Archive | Sectors

Reserved decision on Trans Tasman payout case strikeout call (detailed version)

SEA seeks end to investor John Powell’s “oppression” claim

Justice Hugh Williams reserved his decision yesterday on an application by SEA Holdings NZ Ltd to strike out a claim by Christchurch businessman John Powell & his company, Latimer Holdings Ltd, to be paid out of their investment in Trans Tasman Holdings Ltd at fair value – which they said should be net asset value — under the “oppression of minorities” clause of the Companies Act, section 174.

SEA also wants summary judgment against Mr Powell & Latimer. Whichever way the judge goes, an appeal is a likely outcome of Justice Williams’ Auckland High Court ruling.

Some arguments from the substantive case (still to be heard) were put to the judge in the strikeout hearing, and Mr Powell’s side claimed in a few instances that insufficient information had been provided on certain aspects, thus requiring continuation of the case.

SEA Holdings NZ holds SEA Holdings Ltd of Hong Kong’s stake in Trans Tasman, now above 55%.

Basic facts of the dispute are these:

Mr Powell and Latimer Holdings bought into Trans Tasman in the wake of SEA’s attempt in 2001 to buy all the equity in Trans Tasman, offering debt securities to minority shareholders. At that time Trans Tasman’s net asset backing was 70c/share.

Mr Powell & his company bought 2.9% of Trans Tasman between May 2001-August 2002 – 17.5 million shares at an average 25.2c/share for a total $4.4 million. The market price now is 33c.

When Mr Powell filed his claim, in February this year, for SEA to pay him out of his investment at net asset backing, the share price was 25c and asset value was 55c.

Trans Tasman counsel said in the hearing the share price had risen 48%, from 23-34c, from the time Mr Powell started buying in May 2001 until 15 August 2003 (date of an affidavit, closing point for this calculation). The value of the portfolio had risen to $5.9 million, giving a $1.53 million profit.

From the portfolio average of 25.2c to today’s market price of 33c, the rise in portfolio value is 31% and the gain on paper is $1.36 million.

Through all this period, Trans Tasman hasn’t paid a dividendWindfall potential

The Trans Tasman lawyers (Mr Cooper & senior counsel Brian Latimour), not surprisingly, referred to the potential of a Powell windfall.

“The plaintiffs, who have already made a very substantial profit from their investment in Trans Tasman, are asking the court to order SEA NZ to buy their shares at a price that would give the plaintiffs a profit of $5.2 million or 118% in the period of a little over 2 years since they acquired their shares,” Mr Latimour said.

He added, later in his submission, that “It is not the role of section 174 to allow an investor who has made a poor investment decision to ask the court to ‘correct’ its poor decision by setting a price at which the investor’s shares are to be purchased. That would undermine the fundamental concept that the market determines its own price.

“Similarly, it cannot be the role of section 174 to allow an investor to buy shares in a company with a net asset value above its share price, and then to ask the court to require another shareholder to purchase the investor’s shares at the net asset value.

“If that were possible, the courts would be inundated with claims by investors seeking windfall gains similar to those sought by the plaintiffs in this case.”

Mr Latimour argued that no breach of Trans Tasman’s constitution, the Companies Act or stock exchange listing rules was alleged. He said minority oppression could only arise at a listed company where there was unlawful conduct, and the Powell claim relied on an incorrect interpretation, seeking to extend the concept of legitimate expectations well beyond the proper boundaries the courts have recognised.

Powell perspective

What of the supposed windfall from the Powell perspective?

Stephen Rennie, for Mr Powell & Latimer, said the SEA assertion that they could sell their shares on the market at above purchase price “is an attempt to deflect attention from the true inquiry and is misconceived.

“The purchase price is irrelevant… In this case the complaint centres around continued use of majority voting power to prevent liquidation and to preserve a continuing receipt of cash benefits from Trans Tasman… It is wrong to equate the NZX price with fair price…

“A sale on the NZX effectively transfers the prejudice. SEA NZ can raise the identical argument and never be held accountable so long as the share price remains constant or increases.

