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Hancock’s PruTimber buy puts Fletcher forests back in single management

Published: 14 July 2005


The Hancock Timber Resource Group said in Boston on Tuesday it had agreed to buy Prudential Timber Investments Inc, the timberland investment management unit of Prudential Financial Inc. Terms weren’t disclosed. The deal should close in the 3rd quarter.


The deal doubles the area Hancock manages in New Zealand with a 60,000ha acquisition which puts former Fletcher Forests assets back into single management (but not single ownership).Hancock will assume management responsibility for PruTimber’s 180,000ha of timberland worth $US660 million, increasing its total assets under management by 25% to 1 million ha & $US3.1 billion.Hancock Timber president Dan Christensen said the significant increase in assets under management would provide additional economies of scale, ultimately benefiting investors. “In addition, we strengthen our property portfolio, increasing our acreage in the southern US, more than doubling our acreage in New Zealand and adding new acreage in South America.”The assets currently managed by PruTimber include nearly 95,000ha in the southern US, more than 8000ha in Hawaii and 60,000ha in New Zealand (which will take Hancock’s Australasian assets under management to more than 340,000ha). The acquisition also will mark Hancock’s entry into South America with the addition of nearly 18,000ha of timberlands in Brazil.”In a global economy, we believe that having access to timber markets around the world will provide excellent long-term opportunities for our clients,” Mr. Christensen said. Hancock Timber is a division of the Hancock Natural Resource Group Inc, an operating company of MFC Global Investment Management. That, in turn, is the institutional asset management arm of Manulife Financial Corp, based in Toronto with investment offices there and in Boston, London, Tokyo, Hong Kong & South-east Asia.


In New Zealand, Hancock Forest Management (NZ) Ltd manages 40,000ha of Central North Island plantations for Tiaki Plantations Co. Hancock bought a one-rotation forestry right over the Tarawera Forest estate from Tenon Ltd (the former Fletcher Challenge Forests) in June 2004 for $165 million. Tenon had earlier agreed the $560 million sale of the bulk of its forest assets to the Kiwi Forests consortium headed by the Tramco investment group’s Adrian Burr, Mark Wyborn, Rob Campbell & Ross Green, with partners the Ontario Teachers’ Pension Plan and Viking Global NZ Ltd (a Prudential company).


Manulife & John Hancock combined their resources in April 2004.Manulife Financial had $C350 billion ($US290 billion) under management at 31 March.


Websites: Hancock Timber Resource Group


MFC Global


Manulife Financial


 


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B&T average price $443,286 on lighter sales

Published: 12 July 2005


The average residential sale price at Auckland real estate agency Barfoot & Thompson bounced some of the way back in June towards the March & April highs after a decline in May.



The firm’s sales fell to 962 in June, down 3.2% compared to June 2004 and down 2% for the June quarter compared to the March quarter.


The average price was $443,286, up from $427,299 in May. The average in March was $468,151, in April $460,604. 14% of June sales were for $1 million-plus.


In the rental section, B&T lettings rose slightly to 637 and the average rent was steady at $336/week.


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Capacity rise puts squeeze on occupancy

Published: 12 July 2005


Occupancy rates were down in all short-term accommodation sectors in May, in combination with a general capacity rise.



The actual number of guest nights across all sectors was unchanged at 1.8 million in May 2004 & 2005, but capacity was 5% higher. Excluding caravan parks & camping grounds, capacity was 7.9% higher.


The monthly Statistics NZ accommodation survey showed a 5.2% fall in hotel occupancy to 47.4% on a 7.9% capacity gain & 0.9% increase in guest nights.


In the motel & apartment sector, occupancy fell 3.3% to 43.6% on a 2.9% capacity gain & 1.2% fall in guest nights.


The backpacker sector continued to grow, with a13.8% capacity gain, and guest nights were up 5.4% but occupancy slid 7.7% to 35.4%.


In Auckland, occupancy has been slightly down on 2004 figures every month this year. Statistics for the Auckland tourism region show the region’s occupancy climbed to 54.1% in April 2004 and stayed in the 54%-plus range for the next 7 months, before dropping back to 53.7% in December and gradually declining to 53.1% in May.


Putting that fall in context, however, is a solid rise in capacity, starting with a 2.4% increase in monthly capacity last October, reaching 4.6% in January and 5.8% in May.


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Valuit team unveils Property InDepth franchise business

Published: 10 July 2005


Valuit Asset Appraisals Ltd founder Steve Tucker & business partner Steve McNamara unveiled their new company, valuation franchiser Property InDepth Ltd, at the NZ Property Institute conference in Wellington.



