusta settles Southgate purchase with 36% of syndication unsold
26 December 2014: Augusta to syndicate Southgate at Takanini
12 December 2014: Retail Holdings rebrands as Urban Partners
15 February 2010: Drive Holdings faces new council opposition to Mission Bay project
17 April 2009: Panel tells council planners to stop playing internal politics with consent applications
27 March 2009: Commissioners weigh up rules on right to demolish Mission Bay shops
16 March 2009: Mission Bay project hinges on question over permission to demolish
16 August 2002: Update: OK for bar in Mission Bay restaurant

Attribution: Company release & websites.

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Greenland & Golden Horse start 1400-apartment job on old Goodman industrial site

Chinese state-owned developer Greenland Group & Golden Horse Group of Hong Kong turned the first sod on Thursday for a 6.9ha 1400-apartment joint-venture project at Erskineville in Sydney’s inner-west, on a former industrial site which Goodman Group sold to Golden Horse in 2014.

Construction partner for stage 1 of the Park Sydney development is local family-owned builder Richard Crookes Constructions Pty Ltd, which has worked on several Greenland projects.

Image above: Park Sydney masterplan, highlighting amenities.

The masterplanned residential community will be developed in 5 stages and will ultimately feature 9 development blocks ranging in height from 2-8 storeys.

Park Sydney, 4km from Sydney’s cbd, will have a 7446m² public park, a supermarket & specialty shops, a fresh food precinct, eat street, medical centre & childcare centre.

Greenland Australia managing director Sherwood Luo said: “Together with Golden Horse Australia, we’ve been planning Park Sydney since 2016, so it’s particularly exciting to see major projects of this scale starting to take shape and watching how they transform the local area.

“We are converting this large former industrial precinct into an engaging & inclusive residential community that will ultimately become home to some 3000 residents.”

The value to Goodman of its exit

Golden Horse Group expanded into Australia in 2013 and bought the former industrial site in Erskineville from Goodman Group the next year. For Goodman (owner of NZX-listed Goodman Property Trust’s management company & cornerstone investor in the trust), that deal was among many as the group sold $A1.9 billion of mostly industrial assets in a year, and reinvested the lot to generate higher development returns.

Builder with long list of staff support programmes

On a different tack, the builder on this project has a lot to say about how it treats its staff – an eye-opener at a time the New Zealand construction sector has been grumbling about contract arrangements, and this government (like the last one) is talking about increasing training for & numbers in the construction industry.

Richard Crookes Constructions says on its careers page: “RCC believes the success of every project depends on the ability of their personnel and the synergy of the project teams… RCC’s business is based on maintaining long-term relationships with clients, partners & subcontractors.”

It also lists a number of staff-supporting views that I’m sure would be novelties if espoused in New Zealand:

  • We build a talent pipeline
  • We expect our staff to engage in the business and be part of its success, growth & evolution. In return we invest in their growth & development. We give people autonomy, support & the resources they need to perform at their best
  • We maintain a flat management structure with an open door policy and an honest & collaborative culture
  • Fitness passport gives individuals & families access to multiple facilities (gyms, swimming pools) which allows you to go as often as you like
  • Exercise incentives, health assessments, mindfit programme, access to trainers, $A100 annual rebate & annual flu vaccinations
  • RCC offers corporate rates with BUPA to all employees in an effort to encourage healthy lifestyles
  • Every employee receives one day off every 6 months – employees are encouraged to use the leave for engaging in health & wellbeing activities, spending time with family & friends or to relax
  • Each employee has the ability to purchase an additional 2 weeks of annual leave/year
  • Maternity & paternity leave is offered when members of the RCC family start or expand their own families
  • We would like your salary to work as hard as possible; for this reason, we offer salary packaging options such as novated leases (a lease arrangement, usually for a vehicle, where the employer takes on the obligations of the lessee to the financier, which ceases if the employee leaves the job)
  • Our staff can access a range of discounts from partnering retailers
  • RCC has a financial advisor in-house who is available to meet with staff one on one
  • We believe in & support females at RCC; one of the programme offerings is our women’s leadership lunch & learns
  • We offer an array of learning & development for our employees through coaching sessions, formal mentoring programmes, external training, role-specific technical training & leadership development programmes across all levels.

Links:
Park Sydney
Greenland Australia
Golden Horse Australia
Richard Crookes Constructions

Earlier story:
17 August 2015: Urban renewal lifts Goodman Group

Attribution: Joint venture release, Greenland, Golden Horse & Richard Crookes websites.

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Dun & Bradstreet sells itself to private equity

New York-listed international commercial data & analytics specialist Dun & Bradstreet Inc entered into an agreement this week to be privatised by an investor group led by a former Blackstone Group LP private equity specialist & 2 other fund managers.

The $US145/share cash offer under the definitive merger agreement puts a $US6.9 billon price on the company, including the assumption of $US1.5 billion of Dun & Bradstreet’s net debt & net pension obligations.

The purchase price represents a 30% premium over Dun & Bradstreet’s closing share price of $US111.63 on 12 February, the last day of trading before the company announced a strategic review & an indication of its willingness to consider all options for value creation.

Dun & Bradstreet still has an out – a 45-day “go-shop” period, during which it will actively solicit, evaluate & potentially enter into negotiations with and provide due diligence access to parties that offer alternative proposals.

The acquisition group is led by Bermuda-registered CC Capital Management LLC, Cannae Holdings Inc and funds affiliated with Thomas H Lee Partners LP.

CC Capital founder & senior managing director Chinh Chu said he looked forward to unlocking “the immense potential within this venerable company”, which has been in business since 1841.

The investor group will commit equity financing for the transaction. BofA Merrill Lynch, Citigroup Inc and Royal Bank of Canada subsidiary RBC Capital Markets advised the investor group and have committed to debt financing.

Company doubles earnings/share

Dun & Bradstreet also reported its financial results for the June quarter on Thursday:

  • Revenue under GAAP (generally accepted accounting principles) up 8% to $US440 million, both before & after the effect of foreign exchange
  • As-adjusted (value to new owner) revenue down 4% before the effect of foreign exchange, down 3% after to $US394 million
  • Operating income up 46% to $US112 million
  • As-adjusted operating income down 11% to $US80 million due to large contract timing shifts
  • GAAP diluted earnings/share doubled to $US2.50 ($US1.22)
  • As-adjusted diluted earnings/share flat at $US1.40.

Links:
8 August 2018: Dun & Bradstreet enters into a definitive agreement to be acquired by investor group led by CC Capital, Cannae Holdings & Thomas H Lee Partners
CC Capital

Attribution: Dun & Bradstreet release, CC Capital.

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4 sales south of Auckland in Bayleys’ auction series

4 properties in Hamilton, Rotorua & Tauranga have been sold in Bayleys’ Total Property 5 auction series as it continues down country. 6 of the 8 properties up for sale at the Auckland auction were sold on Wednesday.

South of the Bombays

Bay of Plenty

Rotorua

1151 Arawa St:
Features: 382m² cbd site with development potential, 224m² 1930s earthquake-prone character building, occupied by Hannahs Shoes for decades; new 130-room Pullman Hotel being developed 2 properties away in a conversion of the former Zen building, owned by Chow Group Management Ltd
Outcome: sold vacant for $437,500 + gst
Agent: Brei Gudsell

Rotorua – Ngapuna

236 Te Ngae Rd & 5 Hamiora Place:
Features: 4721m² corner site on State Highway 30, main occupant is longstanding business Telfer Marine Ltd on a 10-year lease from October 2017; also 19 storage units
Rent: $108,000/year net + gst (Telfer Marine); $63,440/year gross + gst (storage units)
Outcome: sold for $2.35 million + gst at a 7% yield
Agents: Mark Slade & Brei Gudsell

Tauranga

116 Third Avenue:
Features: 1012m² site, 24m road frontage, 538m² industrial building most recently used by an automotive business – warehousing 348m², offices & amenities 95m², mezzanine 95m²
Outcome: sold with vacant possession for $2 million + gst
Agents: Lloyd Davidson & Laura Taylor

Waikato

Hamilton

100 Clarence St:
Features: 954m² site zoned commercial fringe, 190m² purpose-built suite of medical offices, 12 parking spaces; near cbd & Waikato Hospital
Outcome: sold with vacant possession for $946,500 + gst
Agents: David Cashmore, Rebecca Bruce & Jason Kong

Attribution: Agency release.

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JLL sells 5 buildings in east, west & on Shore

JLL agents have sold a vacant 3-storey Parnell building, 2 buildings on the west of the isthmus in Lynfield & Mt Eden and a unit in Vinegar Lane, and a multi-tenanted Browns Bay building on the Shore (pictured).

Isthmus east

Parnell

24 York Street:
Features: 599m² 3-level standalone building zoned business mixed use
Outcome: sold with vacant possession for $4.1 million + gst
Agents: Jason Armstrong & Ian Hall

Isthmus west

Grey Lynn

25 Pollen St, corner Crummer Rd:
Features: vacant 80m² retail or office unit, 46m² exclusive courtyard in Vinegar Lane development
Outcome: sold for $1.175 million + gst
Agent: Alex Wefers

Lynfield

210 White Swan Rd:
Features: 1011m² site, 330m² building, childcare centre licensed for 54 children, 13 parking spaces
Rent: $121,000/year net + gst
Outcome: sold for $2.325 million + gst at a 5.2% yield
Agents: Kevin Reardon & Alex Wefers

Mt Eden

101 Mt Eden Rd:
Features: 1812m² investment & development site, multi-tenanted building
Outcome: sold for $5.6 million + gst at a 2.7% yield
Agents: Tommy Zhang & Kevin Reardon

North-east

Browns Bay

41 Bute Road:
Features: 2093m² site, 1044m² net lettable area, 2-level multi-tenanted building in 7 titles, 6 ground-floor retail tenants + Lollipops childcare centre upstairs licensed for 75 children, 31 parking spaces
Outcome: sold for $6.9 million + gst at a 6% yield
Agents: Ian Hall & John Binning

Attribution: Company release.