“In the meantime, it can sit and choose the appropriate time to make a takeover, or purchase shares itself, and ultimately end up with the assets for less than fair value.”

GPG, which held 3% of Trans Tasman, proposed to the May 2002 annual meeting that Trans Tasman be liquidated.

Mr Rennie told Justice Williams: “The plaintiffs voted in favour of the resolution. For them it was a triggering event. It brought home to the plaintiffs the many problems associated with Trans Tasman & the underlying management. They regarded liquidation as the best option for all shareholders.”

This special resolution got support from 20.6% of total shares, 36% of those voted. SEA, holding 55% of stock, got support from an extra 2%.

Mr Rennie said that, assuming orderly disposal at book value, liquidation then would have raised 59c/share, more than double the 26c share price at the time.

Other Trans Tasman factors

The office property market, and Trans Tasman’s state, began changing about the time GPG began to take strong interest in the affairs of a company which was the successor to 2 beleaguered remnants of the 80s, Robt Jones Investments Ltd and Seabil NZ Ltd.

With a lower debt level, Trans Tasman has turned its attention to development schemes around Auckland’s Viaduct Harbour and to industrial land subdivision near Auckland International Airport.

Its 50.2%-owned Australian subsidiary, Australian Growth Properties Ltd, has sold the bulk of its portfolio. Mr Powell wants the money from cashing up in Australia returned to shareholders (so half would return to Trans Tasman).

Australian Growth hasn’t said what it will do with the money, but Trans Tasman doesn’t want to wind that company up and SEA in Hong Kong has said it doesn’t want to liquidate either of its Australasian listings.

Trans Tasman shareholders will meet in mid-October – Monday the 20th is now the likely date, given timeframes for getting exchange approval and sending out documents – to vote on the takeover and proposals to return capital.

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Australand profit up 2.9% for half

Residential developer whines about gst

Sydney-based Australand Holdings Ltd increased its June half profit by 2.9% to $A33.1 million on sales up 47% to $A627.3 million but pretax operating profit down 8.8% to $A45.4 million.

Managing director Brendan Crotty blamed gst. He said the substantial gst charges incurred during the period — $A26 million — offset a 39% increase in underlying profitability, and that gst charges reduced earnings/share by A3.7c to A6.39c.

Net tangible assets rose from $A1.11 to $A1.24. The fully franked quarterly dividend has been maintained at A3c/share.

Land & housing division revenue fell $A25 million as weaker market conditions in the December half continued through the March quarter, but Melbourne and Sydney projects performed strongly.

The apartments division earned $A70 million more as three major Sydney projects were completed.

The commercial & industrial division earned $A36 million more from greater construction activity in Sydney and Melbourne.

Australand secured development sites worth $A144 million and expects to add $A60-80 million of sites in the second half.

The gst complaints

Mr Crotty said the introduction of gst on 1 July 2000 had three major adverse effects for the residential property development industry. Developers can claim gst but homebuyers can’t, so developers have absorbed most or all of applicable gst out of sales revenue.

Housing construction contracted more than expected after gst’s introduction, subduing price growth for nine months and substantially eroding post-gst margins.

Mr Crotty said the transitional provisions applied very unfairly to residential developers. The Government gave 18 months’ notice that gst would apply to value added after 1 July 2000 to all residential presales entered into during the intervening period.

Many apartments on largescale projects are being delivered 12-15 months after gst’s introduction and developers have been required to pay all applicable gst.

This has been a common whine from the whole of an industry which was happy to create a pre-gst boom (and glut), which has added to the tax cost.

Two years to get margins back up

Mr Crotty said it could take two years before land and housing project margins are restored to pre-gst levels. The company’s interim answer is to lift sales revenue and operating margins where possible to counteract the gst impact.

Mr Crotty said the company’s inability to recover gst in some market segments had influenced its acquisition strategy, expanding the commercial/industrial business and allocating less capital to land and housing short-term.

Lower interest rates and a rise in the first home owners grant for new housing boosted June quarter sales in all states and could flow through to higher prices and margins in the December half.