The franchise model combines a fully automated business management software system with a wireless internet-based valuation report delivery solution to change the way valuation work is undertaken, presented & delivered.


Mr Tucker said research showed the valuation sector needed to embrace higher levels of technology and provide more comprehensive information in valuation reports, and the profession needed revitalising to attract younger people into the industry.


Property InDepth addressed this by restructuring & automating most business & valuation processes associated with running a valuation business, many of which valuers perform manually.


In the process the company has developed a system, including software, which Mr Tucker said made it much easier for valuers to embark on running their own business and allowed them to provide New Zealand’s fastest turnaround & most comprehensive residential property valuation reports. As a result, the system also met a demand in the real estate market for fast & comprehensive property valuations.


“Given the typical times between a valuation request & site inspection, and between inspection & report delivery, current valuers usually aren’t fast enough with their reports to allow buyers to make an offer conditional on valuation,” Mr McNamara, a registered land & buildings valuer, said.


“The Property InDepth franchise model significantly improves productivity in the industry, giving valuers more time to research the market in their territory.


“At the same time, these efficiencies create much quicker turnaround times for each valuation, allowing valuers to produce a report which is available online within a few hours of completing a site inspection, rather than days – the current industry standard.”


By contrast, under the traditional valuation model, valuers can spend a considerable amount of time on completing paperwork for an onsite property assessment. Typically, when valuers inspect a property they have to fill out a range of paper forms or dictate notes and then go back to the office to have the report typed, then re-check the report, make any corrections & get the report printed out, bound & posted.


Mr McNamara said the Property InDepth system eliminated the need for all of this paperwork as the information is recorded by a valuer on tablet laptop computers, on the spot at the valuation site.


Property InDepth’s next step is to recruit valuers to join the franchise.


Franchize Consultants (NZ) Ltd managing director & former Franchise Association chairman Win Robinson said it was gratifying that the team behind Property InDepth developed the franchise along sound, well proven principles by getting top professional assistance to correctly formulate & implement the concept.


This system uses proven business techniques adopted from Valuit, a market leader in property depreciation services for residential investors.


Mr Tucker trained at Rolle Associates Ltd then founded New Zealand’s first company specialising in depreciation apportionments for property investors, Valuit Asset Appraisals Ltd, in 1999.


Mr McNamara also worked at Rolle Associates Ltd then Darroch Associates Ltd before joining Valuit in 2000.


Franchise manager for the new company is Malcolm Macnaught.


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DTZ wins contract to manage Vodafone property interests

Published: 10 July 2005


Vodafone NZ Ltd has appointed DTZ NZ Ltd to manage its real estate interests in New Zealand, effective 1 June. (Photo: Vodafone’s new Auckland headquarters on Fanshawe St).



The contract includes the lease & financial administration of the existing national portfolios, comprising 14 commercial offices & more than 1200 radio base stations.


DTZ’s Auckland manager, Alan Roskruge, said: “Being appointed to provide such a complete property management service to Vodafone on a national scale is a testament to the expertise & experience within the DTZ property management team.


“It is also a reflection of the close working relationship DTZ has developed with Vodafone over a number of years in providing both network site acquisition and other professional property services. This was beneficial in understanding Vodafone as a partner and its culture, as well as building up trust with individual personnel within Vodafone with whom we will deal on a day-by-day basis.”


DTZ’s commercial property manager in Auckland, Andrew Potter, will be responsible for the day-to-day management of the contract. He said the appointment “reflects the continued strengthening of DTZ in the property management field”.


The contract is based on an initial term of 3 years with a 3-year right of renewal.



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Commercial property index rises strongly

Published: 10 July 2005


Most sectors on the Property Council investment performance index improved in the March quarter compared to a year ago, boosting the average return for the March year from 13.72% in 2004 to 16.74%.



The council¡¦s national director, Connal Townsend, said capital returns increased strongly, ranging from 2.32% for NZ bulk retail to 11.41% for NZ industrial. Income returns were steady at 9.37%.


The council¡¦s research chairman, Alan McMahon, said industrial was the standout sector with a total return up from 13.56% to 22.28%. Auckland industrial rose from 13.38% to 22.28%.


The capital returns on industrial property were the highest since the inception of this index.


The Wellington cbd continued to be the strongest office sector with a total return of 21.41%, while the Auckland cbd office sector continued its recent rapid improvement to record a total return of 14.42%, up from 9.64% in 2004.


Retail property dropped back for the first time in 12 months. Shopping centres returned 13.49%, bulk retail 11.9% and the combined retail category 13.55%.


18 property owners & managers contribute to the index, which is based on analysis of 282 properties worth $5 billion and covering 2.3 million mÆ’U of net lettable area.


