Archive | Sectors

Augusta slots new single-asset fund in ahead of tourism fund

Augusta Capital Ltd has delayed the launch of its tourism fund while it raises new capital for its industrial fund and starts a new single-asset fund.

The single-asset fund will hold a mixed-use property in Brisbane. It’s at 255-271 Gympie Rd, Kedron, and comprises 5 office, retail & childcare buildings. The property’s 6 tenancies are all occupied, giving a weighted average lease term of 7.7 years.

Augusta managing director Mark Francis said just before Christmas the new fund would acquire the property for $A21.52 million. Settlement is scheduled for 29 March. Augusta intends to raise $A15.1 million of equity, using a debt facility to fund the balance of the purchase price & establishment costs. Augusta expects to receive an offeror’s fee of about $A700,000. The offer won’t be underwritten and is expected to open in mid-February.

As a result of the timing of this offer and the timing of the Augusta Industrial Fund’s next capital-raising in February-March, Mr Francis said Augusta had determined to delay the establishment of the Augusta Tourism Fund until later in 2019. The 2 properties so far intended to go into it – 54 Cook St in Auckland & 7-19 Man St in Queenstown – will continue to be held on Augusta’s balance sheet until the tourism fund is established.

Earlier stories:
21 December 2018: Augusta Industrial Fund to add 5 properties, seek more investors
3 December 2018: Augusta buys Queenstown site for second tourism fund hotel
23 October 2018: Fund shareholders approve sale to initiate Augusta tourism fund
24 September 2018: Pod hotel the opportunity for Augusta to close value-add fund with strong return and open tourism fund

Attribution: Company release.

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Appeal Court tells council & unitary plan panel to issue new Oteha Valley decisions

Palmerston North developer John Farquhar’s commitment to intensification on an 8ha site above Oteha Valley Rd at Albany hasn’t wavered despite a conflict with officialdom over 18 years, first with the North Shore City Council and, since 2010, Auckland Council & Auckland Transport.

On the Friday before Christmas, Mr Farquhar’s companies, North Eastern Developments Ltd & Heritage Land Ltd, won a telling judgment from the Court of Appeal setting aside decisions of Auckland Council & the independent hearings panel on the council’s new unitary plan, and directing the council & the panel to make new decisions.

The Court of Appeal bench which heard the case comprised Justices Raynor Asher, Graham Lang & Simon Moore.

Central issue

The central issue in the court’s finding of procedural unfairness was that the panel had relied on council evidence which the council had indicated to Mr Farquhar it would no longer rely on. The council then changed its mind, relied on this evidence but didn’t notify Mr Farquhar & his companies, whose lawyer had obtained permission to cross-examine the council planning witness in question but, unaware of the change of mind, didn’t pursue that cross-examination.

Over a period when the term “crisis” has been in daily use in reference to the lack of provision of new housing in Auckland, the unitary plan hearings panel recommended to the council in July 2016, and the council then decided in August 2016, not to adopt the Albany 5 precinct and not to zone the land within the proposed sub-precinct B business – mixed use.

Those zonings are central to Mr Farquhar’s intention to develop up to 500  apartments, plus some commercial & retail outlets, on 8ha at 56 Fairview Avenue and 129 & 131 Oteha Valley Rd.

Intensification plans date back to 2001

Mr Farquhar, whose family has been heavily involved in development in Palmerston North for 80 years, bought the bulk of his 8.4ha Oteha Valley site in 2001 and a small access lot in 2006. He secured regional land use consents in 2004, but North Shore City Council eventually declined consents for all 3 components of his proposed development in 2009. A joint memorandum resolved the appeals in principle in July 2012.

Then came an application by Auckland Transport to extend Medallion Drive, an arterial route running through the suburbs between the Northern Motorway (State Highway 1) & East Coast Rd, so it would cross Oteha Valley Rd, rising to Lonely Track Rd via Fairview Avenue to improve access for new housing above the old Albany village and the newer Albany City developments. Lonely Track Rd is the boundary between the urban North Shore and a bush precinct above the southern edge of rural Rodney.

The panel recommendation

On the Albany 5 precinct, the unitary plan panel said in its recommendation: “The purpose of the precinct was to establish a policy & rule framework for the land that recognised its potential for intensive residential development to a higher intensity & height than that set as the benchmark for the residential – terrace housing & apartment buildings zone and for a mixed use development fronting Oteha Valley Rd. The precinct sought the inclusion of 3 sub-precincts to provide for differing building heights:

  • Sub-precinct A: 27m on the major, more elevated part of the site fronting Fairview Avenue
  • Sub-precinct B: 23m for the mixed use area along Oteha Valley Rd, and
  • Sub-precinct C: The southernmost and lowest area of the site, 34m or 60m through the residential – terrace housing & apartment buildings zone.

“The underlying zone of the proposed new precinct under the notified proposed unitary plan is mixed housing suburban & mixed housing urban. Those zones provide for a maximum building height of 8m & 11m respectively, and yard controls ranging from 1.3m to 2.5m. The proposed new precinct would more than double the maximum building height limits from those proposed in the underlying zones. The zone controls for building height & yards are set at levels that are appropriate for the zone. A proposal to exceed the height limits can be pursued through a resource consent application. The resource consent process would involve assessment of any dominance, privacy & shading effects on the surrounding neighbourhood.”

Fairview Avenue to the Westfield mall at Albany – across State Highway 1, past the Albany bus station, 2.2km.        

Whether or not one planner’s evidence was unfairly submitted, the panel’s suggestion that a proposal to exceed height limits could be pursued through a resource consent application was an abysmal failure to acknowledge 15 years of applications, litigation & decisions relating to more intensive use of land just 2.2km from the Westfield mall at Albany, and on a road where the first serious attempt at intensification was undertaken in the 1980s.