Australand sold 806 apartments for $A349 million, mostly in Sydney. It has three projects to complete in Melbourne in the next 18 months, has two new Sydney projects and further stages of joint ventures at Balmain Shores and King St Wharf in Sydney. Presales at 3 June were $A440 million on wholly owned projects and $A249 million on joint ventures.

Its commercial & industrial division earned $A111 million from 12 precommitted projects and negotiation of 18 pre-leases for 163,750m². Six are for Australand’s Wholesale Property Trust, in which the company intends to retain a 15% stake.

It will form a second wholesale trust in the December half, with assets of about $A120 million.

Mr Crotty expects Australand’s full-year profit to be slightly ahead of 2000, and said the company should pay less tax in 2002, which will cut franking of dividends by 50%.

Pretax profit:revenue fell from 11.7% to 7.2%, while aftertax profit:equity fell from 5.4% to 5%.

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Lend Lease gets National Australia Bank for Docklands

Bank will move to waterfront campus

National Australia Bank has nominated Lend Lease Corp as preferred developer of its new headquarters — an $A200 million, 56,000m² Victoria Harbour office complex in Melbourne’s Docklands, where the bank wants to start moving 4000 staff from mid-2003.

Lend Lease offered a totally integrated solution of development, design, construction and project finance services, followed by proposed long-term ownership of the asset by a property fund which Lend Lease would manage. The bank chose Docklands ahead of 35 other Melbourne sites.

Lend Lease Development’s chief executive, Desmond Marks, said the National decision to go to Docklands’ central precinct confirmed central business district tenant acceptance of Victoria Harbour as a natural extension of the cbd. Both Collins and Bourke Sts will be extended into Docklands.

Large floorplates, lowrise

But it will be very different, offering efficient large floorplates in a lowrise (6-7 storeys) design, excellent views, fresh air and sunlight to all floors in an office campus.

Construction of the first building should start in October, for mid-2003 completion. The second building should be finished a year later, and National has an option on further space, to be exercised by late 2004.

Lend Lease will simultaneously build the first stages of the Bourke St extension, a pedestrian link to Spencer St station, initial retail and cafe/bar facilities, the waterfront and the grand plaza which the bank buildings will front.

Mr Marks said Lend Lease had expressions of interest exceeding available office space under the Victoria Harbour master plan, and had received hundreds of residential inquiries though nothing had been marketed.

Victoria Harbour covers 30ha, bound by the Yarra River and Harbour Esplanade. The precinct is expected to have 15,000 people living and working in it.

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Westfield adds 3 malls, profits in 1 onsale to Centro

Iniial yields 6.75-7.95%

Westfield Trust has bought Commonwealth Funds Management out of 3 Australian shopping centres, then sold 1 of the centres to Centro Property Group.

Westfield and Commonwealth jointly owned the Westfield Belconnen in Canberra, and the Westfield Marion and Westfield Arndale in Adelaide.

Westfield bought Commonwealth out of the 75,000m² Belconnen for $A230 million at a 6.75% initial yield, the 119,000m² Marion for $A323 million at 6.5% and the 40,166m² Arndale for $A57 million at 7.95%.

It then sold Arndale to Centro for $A117 million, which represented a 7.5% yield on Westfield’s 50%. Arndale had a book value for Westfield of $A45.6 million, so the sale resulted in an $A14.4 million profit.

Centro scored 2 malls, in Perth & Brisbane, when it capitulated to Westfield in the takeover of the AMP Retail Trust in July. Centro said it would hold half the new centre in its own portfolio and put the other half in its next syndicate, Centro MCS 33.

Centro also gets a writeup from Arndale: CB Richard Ellis has put a 30 November valuation on it of $A120 million ($A2978/m²) based on a 7.75% cap rate & 10%/year internal rate of return, and including $A2 million for 14,000m² of surplus land.

Westfield said its outlay would total $A527 million and its gearing would rise from 36% to 38%.

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Take your pick for what the building consent figures show

1856 consents in May highest monthly tally for year

The residential construction level in May was the highest for a year at 1856 consents.