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QV says national residential value growth 14.2% in May

Published: 10 July 2005


The national residential property market rose 14.2% in value for the June year, up from 13.5% in the year to May, says Quotable Value.



“Despite thoughts that the property market is about to enter a slowdown period, we are still seeing increasing levels of growth in property values across most areas of the country, with only Nelson (-1.3%) experiencing a decline in property values,” QV’s Blue Hancock said in a weekend release.


The biggest gain in a main centre was in Hamilton City (23.6%), closely followed by Dunedin (22.1%) & Christchurch (18.5%). Wellington rose by 8.9%, while Auckland City grew 5.7% on the back of 8.8% growth in the eastern suburbs.


Mr Hancock said further evidence of the current buoyancy in the market was reflected in the turnaround in Queenstown & Tasman property value growth. Queenstown residential properties grew 8.9%, up substantially from figures reported earlier in the year which had property values there growing at less than 2%/year, while residential property in Tasman grew 2.4%, “encouraging given that earlier in the year property values in Tasman were declining by as much as 5%.


“Although property values remain buoyant, all the indicators are pointing to a levelling out of growth in values rather than a continued increase on the current level of growth we are seeing in the market,” Mr Hancock said.


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Hellaby adds Number 1 to its shoe portfolio

Published: 28 June 2005


Hellaby Holdings Ltd has agreed to purchase Discount Shoe Warehouse Ltd, trading as Number 1 Shoe Warehouse.


Hellaby will acquire an 80% shareholding in Number 1 on 1 July and the remaining 20% on 31 August 2007.The price will be based on a multiple of Number 1’s ebit over the 4 financial years to August 2005-08, less external debt at those dates.Hellaby managing director David Houldsworth said “if Number 1 trades in line with forecasts over the next 3 years, the total consideration would be in the order of $22 million.”Number 1 is a specialist discount shoe retailer operating predominantly in a different market segment from Hellaby’s other shoe retailing interests, Hannahs & Hush Puppy. Mr Houldsworth said it was complementary and would be run as a completely separate business.


“Gerard Peterson, managing director & major shareholder of Number 1, will continue to run the business for at least the next 2 years and will remain as a consultant and director of the business for at least the next 4 years.” Number 1 has 29 stores and, with Hellaby support, intends to increase this to 40 over the next 3 years, as well as continuing the upgrade of existing smaller stores.”Number 1 has enjoyed strong new-store & same-store sales growth over the past 12 months. It is an excellent business with continued growth prospects and operates in a business area where the Hellaby Group already has a significant level of expertise,” Mr Houldsworth said.


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Bayleys sells $16 million at Total auction

Published: 23 June 2005


Bayleys Real Estate sold $16 million of properties at its Total Property auction in Auckland on Wednesday, including a suburban bank branch on a 6.6% yield.



Details:


Auckland City


Avondale, 9 St Jude St, 2 commercial buildings on a 1017m² site in a high-profile location, sold for $855,000. A combination of profile showroom space, partitioned offices & warehousing, the property was sold vacant. Sales, Colin Stewart, Central Auckland.


CBD eastern fringe, 20-30 Anzac Ave, 670m² standalone 4-level character building on 215m² site, sold for $1.85 million at a yield of 8.4%. Occupied by various tenants, the property is returning $155,240/year. Sales, Eliza Gilbertson and & Haydock, Auckland Central.


Ellerslie, 1 Ranier St, sold before auction for an undisclosed price. The commercial building is in a park-like environment on a 2276m² site, occupied by Gaze Commercial and returning net rent of $80,394/year on a 6-year lease from 2004. Sales, Sunil Bhana, Mike Houlker & David Gubb, Auckland Central.


Mt Eden, 292-310 Dominion Rd, unit K, 314m² ASB outlet at the entrance to Eden Quarter shopping centre, sold for $2 million at 6.6% yield. It’s currently producing net rent of $131,712/year from an 8-year lease to the bank from July 2000. Sales, Mark Pittaway, Manukau, & Dominic Ong, Auckland Central.


Ponsonby, 30-32 Jervois Rd, 185m² standalone 2-level building on a 306m² site, sold for $1.165 million at a 3% yield. It’s currently producing net rent of $33,933/year from a lease to Fusion Café, whose lease on 2 tenancies expires in 2006. Sales, James Chan & Quinn Ngo, Auckland Central.


Royal Oak Mall, 691 Manukau Rd, unit O, 108m² retail unit in Royal Oak Mall sold for $347,000 at a 10.2% yield.  Occupied by The Framers Guild on a 9-year lease from 1998, it’s producing net rent of $35,487/year. Sales, Sue de Jong & James Chan, Auckland Central.