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Live/work unit sells, 4 commercial units leased

A Rosedale live/work unit has been sold and 4 units – 2 industrial, one each of office & retail – leased in the latest round of transactions by Bayleys North Shore agents.

Sale

North-east

Rosedale

9 Lovell Court, unit G:
Features: 121m² – office downstairs, residential upstairs, 4 parking spaces, tenant Duke Le
Rent: $21,840/year net + gst
Outcome: sold in August for $667,000 + gst at a 3.27% yield
Agents: David Han & Ian Waddams

Leases

North-east

Milford

166 Kitchener Rd, suite D & K:
Features: 52m² office, parking space
Rent: leased at the end of July for $13,785/year net + gst, parking space at $25/week (equals $1300/year), rent excluding parking $12,485/year net + gst, premises rental $240/m²
Agent: Ian Waddams

Silverdale

12 Anvil Rd, unit 1:
Features: 274m² industrial unit – warehouse 224m², office 52m², 4 parking spaces
Rent: leased in August for $40,000/year net + gst
Agent: Rosemary Wakeman

Wairau Valley

7 Colway Place, unit A:
Features: 142m² industrial unit, 3 parking spaces
Rent: leased at the end of July for $23,000/year net + gst, warehouse 117m², office 25m²
Agent: Trevor Duffin

North-west

Kelston

1-3 West Coast Rd:
Features: 2m² retail in Chinese medical clinic
Rent: leased at the end of July for $5200/year net + gst, premises rental $2600/m²
Agents: Dev Choudhury & Meng He

Attribution: Agency release.

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Millbrook Resort starts work on $50 million addition

Queenstown’s Millbrook Resort has won resource consent for the $50 million development of the neighbouring 67ha Dalgleish Farm into an addition to its golfcourse, interspersed with 42 sections for high-end homes.

Image above: Millbrook’s Ben O’Malley, project manager Stuart Anderson & senior construction manager Darin Paki Paki (both of Signal Management Group) on the new development site.

It’s taken owner Millbrook Holdings (NZ) Ltd 4 years of planning, appeals, hearings & zone changes through the Queenstown Lakes District Council. The company is 90.6% owned by the Ishii family of Tokyo, who have been involved in the resort since its development began in 1987. Individual residential sites are privately owned & freehold.

The multi-award-winning 200ha resort will add 9 golf holes to Millbrook’s 27-hole course, enabling it to operate 2 full 18-hole courses. The resort’s residential limit will remain at 450 homes.

Initial site clearance is underway and work has almost been completed under a separate consent to shift the Arrow irrigation pipe to make way for the development.

Groundworks include a raft of ecological & landscape enhancements, and the first land titles should be issued in late 2020. Once the new golfcourse is constructed & “grown in”, it should be playable by 2021.

Millbrook property & development director Ben O’Malley said the net was cast “far & wide” for project tendering, and the main earthworks contract went to Grant Hood Contracting Ltd, of Ashburton.

Experienced local turf specialist company TIC Projects Ltd (Geoff & Belinda Andrew), which developed the resort’s Coronet 9 course, has been awarded the main golfcourse construction project & a golfcourse irrigation installation contract.

Millbrook is still working through detailed design on works such as roading, reticulated services & the resort’s distinctive schist stone walls.
In the initial earthworks phase, 500,000m of material will be moved within the site. A “zero cut to fill” balance means all work will be carried out with material contained within the farm area, and topsoil stripped & stored before being re-spread once earthworks are complete.

Map: The additional golfcourse will be interspersed with 42 high-end homes.

Irrigation race connection & storage lake among upgrades

Mr O’Malley said Millbrook had been working alongside the Friends of Lake Hayes & the Otago Regional Council to support their initiative to discharge off-peak water from the Arrow River irrigation race to Mill Stream, which runs through Millbrook into Lake Hayes: “They believe this will help enhance the water quality of Lake Hayes and we have the means to provide them the link between the Arrow Irrigation Co Ltd pipe & Mill Stream.”

The regional council is part-way through a plan change process that will see a minimum flow placed on the Arrow River, from which Millbrook currently sources its golf irrigation water via the irrigation company.

The minimum flow process would pose a risk to Millbrook’s golf operations, as its sand-based tees & greens, installed to meet international PGA specifications, require daily watering: ‘”To guard against this risk we’re also constructing a 30 million litre water storage lake on the farm land.”

Mr O’Malley said the new 36-hole format at Millbrook had been described as a game changer for the resort, effectively adding 100% golf capacity with 2 18-hole courses that can be operated simultaneously.

Members’ course will change daily

He said the growing number of Millbrook Country Club members would be able to play an ever-changing private members’ course on a daily basis, with another 18 holes available for tourists & locals.

It’s also good news for the long-term future of the NZ Open, currently hosted at Millbrook in conjunction with Sir Michael Hills’ The Hills golfcourse.

The Open has long planned to move to a 3-course model, similar to international Dunhill Links and AT&T events, and having 2 courses available at Millbrook would enable this goal to be achieved.

The new land also lends itself to the development of 2 discretely & geographically separated residential neighbourhoods.

The large upper plateau contains 24 sites boasting elevated panoramic views over fairways & pastoral lands to the wider basin. The lower slopes are home to a further 18 sites with north-facing outlooks over an enhanced Mill Stream & the last of the new golf holes. Mr O’Malley expected most of the sites to sell for over $1 million each.

Parts of Mill Stream will be widened to create larger waterways & enhanced wetlands. The new development will retain a rural, agrarian style, with over 20ha of working farmland retained for grazing and retention of a historic woolshed.

The original 1860s farmhouse will also stay on the land, with some sympathetic additions.

Link: Millbrook Resort

Attribution: Company releases, website.

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Mipad smart hotel opens in Queenstown

Mipad Holdings Ltd (Lewis Gdanitz & Yoshihuro Kawamura) has opened the 4-star mi-pad Queenstown, which the owners describe as “New Zealand’s first fully ‘smart’ hotel” and “a next-generation, energy-conscious hotel experience for the smart traveller and the marriage of technology, sustainability, comfort & convenience”.

The 6-storey hotel at 4 Henry St has 57 rooms with the latest in-room tech, multiple social spaces & a rooftop terrace (where the view above is from).

And the key to mi-pad Queenstown is that there is no key.

Guests booking their stay download the hotel’s personal app, ‘Mia’, and their smartphone becomes a room key, meaning physical check-ins (or check-outs) are a thing of the past.

“Mia also has a range of other tricks up her sleeve, enabling guests to set temperatures & mood lighting in their room (even remotely), request room service or alert hotel staff that they don’t want to be disturbed.

“Access to the hotel is available 24/7 thanks to the technology. Once guests are settled in, Mia transforms into a personal digital concierge, delivering the latest information on events, activities or offers and encouraging the guest to experience the best of the destination.

The $15 million John Blair-designed hotel is in the heart of Queenstown.

Years in the making

Mr Gdanitz, a Queenstown property developer, spent 3 years developing the mi-pad hotel concept – “the result of 15 years of research, travelling the world and finding the places that did accommodation really well.

“I’m delighted that we’ve been able to deliver a property that’s unlike anything else on offer in New Zealand, operating on a premise of affordable luxury delivered using the latest technology.

“I’m also very proud of the eco-conscious initiatives we have in place for every aspect of the operation.”

Mipad Holdings is a joint venture between Mr Gdanitz and hotel investment & development company TJK NZ Ltd, which owns luxury boutique hotels The George in Christchurch and Regent of Rotorua.

TJK NZ chief executive Stephen Borcoskie said the company had a proud pedigree of leadership in, and commitment to, the New Zealand hotel industry: “Our goal is to always exceed customer expectations by excelling in service delivery, and we’re thrilled to be entering the Queenstown market, which consistently leads the way in delivering world-class experiences & lifelong memories to visitors from around the globe. It makes perfect sense to open a unique property like this in Queenstown.”

Hotel manager Kylie Hogan has 20 years’ experience in international resort management, and commented on the unusual management style: “We’re offering an innovative, connected hotel experience for smart travellers who’d prefer to spend their hard-earned dollars on experiences rather than pay over the odds for accommodation.

“We appreciate that they want to keep in touch with family, friends or colleagues, whether they’re here to ski their hearts out, check out bike trails, enjoy some world-class golf or award-winning wines.

“Mia’s the key to all of that, the complete package for guests who want to have fun like a local.”

The hotel’s beds are queen-size, rooms have clever storage options, smart TVs and bathrooms featuring organic products & top-of-the-line hair-styling tools.

Guests can have as much or as little interaction with mi-pad staff and other guests as they like, including the option to share experiences, photos or messages through Mia’s private chat group. A floor-to-ceiling ‘social wall’ in the hotel’s entrance lobby also features Mia’s latest updates & guests’ shared experiences.

The hotel offers snack & breakfast options, but Mi-pad’s owners decided to keep F&B services to a minimum to encourage guests to savour the town’s eateries.

The rooftop terrace has an outdoor fireplace, plentiful seating & 270° views of Lake Wakatipu & surrounding mountains.

Link:
Mipad Hotels

Attribution: Company release.

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Bob Dey Property Report diary, week 13-19 August 2018

The diary is updated weekly and lists auctions, council meetings & agendas, hearings & submissions, economic release dates, events, Parliament order paper items and securities.

Council links

All Auckland Council agendas can be reached via http://infocouncil.aucklandcouncil.govt.nz/. The council livestreams (and archives) Town Hall meetings and some other meetings. You can check those at http://councillive.aucklandcouncil.govt.nz/.