Annual comparisons show the year to May 2001 still well down on levels for the previous two years — the 19,235 consents for new dwellings in the latest Statistics NZ tally was 22% below the number to May 2000 and 12.8% below the year to May 1999.

For the month of May, the number of consents was 11.75% below May 2000 and 21.9% below May 1999.

Looked at in other ways, the statistics showed the average dwelling size rose last year and again this year, the average construction value did the same, but the average cost/m² fell.

Government Statistician Brian Pink said the trend line showed a slight increase in recent months after falling by one-third from August 1999 to December 2000. After adjusting for seasonal fluctuations, Mr Pink said the May figure was 4% down on April’s.

The rise in average house size indicates it’s the bottom end of the market that’s being hit, seemingly confirmed by the rise in average house cost. Comparisons of construction cost/m² for the month of May show sharp declines in 2000 and again this year, but over the whole year the average is much closer and slightly up this year compared to the previous two years.

The average house size for the month of May was 158.6m² in 1999, 162.6m² in 2000 and 174.6m² in 2001. For the year to May, the averages were 159.2m² in 1999, 166.6m² in 2000 and 175.8m² in 2001.

Average cost for the month was $136,264 in 1999, $137,089 in 2000 and $145,797 in 2001. For the year to May, the figures were $132,858 in 1999, $138,053 in 2000 and $147,455 in 2001.

In dollars/m², the averages for the month of May were $859.15 in 1999, $842.98 in 2000 and $835.18 in 2001. For the year to May, the averages were $834.33 in 1999, $828.66 in 2000 and $838.65 in 2001.

Consents for new apartments fell 42% in the year to May, to 2110, but the average cost rose from $84,346 to $90,236. The number of apartment consents tends to be volatile but is generally lower than two years ago. In May 2001, there were 269 consents issued at an average $91,821.

Non-residential construction has also been volatile. For May, the value of those consents was $255.7 million, compared to $270.6 million for residential consents and $338 million for all residential buildings, including additions and alterations.

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Banks and Hay get their way

Yates still has consent process reins but Hay wants process streamlined

New Auckland mayor John Banks got the number of committees down to eight, committee membership numbers down to a maximum of eight, ousted City Vision/Labour/Team Auckland from any positions of influence, and effectively has the council he wanted: nine Citizens & Ratepayers Now (CitRats) members, two supporting independents to give a constant majority, review of the committee structure in a year.

The man who put the committee combinations together, deputy mayor David Hay, was smiling sweetly after Thursday night’s council meeting, which finished after 72 minutes, just as former deputy mayor & City Vision councillor Bruce Hucker was getting to the door as the last person in a protest walkout.

The protest was led by Labour councillor Richard Northey after all attempts at reason by City Vision/Labour/Team Auckland on forming committees were voted down on ticket lines.

Cllr Faye Storer (Waiheke, no ticket) may or may not have been part of the protest: she was packing her bags before it began and may have just been making a dash down Queen St to the ferry.

Lone voice of past 3 years well & truly back in charge

Cllr Hay’s was a lone voice on the previous council, as he went through three years asking for a cost/benefit analysis of the Britomart scheme finally put in place just before the October election. Throughout, he was mocked, patted on the head for being so alone in his stand.

As deputy mayor 1995-98, Cllr Hay was in the Les Mills team that put together the grandiose Britomart scheme rejected by the 1998-2001 council. That Britomart scheme actually had a lower budgeted cost and offered an income stream, which the replacement scheme doesn’t offer.

So Cllr Hay was able this week to turn the tables, and turn the knife.

Cllr William Cairns is the only CitRat apart from Cllr Hay not to head a committee. Cllr Cairns looks after the Art Gallery Enterprise Board but, more importantly for him, is on the strategy & governance and finance & corporate business committees.

Christian, Mulholland on planning fixtures

Independent councillor Bill Christian chairs the works committee and will sit on both the city development and transport committees, as well as being one of three planning fixtures sub-committee members.