The hearing panel said evidence of Auckland Council planner Terry Conner explained why the council didn’t support the change of zoning Mr Farquhar sought: “In summary, it is inappropriate to encourage more intensive residential development in this area without appropriate assessment of the effects.”

Hearings panel chair David Kirkpatrick, now an Environment Court judge, heard plenty of evidence about intensification of this site in 2013, as a council hearing commissioner.

Ms Conner’s evidence to the hearings panel in January 2016 highlighted these points:

  • Do not support change to terrace housing & apartment buildings of either site, due to access concerns, but support an alternative change for 39 Fairview Ave from single house/mixed housing suburban to solely mixed housing suburban to avoid split zoning. Mixed housing suburban is an appropriate zone for properties not close to centres and the regional freight network to recognise the planned suburban built character of the area. Mixed housing urban is proposed to be retained on 56 Fairview. Access to much of this area is constrained by a 1-lane bridge and is not conducive to a safe pedestrian walk to public transport. Retention of the respective zones and the proposed change to mixed housing suburban are the most appropriate ways to achieve the objectives of the mixed housing suburban & mixed housing urban zones and gives effect to the regional policy statement, and
  • The outcome of the Environment Court hearing of the proposed Auckland Transport requirement for improvements at Medallion Rd, currently underway, may have a material impact on this issue.

Panel agreed with potential, but adopted council conclusions

The panel said it agreed with Mr Farquhar that “this site has considerable potential for residential development,” but said it wasn’t convinced by the evidence that a precinct as proposed “is necessary or appropriate. The panel supports the evidence on behalf of the council in opposing the precinct provisions.

“The panel has instead agreed with the submitter [Mr Farquhar] that a more intensive zoning is appropriate and has recommended that the entire 8ha site be rezoned residential – terrace housing & apartment buildings zone. The proposed business – mixed use zone for a portion of the land is not supported in this location, which is relatively close to but physically separated from the nearby metropolitan centre at Albany. If any future specific proposal seeks to exceed the height provisions of that zoning, the panel considers that such a proposal would need to be tested by way of a resource consent application.

“The panel is confident that the Auckland-wide provisions, together with the provisions of the residential – terrace housing & apartment buildings zone, will appropriately enable the future development of this site, give effect to the regional policy statement and achieve the purpose of the Resource Management Act 1991.”

The panel then set out its formal recommendations & reasons: “The panel, having regard to the submissions, the evidence & sections 32 & 32AA of the Resource Management Act 1991, recommends that the Albany 5 precinct not be adopted. The rezoning of the land within the proposed precinct to residential – terrace housing & apartment buildings zone is considered the most appropriate way to enable the development of the proposed precinct site and to give effect to the regional policy statement and achieve the purpose of the Resource Management Act 1991.”

A straightforward proposal

Mr Farquhar’s summarised evidence was that the site was eminently suitable for intensification: “This precinct is located between Oteha Valley Rd & Fairview Avenue east of Albany Town Centre. It involves nearly 8ha of greenfield land which is fully serviced and is close to community facilities, employment & transport infrastructure. The precinct presents a rare opportunity for comprehensive development for intensive apartment living together with a mixed use commercial centre on Oteha Valley Rd that serves the adjacent residential catchment.

“A degraded section of the Waikahikatea Stream flows through the site parallel to Oteha Valley Rd, in particular along the interface between sub-precincts A & B. There is potential for this part of the stream corridor to be redeveloped as part of a comprehensive development to provide significant environmental & amenity benefits for the future precinct community as well as effective connections to the surrounding areas.

“Active investigation of development of this land has been underway since 2001.

“There are several sub-components to the precinct (called sub-precincts) where particular outcomes can be achieved through objectives & policies, however the intention is to ensure that while development may occur in stages there is integrated development with each sub-precinct to secure the objectives & policies for this precinct.

The landform & size of the precinct means that it could be capable of accommodating taller buildings than the underlying zones in order to enable the achievement of a vision for the site that includes:

  • Extensive redevelopment of the stream corridor along the interface between sub-precinct A & B with intimate connection to adjacent activities
  • Clear & generally flat pedestrian connections through & within the precinct
  • Maximising underground carparking for residents & the commercial activities
  • Maximising functional communal open space through a range of structured spaces
  • Strong community focus with a range of community facilities such as gym, swimming pool, childcare
  • A mixed use centre providing shops, cafés & restaurants serving not only the precinct but wider catchment
  • Access & mobility-friendly design throughout the precinct, and
  • Planned points of vehicle access from both Fairview Avenue & Oteha Valley Rd.

“The purpose of the precinct is to provide a policy & rule framework that encourages & supports building efficiencies only available to such large, fully serviced sites and realises the community potential that stems from a comprehensive & integrated development, including benefits to the wider catchment.”

Mr Farquhar’s proposals for the 3 sub-precincts were:

  • Sub-precinct A, most of the site, is suited to high density residential apartment living
  • Sub-precinct B, the land fronting Oteha Valley Rd, is suited to commercial & retail service activities, with apartments above ground-floor level, and
  • Sub-precinct C, the southern part of the site, is suited to high density apartment living; the boundary between sub-precincts A & C is the easterly side of the proposed Medallion Drive extension as proposed by Auckland Transport.

Following a revision by the High Court of its original decisions, the Court of Appeal ruled that costs should be re-apportioned in accordance with the appeal outcome.