Royal Oak Mall, 691 Manukau Rd, unit P, 117m² retail unit leased to Budget Eyewear (trading as OPSM), sold for $515,000 at an 8.7% yield. The property is on a 10-year lease from July 1997, returning net rent of $45,990/year. Sales, Sue de Jong & James Chan, Auckland Central.


St Lukes, 4 Western Springs Rd, modern 1025m² 2-level commercial building on a 1311m² site, sold for $2 million at a 7.5% yield. Anchor tenant the Post Primary Teachers’ Association occupies the upper floor on a lease until 2011 and Moto Systems occupies the ground floor showroom space. The property is producing net rent of $150,636/year. Sales, Dominic Ong & John O’Brien, Auckland Central.


Passed in:


Avondale, 11 St Jude St, 612m² site, redevelopment potential, passed in for $425,000. It’s leased to Avondale Japanese Parts on net rent of $22,800/year. Sales, Colin Stewart, Central Auckland.


CBD, Princes Wharf, Quay St, 98.12m² property occupied by Casa Del Oro, returning net rent of $23,227/year on a 9-year lease, passed in without a bid. Sales, Jack Downer & James Chan, Auckland Central.


Mt Albert, corner New North Rd & Lloyd Ave, character villa on a high-profile 617m² corner site producing  $33,696/year. Willow Shoes Ltd, an established tenant, has a new 3-year lease from April 2005. Passed in at $540,000. Sales, Michael Grainger, Auckland Central.


Penrose, 65 Maurice Rd, standalone 895m² building with office, warehouse & storage areas on 809m², passed in for $642,500. The building, which is partially tenanted, returns $32,670/year holding income. Sales, Cameron Melhuish & Kathryn Robinson, Auckland Central.


Royal Oak Mall, 691 Manukau Rd, unit Q, 158m² shop occupied by Souveran on a 3-year lease from March 2003, passed in for $350,000,. The unit is producing net rent of $38,800/year. Sales, Sue de Jong & James Chan, Auckland Central.


Manukau City


East Tamaki  225 Burswood Drive, 725m² showroom building close to Ti Rakau Drive, sold vacant for $1.5 million. Sales, Roy Rudolph & John Bolton, Manukau.


East Tamaki, 103 Harris Rd, units A & B, 2-title property with 2 units – 580m² & 355m² – on 1821m², sold before auction for $1.45 million. Returning net rent from Allways Manning and Toy Hire of $99,644/year, the property sold at a yield of 6.9%. Sales, John Bolton & Katie Wu, Manukau.


East Tamaki 138 Harris Rd, unit K, 183m² property on a prime corner site sold before auction for an undisclosed price. The property has a longstanding tenant, Mad About Food, on an 18-year lease from 1993, currently producing $37,345/year. Sales, John Bolton & Katie Wu, Manukau.


East Tamaki, 23 Springs Rd, unit H, 6-year-old 581m² warehouse, showroom & office building sold for $820,000 at 7.9% yield. Leased to R&A Co on a 3-year lease from February 2005, it produces net rent of $65,000/year. Sales, Roy Rudolph & Katie Wu, Manukau.


Otara, 12 Lovegrove Cres, standalone industrial property on 2040m² site close to the motorway interchange, sold for $1.73 million with vacant possession. Sales, Mike McLennan & Simon Lee, East Tamaki.


Passed in


Airport Oaks, 39 Aintree Ave, modern 5300m² warehouse & office on 8106m², passed in for $6.4 million. Tenanted by  Real Food Ltd on a 12-year lease from July 1996, the property is currently returning  net rent of $493,425/year with a rent review due in August. Sales, Peta Laery & Hayden Bryant, Manukau.


Papakura


Papakura, 69 O’Shannessey St, 348m² retail property in 2 titles on 460m² of land, sold for $505,000 at 7.5% yield. The property is leased to the Salvation Army on a 3-year lease from 2005, returning net rent of $37,700/year. Sales, Dave Stanley & Mike Ashton, Counties.


Website: Bayleys


 


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Environment Waikato stops pine harvesting, 2nd forester faces opposition, Shirley says regulator out of control

Published: 23 June 2005


Environment Waikato was roundly lambasted by Act MP Ken Shirley for declining a Crown Forestry application to harvest up to 305ha of plantation forestry at Waiuku Forest this week.


It’s not the only forest owner in this predicament: Ernslaw One Ltd faced 31 submissions opposing its application for consents so it could continue harvesting of Whangapoua Forest, got consent from Environment Waikato but still has opposition in the Environment Court. It wants a decision before Christmas.