The other independent, Cllr Geoff Abbott, gets to chair the Zoo Enterprise Board and will also sit on the strategy & governance and works committees.

Cllr Juliet Yates, who headed the planning & regulatory committee and planning fixtures sub-committee on the previous council, heads the new city development committee this time and keeps the fixtures job. New CitRat councillor Graeme Mulholland joins her & Cllr Christian on the fixtures sub-committee.

Nine councillors are named as planning commissioners — the three fixtures sub-committee members, plus Cllrs Abbott, Glenda Fryer, Hucker, Penny Sefuiva, Storer & Vern Walsh.

The recreation & events committee, which includes promotion and the America’s Cup in its sphere, will be chaired by new councillor Scott Milne.

City Development the new property committee

The city development committee has most of the external property-related affairs under its umbrella, but Britomart construction & property issues will be dealt with by the finance & corporate business committee, chaired by Cllr Doug Armstrong.

Several non-CitRat councillors harped on the more balanced makeup under the previous council — for example, Cllr Yates, as a CitRat, heading a major committee. But bleating about the previous council finally got to mayor Banks: “The last council is why I sit at the head of this council,” he said, as he began the first of two tirades intended to get everybody straight on where they stand.

“And I don’t want to be lectured on democracy & fairness when the last council saddled this council 22 hours before the election with that monolith at the bottom of Auckland [the revised Britomart development]. It was palpably wrong.”

Mr Banks said he wanted to scale back things of huge cost with little cost/benefit analysis, wanted to bring on the roading programme, wanted safety in the city after dark.

It’s not same job, change of faces

“And I want to take a look at the bureaucracy. It’s not business as usual, it’s not an extension of the old government, this is a new government. The people of Auckland don’t want to continue down the street to nowhere.”

He made no apology for putting a most talented group of new people in positions where they could deliver on promises. Cllr Fryer (City Vision) earlier acknowledged the CitRats had won nine seats, “but that shouldn’t mean winner take all.”

Wrong, said Mr Banks: “I support the fact that the winner will take all, and the winner will be the people of this city and this country. The reality of life is about votes in a democracy. The votes have been cast and the game has changed.”

The philosophical difference, which has a great deal to do with how the business of the council is run, arose again over appointments to external bodies. Cllr Northey found he’d been taken off one organisation he believed he’d built up an affinity with, and nobody was allocated to Age Concern.

Back to core business

Said Mr Banks: “This council I believe should start focusing on core business associated with the interests of the ratepayers and funding of the same.” He accused central government of passing on many responsibilities, with the attendant costs. He took nothing away from the work of Age Concern, but said that was an area of central government responsibility.

Mr Hay told the council: “We think we can use volunteers to a greater extent and let the councillors & community board members get on with running the affairs of the city.”

The extent of this change is not decided: Cllr Hay told me later “we want to have a look at this,” especially delegation of authority. While he said “we’ve got to lift the status of community boards,” he added that “we don’t have a clear policy.”

Cllr Hay also envisages changes in the resource consent area handled by the property fixtures sub-committee, to streamline the process. “We’ll be asking staff to come back with suggestions. We need to ask the marketplace as well.”

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New Rodney mayor creates novel governance structure

Committees to target new issues of high-growth district

Rodney District Council’s new mayor, John Law (left), has formulated a new committee structure which was put in place at the councillors’ first formal meeting on Friday.

The structure has seven committees. One, the governance funding & finance committee, has all councillors as members. Others have 5-7 of the 12 councillors as members.

The most important one for the property industry on a continuing basis is the hearings committee, headed by northern ward councillor Elizabeth Foster, one of the councillors suspended a year ago who was returned to office.

She will have with her one other former councillor, David Steele (western ward), three new eastern ward (Hibiscus Coast) councillors, Barbara Griffin, Rob Thompson and Wayne Walker, and western ward councillor Pat Delich as an alternate member.

Cllr Walker has campaigned on environmental issues for many years and has promoted alternatives to the Weiti bridge access to the Whangaparaoa Peninsula, which council staff have fought hard to create. Cllr Foster has also campaigned locally at Whangateau on environmental issues concerning the Omaha South development.