Auckland Council

As Auckland Council makes changes to its website, hearing & submission pages can be hard to find. This is the new link to the page for submissions on consent applications:

https://www.aucklandcouncil.govt.nz/have-your-say/have-your-say-notified-resource-consent/notified-resource-consent-applications-open-submissions/Pages/default.aspx

Governing body

Governing body, Thursday 23 August at 9.30am, Town Hall

Committees

Appointments, performance review & value for money committee, Thursday 2 August at 9.30am, 135 Albert St
Auckland Domain committee, Thursday 30 August at 9.30am, 135 Albert St
Audit & risk committee, Monday 27 August at 9.30am, 135 Albert St
Civil defence & emergency management committee, Wednesday 29 August at 9.30am, 135 Albert St
Community development & safety committee, Thursday 16 August at 9.30am, 135 Albert St

Environment & community committee, Tuesday 14 August at 9.30am, Town Hall:
8, Weiti development & wider Okura catchment issues, update (covering report)
9, New Lynn, exchange of part of Margan Reserve for other land Recommendation
13, Developing a new strategy to prepare for an ageing population, submission
14, Local Government Regulatory Systems Amendment Bill, submission
15, Committee information – updates, memos, briefings summary
Attachments:
Auckland’s climate change action plan, update
Auckland’s urban trees, update
Forward work programme
Extra attachments:
Regional pest management plan, process for finalising it
Cat management, approach
Zero Carbon Bill, council submission
Whenuapai, briefing on testing for PFAs (an acronym for a group of chemical compounds known as per- & poly-fluoroalkyl substances)
Analysis of council programmes against findings in Hauraki Gulf Forum’s State of Our Gulf 2017 report
Memo, long-term management of myrtle rust
Global activity memo
Response to the petition presented to the 12 June meeting about use of 1080 poison in the Hunua Ranges
C1, Whenuapai, acquisition of land for open space

Finance & performance committee, Tuesday 21 August at 9.30am, Town Hall

Boards, forums & panels:

Auckland City Centre Advisory Board, Wednesday 22 August at 3pm, 135 Albert St
Hauraki Gulf Forum, Monday 20 August at 1pm, Town Hall

Hearings:

Find hearings: https://www.aucklandcouncil.govt.nz/have-your-say/hearings/find-hearing/Pages/find-resource-consent-hearing.aspx

Birkdale, 33 Salisbury Rd, application by Horizon Resources Ltd (Wayne Wright) for 2-level early childcare centre for 114 children; hearing Wednesday 15 August at 9.30am, Takapuna, ex-council chamber, 1 The Strand

Flat Bush, 508 Chapel Rd, application by 508 Chapel Road Partnership to create a childcare centre for 60 children; hearing Monday 27 August at 9.30am, Manukau Civic Building, 31-33 Manukau Station Rd

Grey Lynn, 11 Surrey Crescent, application by Surrey Crescent Cohaus Ltd for combined land use & subdivision consent for a 19-unit cohousing development & villa relocation, hearing Wednesday- Thursday 26-27 September at 9.30am, Grey Lynn Library Hall, 474 Great North Rd

Herne Bay, 113 Jervois Rd, application by Artifact Property Ltd (Liam Joyce) to demolish the buildings onsite and construct a 5-storey mixed-use building with ground-floor retail unit & 9 apartments one residential unit at ground floor and 2 on every upper floor, parking for 16 cars on 3 half-level basement levels; hearing Monday 3 September at 9.30am, Town Hall

Hillsborough, 2 Waikowhai Rd, application by Gong Yu to create 3 new dwellings and subdivide around them & the existing dwelling; hearing Thursday 13 September at 9.30am, Town Hall

Ponsonby, 94 Shelly Beach Rd, application by Auckland Council Healthy Waters Unit to construct wastewater & stormwater infrastructure to deliver water quality improvements in St Marys Bay & Masefield Beach: to install via tunnelling and operate a new underground sewage conveyance & storage pipeline connecting from New St/London St through to Pt Erin Park; a weir structure, pump station & odour control unit within Pt Erin Park; a smaller weir structure & odour control within St Marys Rd park; and a 450m outfall into the channel from the vicinity of Masefield Beach; hearing Tuesday-Friday 18-21 September at 9.30am, Town Hall

Regionwide, stormwater diversion, application by Auckland Council Healthy Waters Unit, hearing Tuesday-Friday 20-23 November at 9.30am, Town Hall

Westhaven Marina, application by Panuku Development Auckland to extend the north-western breakwater & causeway; hearing Tuesday-Thursday 23-25 October at 9.30am, Town Hall

Submissions:

To find applications open to submissions: https://www.aucklandcouncil.govt.nz/have-your-say/have-your-say-notified-resource-consent/notified-resource-consent-applications-open-submissions/Pages/default.aspx

Beachlands, 17a Bell Rd, application by Signature Building Ltd (Gavin Hunt) to establish & operate a childcare facility for 105 children & 17 staff, removing the existing dwelling & garage and constructing a purpose-built building comprising 678m² of floor area, 564m² of associated outdoor play area to the east & south, and 19 onsite parking spaces + manoeuvring area at the front; submissions close Wednesday 15 August

Manurewa, 46 Halver Rd, limited notification application by Harsh Diwan to convert a dwelling & sleepout to a childcare centre for 60 children & 8 staff; submissions close Wednesday 15 August

Onehunga, 1A Bamfield Place, application by Auckland Council Community Facilities for resource consent to build a coastal boardwalk running from Bamfield Reserve, Onehunga, to Taylors Bay Rd Reserve, Hillsborough; submissions close Friday 17 August

Ponsonby, 10 Seymour St, limited notification of application by Craig & Kym Andersen to undertake dwelling additions & alterations, including expanding the basement level to provide a rumpus room & double garage, extending at ground level at rear & front, reconfiguring the rooms to fit the enlarged space, and constructing a new upper level; widening the driveway to provide for access from 2 internal parking spaces, re-landscaping rear of the property to include a swimming pool; submissions close Thursday 23 August

Sandringham, 26 Aroha Avenue, limited notification of application by NJ Hart Trust to construct a 13-apartment building plus guest room & communal facilities, parking, excavations including rock breaking for the building platform, submissions close Friday 7 September

Takapuna, western stormwater network – 37 Lake View Rd, Killarney Park & the road reserve of Lake Pupuke Drive, Rangatira Avenue, Lake View Rd & Kowhai St, limited notification of application by Auckland Council Healthy Waters to replace, upgrade & extend the stormwater network in Takapuna; the proposal has been divided into 2 sections – the western & eastern networks; submissions close Tuesday 28 August

Auctions:

Barfoot & Thompson, residential Tuesday-Friday at 10am & 1.30pm, commercial Thursday 9 August at 10am; 34 Shortland St
Bayleys, residential, Wednesdays at 2pm, Bayleys House, Wynyard Quarter, 30 Gaunt St
City Sales, apartments, Wednesday 15 August at 12.30pm, 445 Karangahape Rd
Colliers, commercial, Wednesday 15 August at 11am, Takapuna, 129 Hurstmere Rd
NAI Harcourts, commercial, Thursday 23 August at 1pm, Takapuna, 128 Hurstmere Rd
Ray White City Apartments, Thursdays at 12.30pm, 2 Lorne St

Economy:

Building consents, July, Thursday 30 August
Business price indexes, June quarter, Friday 17 August
Cruise ship traveller statistics, June, Thursday 16 August
Food price index, July, Monday 13 August
Labour market statistics (income), June quarter, Wednesday 15 August
Migration, international travel, July, Tuesday 21 August
Population, national estimates at 30 June, Tuesday 14 August
Retail trade survey, June quarter, Wednesday 22 August
Trade – overseas merchandise, July, Friday 24 August
Transport vehicle registrations, July – Infoshare tables, Friday 17 August

Events:

NZ Institute of Building, national awards, Friday 24 August

Property Council, annual conference, Wednesday-Friday 29-31 August, Rotorua

Facilities Integrate, facilities management expo, Tuesday-Wednesday 25-26 September, ASB Showgrounds, Epsom, 217 Greenlane West

Listeds – NZ:

Asset Plus Ltd, annual meeting, Friday 17 August at 1pm, 80 Queen St, Deloitte Centre, Link Market Services
Fletcher Building Ltd, annual result, Wednesday 22 August
Heartland Bank Ltd, annual result, Wednesday 15 August; annual meeting, Wednesday 19 September at 10am, Waipuna Hotel & Conference Centre
Metlifecare Ltd, annual result, Monday 27 August
Metro Performance Glass Ltd, annual meeting, Friday 24 August at 10am, Ellerslie Events Centre
Oceania Healthcare Ltd, annual meeting, Tuesday 28 August at 2pm, Heritage Hotel, 35 Hobson St, Auckland
Steel & Tube Holdings Ltd, annual result, Friday 31 August
Stride Property Ltd & Stride Investment Management Ltd (together Stride Property Group), annual meeting, Thursday 30 August at 11am, Pullman Hotel

Parliament:

Provisional order paper for Tuesday 14 August [PDF 484k]

Government orders of the day:

1, Appropriation (2018/19 Estimates) Bill, third reading (may be taken with an imprest supply bill)
2, Overseas Investment Amendment Bill, committee stage continued
3, Canterbury Earthquakes Insurance Tribunal Bill, first reading (introduced 1 August)
4-6, Regulatory Systems (Economic Development) Amendment Bill, Regulatory Systems (Housing) Amendment Bill & Regulatory Systems (Workforce) Amendment Bill, first reading for each (all cognate bills introduced 11 July – business committee determination)
8, Tariff (PACER Plus) Amendment Bill, second reading (bill enables the application of preferential tariff rates and contains majority amendments; report of the Foreign Affairs, Defence & Trade Committee presented 6 July)
10, Electoral (Integrity) Amendment Bill, committee stage continued (bill to uphold the proportionality of political party representation in Parliament, preventing waka-jumping)
11, Telecommunications (New Regulatory Framework) Amendment Bill, second reading (report of the Economic Development, Science & Innovation Committee presented 4 May)
13, Conservation (Indigenous Freshwater Fish) Amendment Bill, first reading (introduced 9 August)
17, Courts Matters Bill, committee stage
18, Tribunals Powers & Procedures Legislation Bill, committee stage
20, Residential Tenancies Amendment Bill (No 2), second reading (report of the Governance & Administration Committee presented 16 April)
21, Financial Services Legislation Amendment Bill, second reading (report of the Economic Development, Science & Innovation Committee presented 31 July)
26, Iwi & Hapu of Te Rohe o Te Wairoa Claims Settlement Bill, committee stage
27, Ngati Tuwharetoa Claims Settlement Bill, committee stage
28, Ngai Te Rangi & Nga Potiki Claims Settlement Bill, second reading (report of the Maori Affairs Committee presented 21 November 2016)
29, Tauranga Moana Iwi Collective Redress & Nga Hapu o Ngati Ranginui Claims Settlement Bill, second reading (report of the Maori Affairs Committee presented 3 March 2017)
32, Local Government Act 2002 Amendment Bill (No 2), committee stage (to enable improved service delivery & infrastructure provision arrangements at the local government level)
34, Kermadec Ocean Sanctuary Bill, second reading (report of the Local Government & Environment Committee presented 22 July 2016; bill title change recommended)

Click the email tab – [email protected].

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Bayleys confirms Knight Frank NZ acquisition in strategic partnership with international consultancy

Bayleys Realty Group Ltd has confirmed its acquisition of the Knight Frank property consultancy operations in New Zealand, as part of a strategic partnership with the international agency.

Knight Frank agents moved to Bayleys in June, although some have gone to other agencies, including industrial specialists David Arlidge & Damon Wyllie, who joined Savills’ Auckland industrial sales & leasing team.

Mike Bayley.

Bayley Corp Ltd managing director Mike Bayley said yesterday: “Gaining extensive exposure to international markets for our clients across the commercial, residential, rural & property services sectors is one of the most important elements in this partnership with Knight Frank, which has a footprint in 60 markets worldwide. Knight Frank is the world’s largest privately owned international property consultancy.

“Similarly, international clients from the Knight Frank network looking to purchase or lease real estate assets in New Zealand would be drawn to Bayleys’ full suite of listings & services.”

He said the partnership would significantly strengthen Bayleys’ property management services & advisory capabilities, particularly in Christchurch, and the valuations team had also more than doubled in size: “This transaction has catapulted Bayleys to number one position as a full-service commercial & industrial real estate agency in Canterbury.

“The essence of the partnership is that Bayleys will continue its New Zealand legacy, retaining its homegrown Kiwi ownership & operations while enhancing its international presence through the relationship with Knight Frank’s global business.”

Bayleys’ national commercial & industrial director, Ryan Johnson, said central to the transition in Christchurch was the relocation & unification of the commercial & industrial teams to new purpose-built premises.

Knight Frank LLP senior partner & group chair Alistair Elliott said the company sought to expand its presence around the world through partnerships with the leading local players.

Mr Bayley said the private ownership structure of both Bayleys & Knight Frank would enable the 2 entities to evolve their entrepreneurial & innovative approach far more quickly than their internationally owned & publicly listed real estate agency competitors.

Bayleys Corp is still majority family-owned. Direct Capital Investments Ltd acquired a 31% stake in the company in 2010 and Direct Capital director Ross George joined the Bayleys board.

Attribution: Bayleys release.

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Fitch sees house price slump slowing Australian credit growth

A Fitch research report out this week says the ratings business expects Australian credit growth to weaken as house prices continue to slump.

The research, by 2 Fitch Ratings Inc affiliates, Business Monitor International Ltd & Fitch Solutions Group Ltd, concludes: The ongoing slump in Australian house prices does not bode well for the outlook for the banking sector over the coming quarters as credit growth weakens. This will be compounded by the low interest rate environment & increased oversight by regulators.”

The Fitch researchers expect Australian credit growth to slow to 4.0% in 2018 & 3.5% in 2019.

The graph below, based on Reserve Bank of Australia numbers, shows the percentage change compared to a year earlier:

Link:
Fitch Solutions, 8 August 2018: Australian housing market downturn a major headwind for banks

Attribution: Fitch article.

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MBIE opens consultation on acceptable solutions

The Ministry of Business, Innovation & Employment (MBIE) opened consultation on Wednesday on proposals to amend a number of acceptable solutions & verification methods, and to revoke the simple house acceptable solution SH/AS1. The consultation period closes on Friday 21 September.

MBIE said in a release the changes were intended to update the documents to reflect the latest knowledge & current building practices, and also make editorial changes for clarity.

Amendments are proposed to the following documents:

  • Clause B1 Structure: B1/VM1
  • Clause B2 Durability: B2/AS1
  • Clause E2 External Moisture: E2/VM1, E2/AS1
  • Clause G12 Water Supplies: G12/VM1, G12/AS1, G12/AS2
  • Clause G13 Foul Water: G13/AS1, G13/VM2, G13/AS2, G13/AS3

Revoking Simple House:

On revoking the simple house acceptable solution SH/AS1, MBIE said: “SH/AS1 is now 8 years old and is no longer fit for purpose. It has not been updated in a number of years, meaning current knowledge & practices are not reflected, and it is inconsistent with other acceptable solutions.

“Anecdotal evidence is that few architects & designers refer to SH/AS1 because of its limitations on floor & roof shapes. SH/AS1 does not contain any information that is not available elsewhere in acceptable solutions or New Zealand Standards.

Link:
Full proposals & consultation MBIE corporate website

Attribution: MBIE release.

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Barfoot’s sees slowdown in residential rent rises

Barfoot & Thompson said on Wednesday the cost of renting a home in Auckland was rising at the slowest pace in years.

The real estate agency manages nearly 16,000 rental properties and said its quarterly review of weekly rent prices showed the downward trend in the first 2 quarters of 2018 followed a period of steady rises of about 4.3%/quarter throughout 2017, compared to the same quarter a year earlier, and increases of 5% or more during 2015 & 2016.

Director Kiri Barfoot said over 6000 of the rentals the company manages have 3 bedrooms, and it uses them as a standard example: “Renting a typical 3-bedroom home in Auckland between April & June this year cost 3.5% or $19 more/week than it did during the same period in 2017.

“This is the smallest percentage increase in weekly rents that we have observed in at least the last 2 years and is also the first time the average increase has dropped below the $20/week mark.

“This time last year, the average increase in weekly rent on a 3-bedroom home was more like $22, and in 2016 it was as high as $24.

“We are likely seeing the beginning of a ‘new normal’ in rental price trends as landlords strike a fine balance in their pricing in the face of rising operating & compliance costs.”

The average weekly rent for all property sizes is edging downwards in keeping with the three-bedroom example, up 4.0% on the same period last year to $559. This compares to recent year-on-year quarterly increases of between 4.4% and 4.8%.

One-bedroom properties bucked the trend, with continued pressure on weekly rents pushing the June quarter increase up 4.6% over the June 2017 quarter. Properties of other sizes moved in a band between 3.4% & 3.9%.

West Auckland was the only where rent rises exceeded 5%, which Ms Barfoot said reflected the growing popularity of the area among renters.

Average weekly rent, change from Q2 2017 to Q2 2018:

Attribution: Barfoot & Thompson release.

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Pt England house & Landings apartment sell after heavy bidding

Heavy bidding saw a Pt England house and a leasehold apartment in The Landings at Quay Park (pictured) sold at Ray White City Apartments’ auction today. An Aucklander apartment was passed in, also after heavy bidding.

Bidding on the house at Pt England opened at $900,000 and finished with a sale at $1.4 million.

The Landings property was a more complicated proposition. It was taken to market by the liquidator of NZHB Properties Ltd, Brenton Hunt (Insolvency Matters Ltd, Christchurch), with a number of clauses relating to vendor liability crossed out.

NZHB, formerly NZ Home Bonds Ltd (director Peter Judkins, of Christchurch) went into liquidation on 5 June.

Bidding on the 8th floor apartment opened at $100,000 and escalated quickly. It sold for $350,000. Auctioneer Ted Ingram said the Landings had recently received a council code compliance certificate after a big remediation project. Next up for owners, however, is negotiation of the 7-yearly review of the Ngati Whatua o Orakei Trust Board ground lease, which came up for renewal on 1 August.

CBD

Learning Quarter

The Aucklander, 25 Rutland St, unit 7D:
Features: 27m² studio
Outgoings: rates $1130/year including gst; body corp levy $3644/year
Income assessment: $400-420/week furnished
Outcome: passed in at $250,000
Agents: Dusan Valenta & Jasmine Chote

Quay Park

The Landings, 8 Ronayne St, unit 811:
Features: leasehold, 71m², 3 bedrooms, 2 bathrooms, parking space, code compliance certificate issued for remediation works
Outgoings: rates $1357/year including gst; body corp levy $10,431/year ($5685 operational levy, $4746/year ground rent); the ground lease review began on 1 August
Income assessment: $640/week
Outcome: sold for $350,000 by the liquidator of the owner, NZHB Properties Ltd; conditions removed from the sale contract included vendor default, late settlement or failure to give possession, vendor warranties & undertakings
Agents: Mitch Agnew & Ryan Bridgman

Isthmus east

Pt England

The house at 5 Riki Rd, Pt England.

5 Riki Rd:
Features: 812m² section, 127m² 3-bedroom house, garage
Outgoings: rates $2841/year including gst
Outcome: sold for $1.4 million
Agent: Adam Pearce

Attribution: Auction.