Links:
Court of Appeal decision 21 December 2018, North Eastern Investments Ltd & Heritage Land Ltd v Auckland Council (2018 NZCA 629)
Independent hearings panel recommendations, 22 July 2016, Changes to rural urban boundary, rezoning & precincts, annexure 4 precincts north (at page 158)
Auckland Transport, Albany developments

Earlier stories:
27 January 2016: Commissioner agrees long designation period for link road above Oteha Valley, but supports landowner’s fast-track proposal
20 September 2013: Plan change above Oteha Valley approved
16 September 2013: 420-plus homes ready to go, but council might take decade putting road to elsewhere through site
9 May 2007: Rezoning to give greater density above Oteha

Attribution: Court of Appeal, hearings panel.

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Updated: 5 (now 7) of 14 sell at Bayleys’ Auckland commercial auction, 3 of 3 in Tauranga

Published 25 October 2018, updated 29 October 2018 & 13 January 2019:
5 of the 14 properties were sold at Bayleys’ Total Property commercial auction on Wednesday and 5 attracted no bid.

At the agency’s Tauranga auction, all 3 properties were sold under the hammer.

Update 1: One property has been sold post-auction – a takeaway outlet in the Wairau Junction retail centre. The outcomes for 2 of the Auckland properties were transposed – for Ellerslie & Blockhouse Bay – and have been corrected below.

Update 2: The manager’s unit in The Sands apartment complex at Onetangi on Waiheke Island was sold just before Christmas, after attracting no interest at auction.

CBD

Chancery

Chancery Square, 44 Courthouse Lane, unit A206:
Features: 45m² unit leased to property management company
Rent: $33,500/year net + gst + outgoings
Outcome: sold for $380,000 at an 8.82% yield
Agents: Mike Adams & Jean-Paul Smit

Queen St

Mid-City, 239 Queen St, unit 1Y:
Features: m²,
Rent: $27,360/year net + gst, occupied by hair salon, lease term runs to April 2021 with further rights of renewal
Outcome: withdrawn from auction
Agent: Oscar Kuang

Hauraki Gulf islands

Waiheke Island

Onetangi

Updated: The Sands, 141 The Strand, unit 1:
Features: 104m² manager’s unit in the Sands apartment complex
Rent: $28,723/year net + gst + outgoings
Outcome: passed in without a bid at auction in October, sold in December for $525,000 + gst at a 5.47% yield
Agents: Brian Caldwell & Mana Tahapehi

Isthmus east

Ellerslie

Updated: 101 Main Highway, unit 12:
Features: 272m² Asian supermarket at Ellerslie shopping centre, 10 parking spaces
Rent: $60,000/year net + gst, 5-year lease in place with 2 5-year rights of renewal
Outcome: passed in at $800,000 (2 results transposed – originally posted as $2.7 million), sold in November for $820,000 at a 7.32% yield
Agents: Oscar Kuang, Beterly Pan & Nicolas Ching

Onehunga

222 Onehunga Mall:
Features: 273m² site, 2-storey building, seismic rating 75% new building standard, local town centre zoning has 27m height control
Rent: commercial & residential tenants
Outcome: withdrawn from auction
Agent: Oscar Kuang

Parnell

29B Bath St:
Features: 175m² site, 139m² commercial unit, parking space
Rent: $42,000/year net + gst current contract, 2 2-year rights of renewal
Outcome: no bid
Agent: Millie Liang

Isthmus west

Blockhouse Bay

Updated: 35 Margate Rd, flats 1-6:
Features: 2497m² site, 6 2-bedroom residential units, each of about 55m² & on separate titles, parking space each, offered in one package
Rent: $200,000/year net + gst from 2-year lease
Outcome: passed in at $2.7 million (2 results transposed – originally posted as $800,000)
Agents: Quinn Ngo, Matt Lee & James Chan

Eden Terrace

1 Exmouth St:
Features: 665m² vacant section on Newton Rd corner, leased to Wilson Parking, mixed use zoning
Rent: $21,495/year net + gst, early termination clause
Outcome: withdrawn from auction
Agents: Owen Ding, James Chan & Jarrod Qin

Pt Chevalier

1110 Great North Rd, unit D:
Features: 345m², town centre fruit & vegetable shop + parking, leased to PTC Fresh NZ for 5 years from December 2016 with 2 5-year rights of renewal
Rent: $108,312/year net + gst
Outcome: sold for $1.55 million at a 6.99% yield
Agents: Nicolas Ching, Quinn Ngo & James Chan

350 Pt Chevalier Rd:
Features: 696m² site zoned business – neighbourhood centre, housed greengrocery for over 50 years
Outcome: sold with vacant possession for $1.87 million at a land value of $2686/m²
Agents: John Procter, Alan Elliott & Cameron Melhuish

North-east

Orewa

Tamariki Plaza, 1-19 Cammish Lane, unit J:
Features: vacant 190m² commercial unit, one parking space + share of 35 parking spaces
Outcome: passed in at $700,000
Agents: Mustan Bagasra

Rosedale

101 Apollo Drive, unit D:
Features: vacant 120m² ground-floor office unit, 4 parking spaces
Outcome: auction postponed
Agents: Tonia Robertson & Jane McKee

Rosedale Retail Centre, 94 Rosedale Rd, unit 2:
Features: 73m² shop at entrance to zero-vacancy retail centre
Rent: $37,520/year net + gst + outgoings
Outcome: sold prior
Agents: Eddie Zhong, Steven Liu & Meng He

Wairau Valley

18 Ashfield Rd, unit D:
Features: industrial unit, 110m² ground floor, 30m² storage above, monthly tenancy
Outcome: sold for $440,000
Agents: Trevor Duffin & James Yu

65-71 Porana Rd, unit E:
Features: 133m² unit occupied by Hollywood bakery
Rent: $55,000/year net + gst + opex, new 6-year lease
Outcome: auction postponed
Agents: Adam Curtis, Damian Stephen & Steven Liu