Hearings by councillors will start on Friday 18 May (a permanent change from Thursdays). Until then principal hearings commissioner Ken Graham will continue to hear resource consent applications.

The hearings committee will generally have three members hearing consent applications, but will also be able to contract hearings commissioners.

The council elected Christine Rose as deputy mayor for the first 18 months. Committee heads were also elected for 18 months.

The committees

Other committees are: Community, environment, regional & economic development advisory (including co-opted advisors), works & services, and a temporary district plan committee.

Mayor Law said there was a significant drive from central government for local government to take on more. “They are saying you must take on social issues, not just core services.”

For that reason, he said the council needed to have a structure catering for social, environmental and economic issues, and core services. He believed governance would become more important, with performance measures playing a significant role.

However, the detailed scope and powers of each committee had not yet been prepared.

All the new councillors took part in forming the committees, resulting in a straightforward formal vote in favour on Friday.

Issues and initiatives working parties

Councillors were also assigned to a long list of community issues and community initiatives working parties.

The environment committee’s roles will include:

Advising on alternative energy and building developments

Advising the economic advisory committee on developing alternative agriculture, horticulture and farming systems

Assessing the future needs of the community on waste alternatives and considering test areas for assessment

Conducting relations with the regional council on environment, planning and growth

Educating the public in many of these issues

And dealing with bylaws not heard by the hearings committee.The regional & economic development advisory committee’s roles will include:

Business development

Promoting fast-track permitting criteria

Economic protection and development

Tourism development

Advising the council on introducing and/or changing policies and bylaws to enhance growth

Increasing employment opportunities

Encouraging festivals and sports events

Making recommendations on improving the ambiance of shopping areas and the rural districts to improve economic growth

Forward and strategic planning

Relations with education institutions and with the regional council on investment

And to formalise a relationship with the Rodney Enterprise Board to attract substantial funding from outside institutions. Solutions-focused working groups

The community issues working groups will all have councillors assigned to them, with a responsibility to come back with short-, medium- and long-term solutions. Mr Law said all issues would remain on the council’s agenda until taken off. And he said the council would get a nine-seater van to take councillors and staff on site visits to deal directly with issues.

“You will see us in the community, not just sitting in these chambers.”

One new councillor, the council’s previous returning officer, Bill Smith, seems to have set himself up as the gung-ho council’s conscience, advocating (and getting) a reduction in councillors’ earnings, failing to get an immediate acceptance of evening meetings for at least the council, if not some committees, and suggesting that seven committees is too many.

But the mayor knocked back the suggestion of fewer committees: “If you’re running an efficient organisation, one of the worst things you can do is have committees that can’t handle the workload.

“There are just on 90 areas of responsibility for those committees.”

Mr Law said that if council committees weren’t in control of them, “staff and management start to drive policy, not the council.”

Local Government Association role and value questioned

One of the first casualties from the new council may be its relationship with the Local Government Association, whose leaders (around the time that leadership was about to be deposed) visited the council last year after half the council had resigned and the other half were about to be suspended.

Cllr Foster wanted to know the cost of this association and what it did for Rodney: “It didn’t do much for us before,” she said.

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Panmure opponents of Liveable Communities strategy win reprieve

Plan set aside for workshops to be run

Vehement opposition to specifics of the regional growth strategy must make Auckland’s planners rethink how they’re going about the process of fitting twice as many people into the region over the next 50 years.

Panmure is a prize example of how, in a local view presented to Auckland City Council’s planning & regulatory committee last Friday, it’s all gone very wrong.

The region’s seven mayors and regional council chairman signed their agreement to the growth strategy at the end of 1999, as representatives of all the local bodies and therefore all the existing population.

The signing was done at a regional growth forum function at Eden Park. From the growth forum’s inception in 1996 there was input from the private sector (distinct from private sector organisation lobbyists), but my perception is that it wasn’t adequate.

Private interests were not all pulling one way — some developers wanted the forum to make it easier to build high-density housing along transport corridors and on brownfields sites, others wanted the ability to continue greenfields development, for example.