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New Lynn commercial & Harvard apartment passed in

A commercial building in New Lynn and a Harvard apartment in the city centre were both passed in at Barfoot & Thompson’s auction today.

The commercial unit attracted only 2 bids, but there were multiple bids for the apartment.

Apartment

CBD

Victoria Quarter

Harvard, 147 Hobson St, unit 1F:
Features: 38m², 2 bedrooms
Outgoings: body corp levy $4172/year
Income assessment: $560/week
Outcome: passed in at $303,000
Agent: Stephen & Leo Shin

Commercial

North-west

New Lynn

14 Delta Avenue:
Features: 202m² site, 320m² commercial building, 2 storeys, 3 long-term tenancies
Rent: $93,600/year + gst
Outcome: passed in at $1.35 million + gst
Agent: Nick Wilson

Attribution: Auction.

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Reserve Bank holds, projects low cashrate into 2020

The Reserve Bank kept the official cashrate at 1.75% today, and governor Adrian Orr projected that it would stay at that level into 2020.

That’s longer than the bank projected in its May statement. Also, it doesn’t mean a rate rise at the end of that period: “The direction of our next official cashrate move could be up or down,” Mr Orr said.

The bank governor’s view contrasted with recent business survey predictions of a slowing economy, although he hedged his bets, acknowledging that low business confidence can affect employment & investment decisions.

The bank analysis

“While recent economic growth has moderated, we expect it to pick up pace over the rest of this year and be maintained through 2019.

“Robust global growth & a lower $NZ exchange rate will support export earnings. At home, capacity & labour constraints promote business investment, supported by low interest rates. Government spending & investment is also set to rise, while residential construction & household spending remain solid.

“The labour market has tightened over the past year and employment is roughly around its maximum sustainable level. We expect the unemployment rate to decline modestly from its current level.

“There are welcome early signs of core inflation rising. Inflation will increase towards 2%t over the projection period as capacity pressures bite. This path may be bumpy, however, with one-off price changes from global oil prices, a lower exchange rate and announced petrol excise tax rises expected. We will look through this volatility as appropriate, and only respond to any persistent movements in inflation.

“Risks remain to our central forecast. The recent moderation in growth could last longer. Low business confidence can affect employment & investment decisions.

“Conversely, there is a chance that inflation could increase faster if cost pressures can pass through into higher prices and impact inflation expectations.

“We will keep the official cashrate at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low & stable inflation.”

Link:
August 2018 Monetary policy statement (PDF 1.69 MB)

Attribution: Bank release.

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2 apartments auctioned, no bid

Both apartments auctioned at Bayleys on Tuesday were passed in, neither receiving a bid.

CBD

Learning Quarter

2 St Martins Lane, unit 2C:
Features: 3 bedrooms, 2 living rooms, 2 bathrooms, 2 parking spaces
Outcome: no bid
Agents: Trent Quinton & Luke McCaw

Uptown

Parklane, 68 Greys Avenue, unit 3E:
Features: 2 bedrooms, 2 bathrooms, 4m stud, secure parking space, storage locker
Outcome: no bid
Agents: Julie Quinton, Diane Jackson & Ellis Prince

Attribution: Auction documents.

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One sells at 5%, another at hefty premium in Total Property auction

5 of the 8 properties auctioned in Bayleys’ Total Property 5 auction in Auckland today sold under the hammer, and a sixth sold a couple of hours later at a hefty premium above the last bid.

The auctions for 3 other properties were postponed (but they’re listed below).

Most activity was for a retail unit in an Apollo Drive, Rosedale, development on the North Shore (pictured).

Bidding opened at $750,000, equating to a 6.6% yield, it went on the market at $910,000, equating to 5.4%, and after a series of small raises by 3 bidders it sold for $1000 more than an exact 5% yield – the strongest return of the day.

CBD

Queen St

Mid-City Centre, 239 Queen St, basement unit B:
Features: 600m²,
Rent: $168,000/year net + gst from pool hall operator, 8-year lease from March 2018, rent increases 2%/year
Outcome: auction postponed
Agents: Nicolas Ching & James Chan

Isthmus east

Otahuhu

35B Saleyards Rd:
Features: 994m² site, 426m² floor area, 4 light industrial units, 3 tenants, all on 2-year leases
Rent: $64,774/year net + gst
Outcome: sold for $1.031 million at a 6.3% yield
Agents: Tony Chaudhary & Nelson Raines

Penrose

14 Greenpark Rd:
Features: 1627m² site, 1451m² warehouse, seismic rating 71%, head office for Momotea restaurant group, plus apartment
Rent: $201,141/year net + gst, lease expiring in 2035
Outcome: auction postponed
Agent: Millie Liang

North-east

Rosedale

56 Apollo Drive, unit 6:
Features: 90m² corner café leased to Duck Duck Goose in 13-unit retail development by Kea Property Group
Rent: $49,500/year net + gst + outgoings from 6-year lease + renewals
Outcome: sold for $991,000 at a 4.995% yield
Agents: Laurie Burt & Eddie Zhong

12 Parkhead Place, unit B:
Features: 627.4m², warehouse with 3 roller doors, offices & amenities at both ends, 12 parking spaces
Outcome: sold with vacant possession for $1.945 million
Agents: Matt Mimmack & Laurie Burt

Wairau Valley

Wairau Junction, 160 Wairau Rd, unit 5:
Features: 59m² retail, tenant Spice Cuisine on 10-year lease from 2013
Rent: $25,000/year net + gst
Outcome: sold for $415,000 at a 6% yield
Agents: Matt Lee & Terry Kim

North-west

Te Atatu Peninsula

570 Te Atatu Rd:
Features: 1229m² site, 4 separate shops, rear access
Rent: $85,093/year net + gst
Outcome: auction postponed
Agents: Scott Kirk & James Were

South

Manukau

533 Great South Rd, unit H:
Features: vacant 1020m² standalone light industrial building, offices & amenities, 11 parking spaces
Outcome: no bid
Agents: Alex McNeil & Karl Price

Manurewa

25 Station Rd:
Features: 344m² site, 550m² building area, 4 separate tenancies on 2 floors, B grade seismic rating, roof replaced 2013
Rent: $71,830/year net + gst
Outcome: sold for $1.25 million at a 5.75% yield
Agents: Dave Stanley & Shane Snijder

Papakura

13 Vernon St:
Features: vacant 2071m² business mixed use site, 573m² floor area, high stud workshop across the rear boundary, lower stud shed at roadfront
Outcome: passed in at $1.3 million, sold within 2 hours for $1.75 million
Agents: Piyush Kumar & Peter Migounoff

Pukekohe

30 Franklin Rd:
Features: vacant 1161m² site zoned business mixed use, 827m² floor area, plans for apartment development available
Outcome: no bid
Agents: Shane Snijder, Scott Penney & Virginia Zhou

Attribution: Auction.

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Unitary plan already steering Auckland housing toward intensification, says council economist

Less than 2 years after Auckland Council’s zone-changing unitary plan started to become operative, council chief economist David Norman concludes that it’s been a major cause of housing intensification.

On the other side of the equation – which most on the council worried about as it wrote a plan encouraging more brownfield redevelopment & less new greenfield development – the urban fringes have taken a lower share of new housing.

The third important factor in the change of housing impetus is that intensification has spread through suburbia.

And the fourth is that developers have paid close attention to transport routes, especially rapid transit stops.

Image above: Auckland Council chief economist David Norman presenting to the council planning committee meeting at the Orakei marae.

The map below: The red dots represent intensification points around the Auckland region and the purple patches represent intensification along rapid transit corridors.

Mr Norman released a report on the unitary plan’s impacts on residential development at Auckland Council’s planning committee meeting yesterday – held at the Orakei marae – and spent over an hour answering questions from the committee about it.

The one councillor who would certainly have questioned Mr Norman’s view was Dick Quax, who died of cancer at the end of May, aged 70, after long advocating the removal of the rural:urban boundary and questioning intensification as a housing solution. The election for his replacement closes on 13 September.

Yesterday’s quizzing of the economist was more about the detail, not about the politics of greenfield versus intensifying use of the existing urban footprint.

The unitary plan became largely operative in November 2016, and the council now expects it could be fully operative next year, once the remaining 13 appeals are settled.

The changing market shares

Mr Norman said in his report it took about 9 months to begin to see the plan affecting what & where new dwellings were consented.

“In the 10 months since new dwelling consents began to surge in August 2017, total dwellings consented are up 27% compared to a year earlier. Almost all of the growth in consents has been in brownfield (existing urban) areas, reversing the trend toward more greenfield development over the previous 7 years.

“More intensive typologies, specifically apartments & terraced/townhouses, have grown to account for 54% of all new dwellings consented, compared to 37% 2 years ago. A disproportionate share of this denser development is around the rapid transit network.

Mr Norman said his analysis “provides an antidote to the view that relaxing development restrictions on the fringes of the urban area is necessarily the best way to reduce the housing shortage. People by & large prefer to live closer to jobs, infrastructure that works, public transport, schools, shops & other amenities. As a result, developers are showing a preference for delivering development in brownfield areas.

“Land on the fringes is significantly cheaper. But once the lack &/or value of infrastructure and proximity to amenities is accounted for, the market is displaying a strong preference for brownfield development.”

The day most of the unitary plan became operative, it up-zoned thousands of brownfield (existing urban) properties.

“Altogether, the plan provided capacity for up to one million new dwellings although, at the time, only an estimated 422,000 were deemed to be commercially feasible for development. This feasible growth was anticipated to be spread across brown & greenfield areas in a roughly 2:1 ratio.”

The chief economist’s unit at the council had estimated an upturn in new residential building consents would begin around April or May 2017, but this didn’t start until August. Since then, growth has been strong.

However, Mr Norman said little information was available about the effects of the plan on development patterns: “This report provides information to support future discussions & decisions about important issues such as whether to remove or relax the rural:urban boundary.”