At Waiuku, the Environment Waikato hearing committee’s decision wasn’t quite as straightforward as it at first sounded.


The company sought a land use consent to harvest pines over the next 10 years and faced opposition from the Auckland/Waikato Fish & Game Council and Ngati Te Ata.


The 1127ha Waiuku Forest was established on sand dunes bordered by the Waikato River to the south and the Tasman Sea to the west. Some of the proposed harvesting was of 2nd-rotation trees, no new earthworks were required for roading and the site had no streams or natural areas of surface water, the hearing was told.


The committee said the forest was part of a large block of land confiscated from Maori in 1864 following the land wars, but parts were returned to Maori in 1865, including 4 historical waahi tapu areas in the area of the harvesting application. In 1932 the Public Works Department planted marram grass & lupin to reduce sand encroaching on to adjacent farmland and pine planting began in 1935 to further protect the area.


The Te Papawhero block was taken by the Crown for sand-dune stabilisation in 1939 and, in 1959, the Waiaraponia, Te Kuo & Tangitanginga blocks were taken under the Public Works Act for state forest. They were formally gazetted as conservation areas in 1990.


The committee said it accepted the potential for harvesting-related effects on surface erosion or discharges of sediment to surface water under routine plantation forestry management was very low. However, several areas of the coastal margin had been subject to coastal erosion, which had reduced the buffer area to very thin strips in places. The committee said pines along the coastal strip should be removed or replaced with shrubs long-term, and the company & relevant parties needed to discuss this.


It said felling & extracting mature pine trees had the potential to adversely affect waahi tapu or other traditional values and to disturb, damage or destroy any archaeological sites yet to be discovered.


The committee recognised the extreme frustration felt by all parties over consultation issues, but said its responsibility was confined to assessing the evidence presented. Trees on the 4 waahi tapu sites needed attention, and it hoped Ngati Te Ata & Crown Forestry could work together to ensure very old & diseased trees could be dealt with.


Crown Forestry had tried to develop appropriate protocols & management agreements in consultation with Ngati Te Ata, but this hadn’t been successful.


The committee said the trees could be harvested under certain provisions, and should ultimately be harvested, but harvesting needed to be undertaken within a management regime that recognised & provided for matters of significance to Ngati Te Ata. The committee couldn’t decide on a management regime or impose one on the applicant from the evidence before it.


On the basis of the evidence, the hearing committee said it couldn’t grant the consent in a way which adequately fulfilled several fundamental requirements of the Resource Management Act.


Green opponents fight Ernslaw’s Whangapoua harvesting


In the case of Whangapoua Forest, Ernslaw One Ltd applied last year for several consents, including for ancillary activities (earthworks, roading and stream crossings), and drew 31 submissions from opponents which included a range of environmental groups, iwi & individuals. Their grounds for opposition included:

biodiversity effects to rare, endangered or threatened species
riparian effects, planting setbacks & mitigation requirements
soil erosion, water-quality effects & subsequent effects to streams, wetlands & harbours, and
inconsistency with relevant laws, policies & plan provisions.

After a 4-day hearing in February the 2 commissioners granted the consents but the Conservation Department & Whangapoua Environmental Protection Society, as has Ernslaw One itself. Section 274 notices have also been lodged by the department and the Whangapoua Beach Ratepayers Association against the Ernslaw One appeal.


Shirley says Environment Waikato “clearly out of control”


Act MP Ken Shirley said it was “little wonder that our investment in new forests has diminished to a small fraction of the former levels and that large forestry companies are looking to leave New Zealand.


“The decision by Environment Waikato in respect to a land use consent to harvest epitomises the nonsensical barriers confronting forestry in New Zealand. In declining the application, Environment Waikato stated the following: ‘Felling & extracting mature pine trees had the potential to adversely affect waahi tapu or other traditional values and to disturb, damage or destroy archaeological sites yet to be discovered’.


“It’s clear to any person that such conditions prohibit any development or harvest. One could also extrapolate the same condition to prohibit any farmer from ploughing a field. It’s time that Labour took a much stronger position and spelt out clearly in legislation that this sort of nonsense must go.


“With this sort of decision, it’s no wonder forest owners are choosing not to plant new forests and our commitment to the Kyoto Protocol is in deficit. The erosion of property rights must be one of the biggest disincentives for investment in the productive sector in New Zealand. Environment Waikato is clearly out of control.


“One can only hope that Crown Forests will appeal this decision and that the courts will expose the nonsense for what it is.”


Websites: Environment Waikato release


Act, Shirley statement


 


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