Their views are recorded, but the planning outcome mostly accords with what professional planners wanted as a solution to accommodating more than two million people by 2050.

Theory, practice, fireworks

Of course, that ought to be entirely sensible and proper. The real world doesn’t work to the perfect model, and Panmure’s uproar shows how stamping the theoretical design on an existing suburb isn’t going to work.

City council planners are now going back to the workshop process, putting to one side for the moment the Liveable Communities concept which got the Panmure community up in arms.

How many workshops there will be, they don’t know, environmental planning manager Penny Pirrit told councillors and submitters last week.

They will be on the future of Panmure and how growth might affect the area, she said.

Workshops have proven useful

Workshops have proven a useful way of getting ideas out of the locals, as has been done at Takanini and Hingaia in the Papakura district, and is starting to be done in parts of Rodney. They’ve also been used in Auckland City — one example is the western corridor series.

Even so, ideas can be imposed, naturally so if the locals don’t quite know what they’re doing, haven’t arrived with an idea of what their neighbourhood might be like in half a century when they won’t be here, and don’t normally think about designing the neighbourhood’s gardens instead of mowing their own lawn.

From the observations of Michael Drake for the Panmure Community Action Group, the growth strategy planners haven’t understood this community at all. The essential issue is the high-density plan, growing the population by allowing widespread development of blocks 4-6 storeys high.

One planning argument is that this won’t all happen at once. Mr Drake’s response is that every such development will dominate at least six contiguous properties, and impact on the views and neighbourhood conditions of a wider area. “The zone of impact created by each development is such that less than 6% of the projected development has to take place to immediately affect every single existing home in Panmure.”

I suspect that argument would follow sprinkling of highrises, but might not apply fully if they were clustered or in strips.

10 strategic growth management areas

Auckland City’s Liveable Communities strategy, adopted last June, shows 10 strategic growth management areas. For Ellerslie-Panmure, it shows an existing dwelling density of 1:900m² in residential and business-zoned areas.

“The overall density under the proposed growth target to the year 2050 will increase net density to 1:380m², or 26 units/ha [from 11 units/ha now]. If growth is confined to existing residential areas only, future densities will equate to approximately 1:230m², or 42 units/ha.

Projections show a population rise from nearly 5500 to 13,400, household numbers from 2000 to 4900. For Panmure (without Ellerslie), Mr Drake said the rise in homes would be from 900 to 2200.

He said Panmure people were “surprised and distressed that council and its officers could be so insensitive as to propose the complete destruction of everything we value.

“Some councillors have expressed surprise that such alarm should arise to Liveable Communities when so little public comment was apparently made on the regional growth strategy. The explanation is simple: when it was suggested that a regional growth strategy be adopted to manage thousands more residents in the city, citizens not unnaturally assumed that existing open spaces such as the Mt Wellington quarry site or permitted medium– and high-density residential zones would be utilised.”

Claim of public consultation questioned

Mr Drake questioned the “public consultation” explanation in the strategic management area plan. “It clearly advances the idea that Liveable Communities is a done deal. Public consultation does not offer the option of rejecting the plan — it can only contribute to it before it is adopted by council.

“Such consultation has more an appearance of manipulation than democracy. It is our view that this plan is not improvable: it must be withdrawn.”

Miss Pirrit said that in going to the workshops process, “it [the strategy] has been put to one side.”

Councillors’ comments illuminating

Comments from three councillors on Mr Drake’s submission at the committee meeting were illuminating.

Committee chairman Juliet Yates said “We certainly don’t intend to create substandard housing.”

That comment can relate to both building materials and density, but with all the controls in the world in place, many developers opt for maximum use of the building envelope as first and only preference. In that, there is an irony: developers are complaining that councils have started to impose maximum levies in their new development contributions structures for financing infrastructure, while most building designs start at the envelope or floor: area ratio maximum then add some.

The outcome is, in numerous examples around Auckland over the past decade, a poorer environment than could have been.