How does he know there’s been a change in development emphasis?

“Building consents for new dwellings grew remarkably steadily from 2012 through to April 2016. This pattern broke, and growth plateaued, 6 months before the plan became operative in part. Anecdote suggested that many investors had bought brownfield land in advance of the plan becoming operative and were waiting to lodge consents for more intensive development once the plan was operative.

“During the period from November 2016 to July 2017, the first few months of the plan being operative, consent growth was even weaker, against the backdrop of a housing shortage approaching 40,000 in Auckland at the time. The data indicates that this was because developers were still making plans for more intensive development.

“Residential construction began to surge in August 2017. The number of new dwellings consented in the 10 months to May 2018 is up 27% over the same 10 months the year before, and annual consents were only 5% below the all-time peak in June 2004. This annual total is despite a much tighter 2005 Building Code regulatory regime & building consent authorities’ response to the leaky buildings crisis.

“There is significant evidence to suggest the sudden resurgence in consenting activity is the result of the plan beginning to work:

  1. Brownfield areas dominate consents growth: 90% of all growth in new dwellings consented in the 10 months to May 2018 (since the upturn began in August 2017) is in brownfield areas where the plan delivered the bulk of potential for greater development
  2. The trend toward green and away from brownfield growth has been reversed: The share of total new dwellings consented in brownfield areas in the 10 months since August 2017 has grown from 62% to 69%. This has reversed a trend of declining brownfield development as a share of building consents over the previous 7 years
  3. More intensive building typologies enabled by the plan are being adopted: Terraced houses & apartments were 54% of new dwellings consented in the 10 months to May 2018. In the 10 months to May 2016 (ie, the comparator 10-month period before the plan was passed), it was just 37%
  4. In the urban areas, the desired compact city is emerging: In the urban area, around 66% of new dwellings are multi-units, precisely what the plan aimed to deliver.

Further, Mr Norman said, “a disproportionately large number of dwellings are being consented in rapid transit network catchment areas – defined as living within 1500m of a train station or northern busway bus stop. This highlights that people value rapid transit access, and that development enabled by the plan is responding:

  1. The share of multi-unit dwellings consented in rapid transit network areas is 16 times higher than the catchment’s share of Auckland’s land area. The rapid transit network catchment covers only 2.6% of Auckland’s land area, but accounts for 42% of all multi-unit dwellings consented in the last 10 months
  2. 11% of standalone homes were consented in rapid transit network catchments. This is 4.3 times more than the catchment’s share of land area
  3. 81% of all dwellings consented in rapid transit network catchments in the last year were multi-unit, helping to deliver the intensification that characterises transit-oriented development
  4. Overall, 40% of all dwellings consented in the urban area were in the rapid transit network catchments, even though the catchments account for only a quarter of Auckland’s urban area.

Mr Norman said this analysis highlighted that people by & large prefer to live closer to jobs, infrastructure that works, public transport, schools, shops & other amenities. As a result, developers had revealed a preference for delivering development in brownfield areas.

“These findings provide evidence that counter the view that relaxing development restrictions on the fringes of the region, where few amenities exist, is the best way to reduce the housing shortfall. Land on the fringes is cheaper. But once the lack &/or value of infrastructure & geographic proximity to amenities is accounted for, the market is displaying a strong preference for brownfield development.”

Mr Norman said the central city was still the main target for developing apartments, but they were also becoming more common in the Albert-Eden ward and just across the harbour bridge in Takapuna & Devonport.

The exception was the Upper Harbour ward, where all 3 types of development were occurring. That ward includes Hobsonville, where all new housing is more intensive than the historical norms, including standalone homes.

Finally, there are changes in the south: “There are relatively large numbers of multi-unit dwellings being consented in the southern isthmus & southern local board areas. This suggests increased delivery of typologies in areas with larger Maori populations. Multi-unit developments are often cheaper on a per-unit basis than standalone housing, which may provide greater access to warm, dry modern housing for Maori in those areas.”

Another statistic, this one relating to the shortage of housing:

“In the period from April 2016-August 2017 we only saw 7.5% total growth in consents – 6%/year. What we’re seeing since then, in the 10 months to May 2018, is a 27% increase. Code compliance certificates are up 30% over that time period.

“We’re now generating code compliance certificates at a faster rate of increase than building consents, which means we’re catching up.”

Councillors’ questions

Cllr John Watson said intensification was one side of the equation, the other was bringing the price down: “Prices haven’t come down, they’ve probably gone up.”

Mr Norman: “A number of things colluded. We saw loan:value restrictions on investors. Investors are actually still in the market, but it’s largescale investors. Recent date shows foreign investors are still involved.”

At the same time as constraints were introduced, prices peaked in Auckland: “These 3 factors show they have played a part in decreasing prices. You also face the construction capacity constraints, which mean the cost of construction is going up 6-7%/year. About 4-5 floors, the cost is $6-7000/m² against $2500/m² for a standalone home.

“What is encouraging is house prices have not continued to accelerate, and I think the unitary plan is an important factor in that.”

Mr Norman said one factor affecting the provision of new homes – the time it takes to build – was much different because of the switch to multi-units: “Typically it was 6-9 months, a multi-unit can be 18 months.”

The value of special housing areas

Cllr Wayne Walker questioned the brief era of special housing areas introduced by former housing minister Nick Smith: “It dramatically escalated the value of land, sold & onsold by people who weren’t really interested in building on it. It’s in a situation where it’s not generating any housing and has escalated the value of neighbouring land.”

Mr Norman: “My personal view is that we probably didn’t get as much development out of special housing areas as we thought we’d see. The intent was around accelerating resource consent applications, but if I were to do it again, I’d require them to build in a certain time.

“What is different about what I’m talking about today [the widespread intensification], this is not land where you’ve had to get a private plan change request. This is a broad plan that affects the entire city, it immediately creates competition. Why should I pay this amount when I can get land cheaper 2 blocks over?

“What makes property valuable? You talk about the rural:urban boundary. I’ve seen very little evidence that accounts for land price differences inside & outside the rural:urban boundary. What we do know is that infrastructure makes it liveable [inside the boundary] and people pay for that.

“I’m far less convinced that we’ve been in a speculative bubble. We’ve had a huge increase in population and prices go up, helped by low interest rates. I think that is a factor.”

State of the construction sector

Mr Norman had some interesting observations on the calamity of the moment, the collapse of one apartment builder, Ebert Construction Ltd, into receivership and the questions being raised about the state of the vertical construction sector.

Mr Norman said he worked in the construction sector for several years, including 2 years as BRANZ (Building Research Association) senior economist, and built his own house. On the players in construction, he said: “These are businesses, like in every other sector, sometimes they make good choices, sometimes they don’t. It is not my view that it’s central government’s role to hold the hand of business.”

Taking a longer-term view, he said it shouldn’t be about keeping spending down, and the solution shouldn’t rest solely with the Government. The sector should use the spotlight on it as an opportunity to improve project management: “We are not talking about victims here.”

Nimby protests versus over-dominating structures

Cllr Chris Fletcher raised a specific issue which she suspected might be a more common anomaly in the unitary plan – the redevelopment of a former nurses’ home on Banff Avenue, Epsom, by new owner Housing NZ. She said the street had 40 bungalows, a church & a small church school. Understandably, she said, Housing NZ “are going to go for maximum yield”.

Cllr Fletcher said the neighbours would have been happy with 3-storey development, but Housing NZ intended to build to 5 storeys. Intensification was “a wonderful trend – but nor do I want to see it at any cost, and I want to see the continuing public support for the process.

“But if we have an anomaly, what is the route we take? I don’t believe it’s just nimbyism, they’re happy to see 3 storeys but not 5 storeys in a 3-storey street.”

This was a question for council plans & places general manager John Duguid, who thought the specific case was “probably long past the point where we can do anything. In other cases I certainly invite councillors & others to bring them to my notice and we can respond.”

When might prices fall?

Cllr Fa’anana Efeso Collins raised a question which is on the other side of the affordability equation from the clamour for an urgent increase in supply: “At what point – or what are the conditions – that will lead to a fall in house prices? Surely at some point there must be a fall in house prices.

Mr Norman: “Short of an economic meltdown that I am not forecasting, I do not see a reason why house prices should fall immediately or in the short term. I do think we will see 2 things. Firstly, why not a fall? The basics of supply & demand, we haven’t had the shortfall. You’ve got this floor propping up prices, that’s not going to disappear any time soon.

“The cost/m² is a lot higher in apartments. We are seeing a subtle change in typology. Over the last 5 years the average dwelling size has fallen from 210m² to 172m², a 38% reduction, and that’s because of the switch in typology.

“100m², we were able to do that before and live quite comfortably. A shortfall this size [which he estimated at about 45,000 homes], there is no incentive for anyone to build cheaper – why would you leave money on the table?”

Mr Norman’s second point was that a focus on building more expensive homes for greater profit ought to open up a market for different types of housing: “If the market would only deliver houses at $850-900,000, we’re potentially opening up a different type of housing – you don’t want a second living room, you just want to be warm & dry.”

Cllr Collins: “I accept the position but I think we have to accept there are people who will never attain that dream.”

Catering for large families

Cllr Desley Simpson asked what was being done to provide houses for large families, “given we are the biggest Polynesian city in the world.”

Mr Norman: “The way I estimate my housing shortfall is to calculate the number of residents in a household. Households are shrinking in Auckland and we’re seeing the number of people/household increasing, that’s because of our demographic input. So we’re very aware of the fact we are increasing housing and it affects some communities more than others.

“We’re also seeing it in terms of the typology. Our standalone homes are too large at an average 230m², but it is the way people are choosing to live.”

However, he had seen 5-6 bedroom houses where people were banding together to form bigger households.