Updated: Wairau Junction, 162-178 Wairau Rd, unit 7:
Features: 45m² kebab outlet
Rent: $30,600/year net + gst + outgoings
Outcome: passed in at $500,000, sold post-auction for $550,000 at a 5.56% yield
Agents: Andrew Lin & Ranjan Unka

North-west

Henderson

192 Universal Drive, unit A1:
Features: 756m², corner store in Lincoln North Shopping Centre, 7-year lease to Super Cheap Auto NZ from July 2016, annual fixed 3% rental increases & one 5-year right of renewal
Rent: $225,221/year net + gst, 3% annual increases
Outcome: sold for $3.93 million at a 5.73% yield
Agents: Matt Lee, James Chan, Quinn Ngo, Terry Kim & David Han

South

Clendon Park

439 Roscommon Rd, unit 2:
Features: 97m² retail unit, tenant Clendon Foodmarket
Rent: $41,600/year net + gst, 6-year lease from 2015
Outcome: no bid
Agents: Matt Lee, Quinn Ngo & Piyush Kumar

439 Roscommon Rd, unit 3:
Features: 97m² retail unit, tenant Crown Liquor
Rent: $43,201/year net + gst, 4-year lease from 2016, rights of renewal
Outcome: no bid
Agents: Matt Lee, Quinn Ngo & Piyush Kumar

South of the Bombays

Bay of Plenty

Bethlehem

272A State Highway 2:
Features: 809m² site, 305m² 2-level commercial building, anchor ground-floor pharmacy tenancy, smaller dental tenancy above on leases renewed until 2021 plus further renewals
Rent: $62,730/year net + gst
Outcome: sold for $1.26 million at a 4.98% yield
Agent: Myles Addington

Judea

66 Koromiko St:
Features: 2536m² industrial site, 1519m² standalone building comprising 1123m² of warehouse & workshop space, 4 large roller doors; the balance 2 levels of offices, showroom, storage & amenities; tenant Paramount Stainless has recently renewed for the next 3 years with one final right of renewal to 2024
Rent: $122,000/year net + gst
Outcome: sold for $1.8 million at a 6.78% yield
Agent: Graeme Coleman

Tauranga:

199, 207 & 213 Cameron Rd:
Features: 2192m² redevelopment site zoned city centre, allowing 19m² building height, next to central fire station on main arterial, car dealers have operated from site since the early 1970s, 2 tenancies expiring in August 2020
Rent: $190,715/year net + gst
Outcome: sold for $6.25 million + gst at a 3.05% yield, land value $2851/m²
Agents: Lloyd Davidson & Laura Taylor

Coromandel

Thames

517 Pollen St:
Features: 1521m² site, 1410m² building occupied by multiple tenants including NZ Post Ltd on long-term lease, 16 parking spaces
Rent: $107,717.53/year net + gst, multiple tenants
Outcome: no bid
Agents: Millie Liang & Josh Smith

Attribution: Agency release.

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Home consents close to 33,000 but slip in November

Consents for new homes nationally & in Auckland fell in November after picking up in the previous 12 months from a slowdown in 2016.

Consents nationally were up 5.3% over 12 months but fell short of an annual tally of 33,000, at 32,783.

The shifts were greater in Auckland – down 19% for the month but up by the same percentage over 12 months.

The annual figure for residential alterations & additions nationally topped $2 billion/year, but a slightly lower figure for that category of work for the month took the total for all new residential work a fraction lower than for the previous 12 months.

Standalone housing’s share of consents bounced back from a sharp drop last November but was still down nearly 4 percentage points for the year at 64.2%.

Consents for non-residential construction topped $7 billion/year for the first time.

Cycles & migrants

The annual residential tally of 32,783 consents is just short of the June 2004 peak of 32,851, which occurred during an immigration spike.

This time round, the immigration peak has already passed, reducing the clamour for more housing. That peak of 72,402 was reached in the year to July 2017. In the 12 months to October 2018, the net inflow had fallen by more than 10,000 to 61,751 – around the level in 2015, the second year of a very large 5-year ramping up of immigration.

Over those 5 years, the net inflow of migrants fell just short of 313,000. Over the previous 6 years, which included the global financial crisis & 2 years of net outflows, the net population gain from immigration was just over 50,000.

Consents for new homes got down to 13,529 in the November 2011 year – just over half the number achieved in 2007, down 15% from 2010 and the bleakest period of the global financial crisis. In October 2014, for the first time in 5 years, the annual consent rate just made it over the 20,000 mark (to 20,037).

Statistics NZ has scheduled the next release of migration numbers for Friday 25 January.

The national residential consent numbers for November 2018 & the year to November (previous November & year in brackets):
Total consents for new homes: 3120 (3262), down4.4%; 32,783 (31,123), up 5.3%
Total values for new homes: $1.13 billion ($1.12 billion), up1.3%; $12.1 billion ($11.5 billion), up 5.2%
Alterations & additions: $164 million ($184 million), down 10.7%; $2.02 billion ($1.98 billion), up 2%
Total value for new homes, plus alterations & additions: $1.298 billion ($1.302 billion), down 0.4%; $14.1 billion ($13.5 billion), up 4.8%
Standalone homes: 2009 (1870), up 7.4%; 21,057 (21,178), down 0.6%
Apartments: 226 (543), down 58.4%; 3518 (3137), up 12.1%
Retirement village units: 215 (272), down 21%; 1838 (1969), down 6.7%
Suburban townhouses & flats: 670 (577), up 16.1%; 6370 (4839), up 31.6%
Standalone share of consents: 64.4% for the month (57.3%); 64.2% for the year (68%).