Cllr Penny Sefuiva, who sits on the Western Bays community board so has an interest in the inner suburbs from Ponsonby through to Mt Albert, said her own world had changed dramatically: “If we’d had better planning we might have had better development.”

Why don’t we like medium density, McKelvie asks

Cllr Kay McKelvie asked Mr Drake: “Is there something about medium density which is inherently bad, or are we just not used to it?”

Mr Drake said the action group wouldn’t object to the Mt Wellington quarry site being used for higher-density housing (the council turned down an owners’ proposal for mixed-used development which included considerable commercial and retail space), but Cllr McKelvie moved on from there to a theme which is obviously in the back of councils’ and planners’ thoughts when they work on higher-density housing solutions: “Is there not a danger of people living in caravans, garages? If we don’t plan, with increasing population we’ll have shanty towns.”

My impression of the Panmure protest is not that these people were opposed to planning, or even to more people living in the neighbourhood. But they are opposed to insensitive, bad planning — one example Mr Drake gave was of a commercial design completely ignoring topography, an illustration on the Liveable Communities strategy of a building a couple of storeys high which just happened to be above a steep slope off Panmure’s main street, Queen’s Rd.

And the complaint about highrise residential blocks giving occupants the ability to look down on their neighbours is being taken seriously by planning commissioners and judges, who have rejected such developments in places where the growth strategists have thought they’d be sensible.

Those rulings indicate the councils and growth strategists have got at least some of the design wrong, while a protest like the Panmure group’s indicates the consultation process needs attention, as a starting point for better community evolution.

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Cllr Yates’ notes on waterfront conference

Councillor’s full notes on waterfront conference, visits to London, Holland & Berlin

Cllr Juliet Yates, who chairs Auckland City Council’s city development committee, presented the committee with 16 pages of notes at its December meeting from her visit to the international waterfront conference held at Canary Wharf in London.

The visit also took her and city planning manager John Duthie to the London borough of Islington and the redevelopment around Kings Cross station, to Groningen and Amsterdam in the Netherlands, and to Berlin.

I wrote about Cllr Yates’ report at the time of the meeting, but felt her impressions deserved a fuller spread. The only editing is typographical.

Cllr Yates’ notes have been split into 4 parts:

Conference notes (below)

Berlin

Regeneration around Kings Cross station and

Islington.

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Bayleys signs record $3 billion of deals

Transaction number up 20% to 5374

The Bayleys real estate group signed up a record $3.021 billion worth of property business in the March 2002 year, a 35% increase, from a 20% rise in transactions — 5374 through the group’s 32 offices.

Bayleys Corp managing director Jeff Davidson (left) said the figures the increased level of activity in all sectors of the property market.

“It’s been a very buoyant year for the real estate industry. What’s been particularly encouraging has been the significant pickup in metropolitan markets, which have benefited from the low interest rate environment, stronger economic activity & rural investors buying urban properties.”

Bayleys’ largest transaction for the year was its $31.1 million sale of Novell House in Wellington to Capital Properties NZ Ltd.h

$1-10 million trades a feature

However, Mr Davidson said a feature of the year was the substantial increase in sales of properties between $1-10 million across all sectors of the market. Bayleys sold 16 homes for more than $1 million in its Auckland auction rooms in February & March, twice the number for the same period in 2001.

Mr Davidson said the commercial & industrial market had experienced its best year in a long time and the rural property market was also continuing to perform strongly.

Bayleys’ increased share of the country market, which now accounts for about 20% of its business, had also contributed substantially to the growth in the group’s revenue.

Expats boost figures

Mr Davidson said a pleasing feature of the market has been the increased level of inquiry from & sales to expatriate New Zealanders, fuelled by lifestyle perceptions and attractive interest & exchange rates.

“They are either investing back here or, in an increasing number of cases, looking to return home, particularly since 11 September.”

Mr Davidson said the Reserve Bank’s recent lifting of the official cash rate might lead to some levelling off in the market.

“While interest rates are likely to edge up further, they are expected to remain at relatively low levels in historical terms, which will continue to be positive for property.”

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