Links:
Chief economist’s report to planning committee, 7 August 2018: 14, Impacts of the unitary plan on residential development   
Live stream of David Norman at planning committee, 7 August 2018

Attribution: Norman report, committee meeting.

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Updated: Steel & Tube seeks $80.9 million from placement & rights issue, updates guidance

Published 7 August 2018, updated 8 August 2018:
Update: The placement was completed overnight, with the full $20.8 million raised.

Steel & Tube Holdings Ltd announced 2 capital issues on Tuesday to raise $80.9 million, and produced slightly more positive guidance on its financial results for the year that ended on 30 June.

Chief executive Mark Malpass said the company was recapitalising its balance sheet to allow it to execute its business transformation initiatives and achieve its longer-term strategic objectives.

The placement is intended to raise $20.8 million at $1.15/share. It will be followed by a fully underwritten pro rata 1:1.9 rights offer at $1.05/share.

This represents a 28.1% discount to the closing price on the NZX on Monday, and an 18.3% discount to the theoretical ex-rights price of $1.28/share, after the placement & rights offer, based on the pre-announcement close of $1.46.

In year-end guidance based on unaudited management accounts, the company said it had reduced its ebit (earnings before interest & tax) loss projection from $38 million to $36.2 million and expected normalised ebit of $16.5 million, compared to $16 million announced in the 23 May guidance statement.

Guidance for 2019 is for ebit of $25 million, rising to $35-40 million in the next 3 years.

Company chair Susan Paterson said: “We remain deeply committed to rebuilding Steel & Tube as a leading provider of steel products & solutions in New Zealand. We have worked hard to address legacy issues, and early benefits from Project Strive business transformation initiatives are now being seen.

“The capital raised will be used to repay debt, strengthening our balance sheet and giving us greater flexibility to execute our strategy and deliver better value for our shareholders. In addition, we expect the capital-raising to strengthen Steel & Tube’s share register and help create liquidity which will benefit all shareholders.”

She said the capital-raising would significantly reduce Steel & Tube’s gearing, and the company was resetting its capital structure policy to operate with net debt of less than 2.0 times normalised ebitda (earnings before interest, tax, depreciation & amortisation).

While Steel & Tube won’t pay a final dividend for the 2018 financial year, Ms Paterson said the company expected to resume dividend payments in 2019, consistent with its stated policy of paying 60-80% of normalised net profit after tax.

The capital-raising

Steel & Tube shares went into a trading halt today for the placement, expected to be completed in the morning.

The rights offer will open on Friday 17 August and close on Monday 3 September. There will be a bookbuild for any shortfall on Wednesday 5 September.

Steel & Tube is one of New Zealand’s largest providers of steel products & solutions. Its 2 business divisions, distribution & infrastructure, – operate in the construction, manufacturing & rural sectors.

Link:
Steel & Tube presentations

Earlier stories:
27 July 2018: Lawyer says interest in class action grows as steel mesh sentence awaited
24 June, 2 July 2018: Updated: Steel & Tube agrees second sale & leaseback
23 May 2018: Review puts Steel & Tube ebit loss at $38 million
4 May 2018: Steel & Tube puts second property up for sale & leaseback
29 November 2017: Steel & Tube owns up to mesh label & testing guilty pleas
20 November 2017: East Tamaki property sold as Steel & Tube rings in changes
21 August 2017: Steel & Tube performance dissatisfies new chair

Attribution: Company release.

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2 Manukau commercial units & 2 in Manurewa complex sell

A reconfigured warehouse unit & 2 shops in Manukau have been sold by Bayleys agents. In Manurewa, 2 unit in a retail complex have been sold in one lot, after an adjoining unit was bought on its own.

South

Manukau

132 Cavendish Drive, unit E:
Features: Mid-2000s 588m² warehouse unit, renovated & reconfigured to provide 2 levels of showroom & office space plus 12 parking spaces; leased for 8 months to Bath & Tile (NZ) Ltd from June 2018 with no rights of renewal
Rent: $100,200/year net + gst
Outcome: sold for $1.718 million at a 5.83% yield
Agents: Janak Darji, Tony Chaudhary, Amy Weng & Mike Marinkovich

597 Great South Rd, unit 4:
Features: 290m² retail premises, occupied by laundromat & cake shop, part of 9-unit complex with plenty of common parking
Rent: $101,732/year net + gst
Outcome: sold for $1.92 million at a 5.3% yield
Agents: Tony Chaudhary, Amy Weng & Janak Darji

Manurewa

6 & 6A Halver Rd:
Features: 2 retail unitseach 106m², one leased to an Indian takeaway until November 2019, the other to Tokyo Kitchen until January 2020; part of 11-unit retail complex built in 2012 on corner of Great South Rd, fronting onto large central parking area
Rent: $61,200 /year net + gst
Outcome: sold as one lot for $1.128 million at a 5.43% yield
Agent: Piyush Kumar

Attribution: Agency release.

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Tamaki reserve rationalisation up for approval

Auckland Council’s planning committee will consider a proposal tomorrow to rezone open space, primarily arising from land exchanges under the Tamaki regeneration project and under Panuku Development Auckland’s land disposal & rationalisation process.

At Tamaki, changes are proposed to the 3 reserves in the regeneration area.

Planning team leader Tony Reidy says in his report to the committee the rationale is that many of Tamaki’s parks are poorly located with respect to the built environment around them.

“For example, many parks are located behind private residential properties. These parks generally have little street frontage, small alleyway-type entrances and are bounded by high solid fences.

“The shape & topography of much of the open space restricts its usefulness for recreation activities. Many of the parks consist of sloping ground, are fragmented by creeks and are of narrow, linear shape. Many open spaces also serve a drainage function and, as a result, become boggy during wet periods, reducing access & useable space.

“There is generally an unco-ordinated approach to the provision of amenities such as playgrounds & walkways within Tamaki. The varying quality of existing assets, missing sections of path network and poor surveillance of many parks greatly reduces the recreational potential of Tamaki’s uniquely connected network of open spaces.”

Links:
Planning committee agenda, 7 August
9, Auckland unitary plan (operative in part) – proposed open space plan change Recommendation   
Attachments
Proposed open space plan change maps [published separately]   
Proposed open space plan change section 32 evaluation report [published separately]   
Panuku land disposal & rationalisation process    
Open space zoning guidelines    
10, Request to make operative private plan change 9 to the Auckland unitary plan (operative in part)
Recommendation

Attribution: Council committee agenda.

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Bob Dey Property Report diary, week 6-12 August 2018

The diary is updated weekly and lists auctions, council meetings & agendas, hearings & submissions, economic release dates, events, Parliament order paper items and securities.

Council links

All Auckland Council agendas can be reached via http://infocouncil.aucklandcouncil.govt.nz/. The council livestreams (and archives) Town Hall meetings and some other meetings. You can check those at http://councillive.aucklandcouncil.govt.nz/.

Auckland Council

As Auckland Council makes changes to its website, hearing & submission pages can be hard to find. This is the new link to the page for submissions on consent applications:

https://www.aucklandcouncil.govt.nz/have-your-say/have-your-say-notified-resource-consent/notified-resource-consent-applications-open-submissions/Pages/default.aspx

Governing body

Governing body, Thursday 23 August at 9.30am, Town Hall

Committees

Appointments, performance review & value for money committee, Thursday 2 August at 9.30am, 135 Albert St
Auckland Domain committee, Thursday 30 August at 9.30am, 135 Albert St
Audit & risk committee, Monday 27 August at 9.30am, 135 Albert St
Civil defence & emergency management committee, Wednesday 29 August at 9.30am, 135 Albert St
Community development & safety committee, Thursday 16 August at 9.30am, 135 Albert St
Environment & community committee, Tuesday 14 August at 9.30am, Town Hall
Finance & performance committee, Tuesday 21 August at 9.30am, Town Hall

Planning committee, Tuesday 7 August, powhiri at 9.30am, meeting at 10am, Orakei marae
8, Lodgement of iwi management plan for Ngati Whatua Orakei Recommendation
Attachments
Ngati Whatua Orakei iwi management plan – Te Pou o te Kahu Pakere
9, Auckland unitary plan (operative in part) – proposed open space plan change Recommendation
Attachments
Proposed open space plan change maps [published separately]
Proposed open space plan change section 32 evaluation report [published separately]
Panuku land disposal & rationalisation process
Open space zoning guidelines
10, Request to make operative private plan change 9 to the Auckland unitary plan (operative in part) Recommendation
11, Auckland unitary plan (operative in part) – update on appeals & making additional parts of the plan operative Recommendation
Attachments
List of additional unitary plan appeals resolved
12, Draft national planning standards – Auckland Council submission Recommendation
Attachments
Process for developing national planning standards
Planning standards relevant for the unitary plan
Auckland Council submission on draft national planning standards
13, Development of core targets with central government for Auckland Plan 2050 Recommendation
14, Impacts of the unitary plan on residential development Recommendation
15, Summary of planning committee information memos & briefings Recommendation
Attachments
Committee forward work programme
Schedule of August planning committee workshops [published separately]
National policy statement on urban development capacity, quarterly monitoring report June 2018 [published separately]
Memo on Environment Court decision – rural subdivision appeals (Auckland unitary plan) [published separately]
Auckland Plan refresh workshop, 26 documents [published separately]
Transpower’s Emerging Strategy for Auckland workshop minutes [published separately]

Regulatory committee, Thursday 9 August at 9.30am, 135 Albert St:
8, Request to appoint hearing commissioners for plan change 12 (Hobsonville corridor precinct) to the Auckland unitary plan (operative in part) Recommendation
9, Freedom camping bylaw development, update Recommendation
10, Regulatory committee summary of information items Recommendation
Attachments
Regionwide appeals report & register
Committee forward work programme
Freedom camping bylaw development update memo [published separately]