Around Auckland, there were some big shifts within wards, for the month and for the 12 months:

  • Consents over the whole region fell 19% for the month, but rose 19% over 12 months
  • Waitemata (which includes the central city and therefore is dominated by apartment consents) fell 84% for the month, 70% over 12 months, and was also well down compared to 2016
  • Consents were much higher for month & year in 6 wards – North Shore, Waitakere, Whau, Albert-Eden-Roskill, Manukau & Manurewa-Papakura
  • Consents were much lower for month & year in 2 wards – Waitemata & Gulf, Mangakiekie-Tamaki
  • Monthly & annual figures were a mix of up & down in 3 wards – Orakei, Howick & Franklin.

Auckland residential consents for November 2018, compared to November 2017, and the latest 12 months compared to the previous 12 months (percentages for some of the more notable changes):
Region: 1172 (1450), down 19.2%; 12,800 (10,731), up 19.3%
Rodney: 68 (89); 770 (1056), down 27.1%
Albany: 224 (255); 2496 (2466)
North Shore: 48 (25), up 92%; 880 (484), up 81.8%
Waitakere: 125 (66), up 89.4%; 908 (537), up 69.1%
Waitemata & Gulf: 61 (388; 155 in November 2016 – down 84.3% from November 2017, down 69.6% from November 2016); 858 (1365; 1125 in the November 2016 year – down 37.4% from the November 2017 year, down 23.7% from the November 2016 year)
Whau: 72 (34), up 111.8%; 631 (312), up 102%
Albert-Eden-Roskill: 71 (36), up 97.2%; 949 (703), up 35%
Orakei: 45 (67), down 32.8%; 418 (261), up 60.2%
Maungakiekie-Tamaki: 77 (138), down 44.2%; 612 (746), down 18%
Howick: 74 (127), down 41.7%; 813 (594), up 36.9%
Manukau: 139 (90), up 54.4%; 1154 (451), up 55.9%
Manurewa-Papakura: 115 (88), up 30.7%; 1623 (952), up 70.5%
Franklin: 53 (47), up 12.8%; 688 (804), down 14.4%

Retail & hospitality consents jump, education dips

Statistics NZ construction statistics manager Melissa McKenzie said consents for non-residential construction topped $7 billion in 12 months for the first time  on record, rising by $450 million (5.4%) from the previous 12 months.

Consents for shops, bars & restaurants rose from $717 million over the 12 months to November 2014 to $796 million in 2017, then jumped 37% in the latest period to $1.09 billion.

Consents for education buildings have totalled just over $1 billion/year for the last 4 November years, but this was the lowest of the 4 at $1.05 billion (the range has been up to $1.17 billion).

All construction for November 2018 compared to November 2017, and the latest 12 months compared to the previous 12 months:
Total: $2.2 billion ($1.88 billion), up 17%; $21.6 billion ($20.5 billion), up 5.4%
Non-residential: $831 million ($549 million), up 51.5%; $7.05 billion ($6.6 billion), up 6.6%.

Attribution: Statistics NZ.

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On the move, December 2018

Alexander moves from Morrison to SkyCity
SkyCity Asian sales role
Ex-Gaze team sets up Interspace
McDermott exits Reserve Bank for Motu in March
Barnett returns to AlexanderDorrington
Winkelmann appointed Chief Justice
Aurecon names new leader for energy, resources & manufacturing business
New head for Aurecon Australia/NZ among global appointments
Super Fund appoints investment leader
Hoerler joins Reserve Bank leadership team
PFI leaders get new titles as independent contracts end
Torrie joins Colliers
Graham to head AMP Capital NZ
Affleck appointed as team leader
Real Estate Institute appoints 3 life members

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

21 December 2018:

Alexander moves from Morrison to SkyCity

SkyCity Entertainment Group Ltd has appointed Peter Alexander to the newly created role of chief property officer, effective from no later than 18 March 2019, following his departure this week from HRL Morrison & Co Ltd, where he was director of New Zealand private equity real estate for the last year. At SkyCity, he will be responsible for the group’s property investment & development activities in New Zealand & Australia.

Mr Alexander has 30 years’ experience in investment management, primarily in property investment & development, in New Zealand & overseas. Before his year at Morrison & Co, he was chief executive of Stride Property Group for 3 years and property general manager for Auckland International Airport Ltd for 5 years.

One of his earliest ventures into senior management was at Property For Industry Ltd, where he was general manager for 5 years. He followed that with 3 years setting up a private equity real estate funds management business for AMP Capital Investors (NZ) Ltd and beginning investment in it, and was general manager of acquisitions & new business for Goodman Property Trust manager Goodman (NZ) Ltd for 2 years.

Mr Alexander is a trustee of the Dilworth Trust Board, chairs community housing provider Homes of Choice Ltd and is a non-executive director of HLC (2017) Ltd (the former Hobsonville Land Co Ltd, now with an expanded role).

Mr Alexander is a former member of Auckland City Council’s Property Enterprise Board and a former Auckland branch chair of the Property Council. He graduated from Auckland University with a bachelor of property degree in real estate in 1988.

SkyCity Asian sales role

SkyCity Entertainment Group Ltd has appointed John Chong to the newly created role of Asian sales & commercial strategy president, reporting to the group international gaming general manager, effective from 1 January. Mr Chong is based in Hong Kong and was most recently international marketing president for The Star Entertainment Group. He’s worked in the gaming sector in Asia for Melco Crown, Caesars, Sands China & Naga Corp.

18 December 2018:

Ex-Gaze team sets up Interspace

Rob Wesley & Sam Kenny have set up design & build company Interspace Commercial Holdings Ltd, with Jeff Wesley as an executive director, Mark Wheeler as finance manager and Lindsey Heileson as project manager.

Rob Wesley has left Gaze Commercial Ltd after 3 years as Auckland commercial manager. He held business development & sales manager roles during 8 years in London, after a short stint as a locum broker for ING Life in Auckland.

Mr Kenny was a project manager at Gaze Commercial for 2 years after being a designer at 2 London studios in 2009-10, 3½ years as a designer at CTRL Space Ltd & 2 years as senior quantity surveyor at Total Property Worx Ltd.

Jeff Wesley headed Turners Auctions for 8 years and was Turners & Growers Ltd managing director for 7 years, retiring in 2012.

Mr Heileson was a project manager at Gaze Commercial for 18 months after 6 years as operations manager at Image Interiors Ltd.
Link: Interspace

McDermott exits Reserve Bank for Motu in March

Reserve Bank chief economist Dr John McDermott will leave the bank for the third time next year to join the economic research institute Motu.

He rejoined the bank in June 2007, heading its economic function, and will stay on until the bank issues its monetary policy statement in February.

In the Reserve Bank’s leadership restructure in November, Dr McDermott, who’d been assistant governor & head of economics, accepted the role of chief economist & head of department for economics in the economics, financial markets & banking group. He was not a member of the new senior leadership team.

Governor Adrian Orr said today Dr McDermott “has been an incredibly loyal & influential member of the Reserve Bank team, and has made a valuable contribution to the management of monetary policy”.

Dr McDermott was an economist at the Reserve Bank from 1988-90 after graduating from Auckland University with a BSc & MCom in economics. In 1994 he graduated with his doctorate in economics from Yale University in the US, worked as an economist at the International Monetary Fund for the next 4 years, and was a manager in his second stint at the Reserve Bank from 1998-2001.

He was the National Bank’s chief economist until 2006, and an associate professor at Victoria University of Wellington through to his third period at the Reserve Bank.

Barnett returns to AlexanderDorrington

Angela Barnett rejoined law firm AlexanderDorrington in September, after leaving in 2003 to start her family and run a property management business. She’s a solicitor with over 15 years’ experience, whose passion for property has defined her career, giving her both client-side & law firm experience.

She’s bought various residential properties in Auckland and also project-managed several residential subdivision projects.

As a solicitor, Ms Barnett has acted for a wide range of clients, including commercial & residential property developers, property investors, companies & organisations with extensive leasing portfolios, and private clients. Having also worked for a large law firm, Ms Barnett was involved in the acquisitions & disposals of commercial property, subdivisions, property development projects, commercial leasing, vendor & purchaser due diligence investigations, advising clients & managing their property portfolios. She also practised in the UK.

Winkelmann appointed Chief Justice

Justice Helen Winkelmann was appointed Chief Justice yesterday, and also as a judge of the Supreme Court.

Prime Minister Jacinda Ardern announced the appointment, effect 13 March on the retirement of Dame Sian Elias.

Ms Ardern said: “The consultation process highlighted the enormous esteem Justice Winkelmann is held in by the legal community. There was a high degree of consensus from all quarters for her appointment.”

Ms Ardern said Justice Winkelmann’s peers, and the profession, recognised her “for her superior intellect, her judicial instinct & experience, coupled with strong leadership, qualities that I am sure will make an outstanding chief justice.”

Justice Winkelmann graduated from Auckland University in 1987 with an LlB & BA in history and began work as a law clerk with Auckland firm Nicholson Gribbin (later Phillips Fox, now DLA Piper). In 1988, at age 25, she became the first female partner and one of the youngest partners ever in the firm’s then 117-year history.

In 2001 Justice Winkelmann left Phillips Fox to join the independent bar, specialising in commercial litigation, insolvency & medico legal. She was appointed a High Court judge in 2004 and chief High Court judge in 2009. In 2015 she was appointed to the Court of Appeal.

Aurecon names new leader for energy, resources & manufacturing business

Melbourne-headquartered global engineering & infrastructure advisory company Aurecon Group Pty Ltd appointed Paul Gleeson yesterday as managing director of energy, resources & manufacturing.

Incoming chief executive William Cox said Mr Gleeson would lead Aurecon’s business in Australia, New Zealand, Asia & Africa, pursuing opportunities to innovate as each industry undergoes rapid change: “Paul previously led our energy business on Australia’s east coast, driving the significant growth in our core business and establishing our energy advisory business over the last 5 years. He will remain focused on driving our development, now across all of energy, resources & manufacturing sectors globally.”

Mr Gleeson has worked on some of the most significant projects in the Australian energy market, advising on the acquisition of TransGrid; the development, design & delivery of Australia’s largest solar farms; and the ongoing implementation of the South Australian energy plan, which led to the installation of the world’s largest lithium-ion battery.

Mr Gleeson said: “As energy systems transform the world over, it’s critical that key agencies collaborate to look at the system as a whole, shifting their focus to what is best for consumers in relation to affordability, reliability & sustainability. This is particularly relevant given the rising use of renewable energy in Australia, creating a greater need for collaboration between industry & the Government to achieve integration of infrastructure. We see this clearly on the energy storage projects we are involved with, both battery & pumped hydro.”

He said the priority for New Zealand was to consolidate the region’s strong manufacturing & energy business and help clients implement new technologies & digital solutions to optimise their processes, and transition to the production of higher value products.

“We’re seeing considerable potential as we embed our advisory practices more closely with our technical offerings for our energy, resources & manufacturing business areas, specifically programme advisory & digital advisory, to help asset owners optimise their operations.