Strategic procurement committee, Wednesday 8 August at 9.30am, 135 Albert St:
8, Information report Recommendation
Attachments
Committee forward work programme
9, Information report – group source procurement update Recommendation
Attachments
Group source procurement, update results
10, Westgate multipurpose facility (integrated library & community centre) construction, status update Recommendation
C1, confidential: Westgate multipurpose facility (integrated library & community centre) construction, status update

Boards, forums & panels:

Auckland City Centre Advisory Board, Wednesday 22 August at 3pm, 135 Albert St
Hauraki Gulf Forum, Monday 20 August at 1pm, Town Hall

Hearings:

Find hearings: https://www.aucklandcouncil.govt.nz/have-your-say/hearings/find-hearing/Pages/find-resource-consent-hearing.aspx

Birkdale, 33 Salisbury Rd, application by Horizon Resources Ltd (Wayne Wright) for 2-level early childcare centre for 114 children; hearing Wednesday 15 August at 9.30am, Takapuna, ex-council chamber, 1 The Strand

Flat Bush, 508 Chapel Rd, application by 508 Chapel Road Partnership to create a childcare centre for 60 children; hearing Monday 27 August at 9.30am, Manukau Civic Building, 31-33 Manukau Station Rd

Herne Bay, 113 Jervois Rd, application by Artifact Property Ltd (Liam Joyce) to demolish the buildings onsite and construct a 5-storey mixed-use building with ground-floor retail unit & 9 apartments one residential unit at ground floor and 2 on every upper floor, parking for 16 cars on 3 half-level basement levels; hearing Monday 3 September at 9.30am, Town Hall

Hillsborough, 2 Waikowhai Rd, application by Gong Yu to create 3 new dwellings and subdivide around them & the existing dwelling; hearing Thursday 13 September at 9.30am, Town Hall

Ponsonby, 94 Shelly Beach Rd, application by Auckland Council Healthy Waters Unit to construct wastewater & stormwater infrastructure to deliver water quality improvements in St Marys Bay & Masefield Beach: to install via tunnelling and operate a new underground sewage conveyance & storage pipeline connecting from New St/London St through to Pt Erin Park; a weir structure, pump station & odour control unit within Pt Erin Park; a smaller weir structure & odour control within St Marys Rd park; and a 450m outfall into the channel from the vicinity of Masefield Beach; hearing Tuesday-Friday 18-21 September at 9.30am, Town Hall

Regionwide, stormwater diversion, application by Auckland Council Healthy Waters Unit, hearing Tuesday-Friday 20-23 November at 9.30am, Town Hall

Westhaven Marina, application by Panuku Development Auckland to extend the north-western breakwater & causeway; hearing Tuesday-Thursday 23-25 October at 9.30am, Town Hall

Submissions:

Beachlands, 17a Bell Rd, application by Signature Building Ltd (Gavin Hunt) to establish & operate a childcare facility for 105 children & 17 staff, removing the existing dwelling & garage and constructing a purpose-built building comprising 678m² of floor area, 564m² of associated outdoor play area to the east & south, and 19 onsite parking spaces + manoeuvring area at the front; submissions close Wednesday 15 August

Manukau Central, 17 Lambie Drive, unit 1, application by Te Whare Wananga o Awanuiarangi to establish & operate a tertiary education facility within an existing building; limited notification, submissions close Monday 6 August

Manurewa, 46 Halver Rd, limited notification application by Harsh Diwan to convert a dwelling & sleepout to a childcare centre for 60 children & 8 staff; submissions close Wednesday 15 August

Onehunga, 1A Bamfield Place, application by Auckland Council Community Facilities for resource consent to build a coastal boardwalk running from Bamfield Reserve, Onehunga, to Taylors Bay Rd Reserve, Hillsborough; submissions close Friday 17 August

Ponsonby, 10 Seymour St, limited notification of application by Craig & Kym Andersen to undertake dwelling additions & alterations, including expanding the basement level to provide a rumpus room & double garage, extending at ground level at rear & front, reconfiguring the rooms to fit the enlarged space, and constructing a new upper level; widening the driveway to provide for access from 2 internal parking spaces, re-landscaping rear of the property to include a swimming pool; submissions close Thursday 23 August

Takapuna, western stormwater network – 37 Lake View Rd, Killarney Park & the road reserve of Lake Pupuke Drive, Rangatira Avenue, Lake View Rd & Kowhai St, limited notification of application by Auckland Council Healthy Waters to replace, upgrade & extend the stormwater network in Takapuna; the proposal has been divided into 2 sections – the western & eastern networks; submissions close Tuesday 28 August

Auctions:

Barfoot & Thompson, residential Tuesday-Friday at 10am & 1.30pm, commercial Thursday 9 August at 10am; 34 Shortland St
Bayleys, commercial, Total Property 5, Wednesday 8 August at 11am; residential, Wednesdays at 2pm, Bayleys House, Wynyard Quarter, 30 Gaunt St
City Sales, apartments, Wednesday 15 August at 12.30pm, 445 Karangahape Rd
Colliers, commercial, Wednesday 15 August at 11am, Takapuna, 129 Hurstmere Rd
NAI Harcourts, commercial, Thursday 23 August at 1pm, Takapuna, 128 Hurstmere Rd
Ray White City Apartments, Thursdays at 12.30pm, 2 Lorne St

Economy:

Accommodation survey, June, Friday 10 August
Building consents, July, Thursday 30 August
Business price indexes, June quarter, Friday 17 August
Cruise ship traveller statistics, June, Thursday 16 August
Electronic card transactions, July, Friday 10 August
Food price index, July, Monday 13 August
Labour market statistics (income), June quarter, Wednesday 15 August
Migration, international travel, July, Tuesday 21 August
Population, national estimates at 30 June, Tuesday 14 August
Ready-mixed concrete secondary production, June quarter – Infoshare tables, Thursday 9 August
Reserve Bank, official cashrate & monetary policy statement, Thursday 9 August Retail trade survey, June quarter, Wednesday 22 August
Trade – overseas merchandise, July, Friday 24 August
Transport vehicle registrations, July – Infoshare tables, Friday 17 August

Events:

NZ Institute of Building, national awards, Friday 24 August

Property Council, annual conference, Wednesday-Friday 29-31 August, Rotorua

Facilities Integrate, facilities management expo, Tuesday-Wednesday 25-26 September, ASB Showgrounds, Epsom, 217 Greenlane West

Listeds – NZ:

Argosy Property Ltd, annual meeting, Monday 6 August at 2pm, Royal NZ Yacht Squadron, Westhaven Marina
Asset Plus Ltd, annual meeting, Friday 17 August at 1pm, 80 Queen St, Deloitte Centre, Link Market Services
Fletcher Building Ltd, annual result, Wednesday 22 August
Heartland Bank Ltd, annual result, Wednesday 15 August; annual meeting, Wednesday 19 September at 10am, Waipuna Hotel & Conference Centre
Metlifecare Ltd, annual result, Monday 27 August
Metro Performance Glass Ltd, annual meeting, Friday 24 August at 10am, Ellerslie Events Centre
Oceania Healthcare Ltd, annual meeting, Tuesday 28 August at 2pm, Heritage Hotel, 35 Hobson St, Auckland
SkyCity Entertainment Group Ltd, annual result, Wednesday 8 August
Steel & Tube Holdings Ltd, annual result, Friday 31 August
Stride Property Ltd & Stride Investment Management Ltd (together Stride Property Group), annual meeting, Thursday 30 August at 11am, Pullman Hotel
Vital Healthcare Property Trust, annual result, Thursday 9 August

Parliament

Provisional order paper for Tuesday 7 August [PDF 464k]

Government orders of the day:

1, Electoral (Integrity) Amendment Bill, committee stage (bill to uphold the proportionality of political party representation in Parliament, preventing waka-jumping)
2, Tariff (PACER Plus) Amendment Bill, second reading (bill enables the application of preferential tariff rates and contains majority amendments; report of the Foreign Affairs, Defence & Trade Committee presented 6 July)
4, Overseas Investment Amendment Bill, committee stage continued
5-7, Regulatory Systems (Economic Development) Amendment Bill, Regulatory Systems (Housing) Amendment Bill & Regulatory Systems (Workforce) Amendment Bill, first reading for each (all cognate bills introduced 11 July – business committee determination)
8, Appropriation (2018/19 Estimates) Bill, third reading
9, Canterbury Earthquakes Insurance Tribunal Bill, first reading (introduced 1 August)
11, Telecommunications (New Regulatory Framework) Amendment Bill, second reading (report of the Economic Development, Science & Innovation Committee presented 4 May)
16, Courts Matters Bill, committee stage
17, Tribunals Powers & Procedures Legislation Bill, committee stage (omnibus bill with the Courts Matters Bill)
18, Residential Tenancies Amendment Bill (No 2), second reading (report of the Governance & Administration Committee presented 16 April)
19, Financial Services Legislation Amendment Bill, second reading (report of the Economic Development, Science & Innovation Committee presented 31 July)
23, Ngati Rangi Claims Settlement Bill, first reading (introduced 21 June)
24, Iwi & Hapu of Te Rohe o Te Wairoa Claims Settlement Bill, committee stage
25, Ngati Tuwharetoa Claims Settlement Bill, committee stage
26, Ngai Te Rangi & Nga Potiki Claims Settlement Bill, second reading (report of the Maori Affairs Committee presented 21 November 2016)
27, Tauranga Moana Iwi Collective Redress & Nga Hapu o Ngati Ranginui Claims Settlement Bill, second reading (report of the Maori Affairs Committee presented 3 March 2017)
30, Local Government Act 2002 Amendment Bill (No 2), committee stage
32, Kermadec Ocean Sanctuary Bill, second reading (report of the Local Government & Environment Committee presented 22 July 2016; bill title change recommended)

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