“In Africa, our focus for the resources sector will be building on our great track record & solid opportunities throughout sub-Saharan Africa, while for the energy sector it will be about supporting clients through some significant challenges in the next few years.”

Mr Gleeson replaces Dr Alex Wonhas, who’s been appointed as a senior executive at the Australian Energy Market Operator.

Mr Gleeson is a fellow of the Institution of Engineers Australia and a graduate of the Australian Institute of Company Directors. He holds a certificate in design-led innovation from Stanford University and a bachelor of engineering degree from the Queensland University of Technology.

New head for Aurecon Australia/NZ among global appointments

 The new global chief executive of engineering & infrastructure advisory company Aurecon Group Pty Ltd, William Cox, has made 4 senior appointments since he was named to the top job on 20 November, although he doesn’t actually take up his appointment until 1 February.

The latest of them (details above) is to appoint Paul Gleeson as managing director of energy, resources & manufacturing.

On 10 December, Mr Cox added 2 more female senior leaders to Aurecon’s global executive leadership team, appointing Louise Adams as managing director for Australia & New Zealand and Francoise Merit as global chief financial officer.

Mr Cox announced his intention to continue Aurecon’s rapid growth & continuing diversification across digital, advisory & Asia, following record profit margins over the last 3 years. He sees immense potential in transport infrastructure, the built environment & the fast-growing data centre sector.

Mr Cox is a civil engineer with over 30 years’ experience in transport, aviation & infrastructure in Australia & the UK, and has just completed a term as Aurecon’s managing director for Australia & New Zealand.

Ms Adams takes over that role from him on 1 February after being regional director responsible for Aurecon’s South Australian & Victorian practice and the first female member of Aurecon’s global board.

Ms Adams has extensive experience as a project manager & chartered civil engineer, leading major civil & multi-disciplinary projects in the UK, Australia, Ireland, Iran, India, Malaysia, Thailand, Laos, Singapore, Guyana, North America, Pakistan, Libya, Qatar & the UAE. She headed Aurecon’s Victoria & South Australian operations for the last 3 years, became the first Australian woman on the group’s global board in 2013 and is global spokesperson for women in leadership. In 2016, she was highly commended as female champion of change in Consult Australia’s excellence awards and this year she was awarded a chief executive women scholarship to attend the Wharton Business School in Philadelphia.

The new global chief financial officer, Francoise Merit, was appointed chief financial officer for Australia & New Zealand in February 2018. Her predecessor in the global role, Andrew Muller, has become chief operating officer.

Ms Merit finished an 11-year career at French solutions group Thales SA’s Sydney office as finance general manager in February, following 4 years in Australian defence industry finance.

Mr Muller joined Aurecon in 2016 as global chief financial officer after an 18-year career with Lendlease Corp, where he held a range of senior financial management positions in Australia & globally.

Super Fund appoints investment leader

The Guardians of NZ Superannuation, the Crown entity that manages the $39 billion NZ Super Fund, appointed Stephen Gilmore on 12 December as chief investment officer. He’ll join the Guardians in late February and will be a member of the Guardians’ leadership team & investment committee.

A New Zealander, Mr Gilmore has extensive global experience and was most recently chief investment strategist at the $A148 billion Future Fund in Australia, where he held a series of senior investment roles from 2009-18.

Guardians chief executive Matt Whineray, who was chief investment officer until July, said on Friday: “We are delighted to have been able to attract a global investment leader of Stephen’s calibre to the Guardians. The NZ Super Fund is expected to grow strongly over the next few years and Stephen’s experience at the Future Fund, one of the world’s leading sovereign wealth funds, will be invaluable.”

Mr Gilmore said: “I am a great admirer of the NZ Super Fund’s strong investment performance & culture. After many years abroad, I am looking forward to the opportunity to return to New Zealand and make a contribution to the fund’s ongoing success.”

Mr Gilmore will lead a 45-strong team of investment professionals responsible for the appointment & monitoring of the fund’s external investment managers; New Zealand & international direct investment; responsible investment; and asset allocation, including macroeconomic strategy & the Guardians’ strategic tilting programme.

A chartered accountant, he has an MCom in economics from Canterbury University and began his career with roles at Otago University & the Reserve Bank. Mr Gilmore’s career also included periods with Banque AIG, Morgan Stanley, the International Monetary Fund & Chase Manhattan Bank.

Hoerler joins Reserve Bank leadership team 

The Reserve Bank appointed Patrick Hoerler to its senior leadership team last week, as assistant governor & general manager of business operations.

Mr Hoerler joined the Reserve Bank in January 2017 and was most recently its head of risk & audit. In his new roles, he will lead the bank’s digital services, property assets & security teams and have responsibility for the bank’s business continuity office in Auckland.

Before joining the Reserve Bank, Mr Hoerler was Mercury Energy Ltd’s risk assurance officer & previously its treasurer. He’s Swiss, has a background in corporate treasury, finance & international banking, and worked in Switzerland, New York & Singapore before moving to New Zealand.

PFI leaders get new titles as independent contracts end

Property for Industry Ltd has appointed Simon Woodhams as chief executive and Craig Peirce as chief finance & operating officer from 1 January, when they switch from being independent contractors to full-time employees.

Greg Reidy, managing director since 2012, will remain an independent contractor until 30 June 2019, when he will become a non-executive director.

These appointments, announced on 11 December, follow on from the internalisation of the management contract in mid-2017 and are part of the PFI board’s long-term approach to succession planning.

PFI chair Anthony Beverley said: “Greg, Simon & Craig have been instrumental in the growth & positive progress of PFI and its positioning as a leader in industrial property investment in New Zealand.

“We are delighted that Simon & Craig will now be joining PFI’s leadership team on a full-time basis. They both are very experienced executives with a deep knowledge & understanding of our business & the industry we operate in. This is of great value for PFI as we continue to focus on delivering strong, stable returns to our shareholders.”

Mr Beverley said Mr Reidy had played a significant role in PFI’s success, from the formation of the Direct Property Fund in 2003 & its growth to $400 million of assets, through to the purchase of the PFI management contract & merger of the 2 businesses in 2013. PFI now has $1.2 billion of assets.

Torrie joins Colliers

Grant Torrie has joined Colliers International as marketing operations director after 8 years at Fairfax Media NZ Ltd & Stuff Ltd, finishing as head of consumer marketing. His areas of expertise include digital, traditional & services marketing. He’s replaced Jeremy Graham, who’s stepped down after 8 years to spend more time with family. Mr Graham also spent 3 years as commercial & industrial marketing manager at Bayleys.

Bevan Graham to head AMP Capital NZ

AMP Capital Investors (NZ) Ltd has appointed Bevan Graham as New Zealand managing director & chief economist, effective 1 January. He’s been chief economist since 2011 after a career that began in 1988 as an economist for the ANZ Bank, included similar roles at Westpac Banking Group & AXA Global Investors and 2 years as chief economic advisor for the National Party.

Mr Graham will replace AMP NZ managing director Grant Hassell, who’s moving to a new role as AMP Capital’s global head of fixed income but will remain on the AMP NZ board.

Affleck appointed as team leader

Engineering & design consultancy Harrison Grierson Consultants Ltd has appointed Peter Affleck as building services team leader at its Wellington office. He was a senior associate at Norman Disney & Young in Wellington for the last 13 years.

Mr Affleck is a mechanical engineer specialising in building services with over 20 years’ experience in New Zealand & London. He has specialist expertise in mechanical services (HVAC) & fire protection services design consultancy work, as well as project leadership. He was project leader & mechanical engineer on the long-running & complex NZ Post House project in Wellington, and project leader & lead mechanical engineer for the energy-efficient retrofit of the historic Te Puni Kokiri House.

Real Estate Institute appoints 3 life members

The Real Estate Institute has appointed 3 new life members – Brian Waldegrave, Euon Murrell & Graham Crews.

Mr Waldegrave has been involved in Bay of Plenty real estate for 40 years, and was a shareholder & director of Eves Realty Ltd, Realty Services Holdings Ltd & Success Realty Ltd, a member of the institute’s Waikato/Bay of Plenty/Gisborne district committee and chaired the investigation sub-committee. He’s been a fellow of the institute since 2008.

Mr Murrell has been in the real estate industry in Wellington for 35 years, and extensively involved with the institute for 20 years. He was on the Wellington district committee for 10 years, 8 as president, was on the old institute council for 2 years, and a region 3 director for 8 years, retiring in 2016. He was made a fellow of the institute in 2012.

Mr Crews took up real estate sales in 1986, building his way to his current role as a compliance trainer, mentor & arbitrator. He was instrumental in the industry’s liaison with the Government to develop the new Real Estate Agents Act in 2007-08 and has often appeared as an expert witness in front of various judicial bodies. He’s been an institute fellow since 2004.

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

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Vital Healthcare Property dissidents show muscle, and their arguments may yet hold sway

Dissident corporate unitholders in the Vital Healthcare Property Trust got majority support for 3 of their 5 proposals put to the annual meeting yesterday, but failed in the bid to get their nominee elected to the management company board.

Nevertheless, the support the trio of corporate dissidents amassed may be enough to reshape a review sought by the manager, and start the rebalancing they advocate between returns to the manager & distributions to unitholders.

Under the NZX structure for listed trusts, investors hold units in the trust but control lies with the manager. At Vital, the manager is NorthWest HealthcareProperties Management Ltd, a 100% subsidiary of the NorthWest group of Toronto headed by Paul Dalla Lana. Although the annual meeting was of unitholders in the trust, the board they vote directors to is the board of the manager.

Dissidents tried to get a director elected yesterday, and put 5 proposals which the board declared would be non-binding.

The broad outcomes:

  • Management board candidate Graham Stuart, appointed to the board in November, was re-elected
  • The dissidents wanted the board enlarged to 6 members, the manager & current board resisted. Dissidents’ candidate Paul Mead lost the vote to Mr Stuart, and the dissidents’ proposal to enlarge the board was also defeated
  • Although the dissidents’ 5 proposals were put as part of the business of the meeting, the board had decreed that they’d be non-binding and recommended unitholders vote against the resolutions
  • NorthWest scored marginal support for the first 2 relating to unilateral removal of directors & unilaterally altering the management fee. The third, to realign returns to manager & unitholders, was won 50.5% v 49.5% by the dissidents. The fourth & fifth, to enlarge the board and amend the conflicts of interest policy & board charter, gathered more opposition and were defeated.

The meeting was unusual. The board, having started a review of how Vital’s run and wanting to continue with it, had declared its position in the meeting documents but didn’t push its case, except for management company chair (and thereby trust chair) Claire Higgins saying directors wanted to get on with the review in the way they’d planned it.

Ms Higgins, a Vital/NorthWest director since 2012, succeeded Graeme Horsley as chair in May. After the meeting, but before the votes had been counted, Ms Higgins told me: “I don’t like to get into the trenches. I like to work with people. We’ve got to get NorthWest to agree to the changes, things we brought as independent directors to them.”

She thought NorthWest of Toronto would be receptive to the appointment of another independent director but, as with reviewing policies, “you have to do it in the right way”.

NorthWest’s vote questioned

The ability of NorthWest of Toronto to vote at all was called into question at the meeting because of allegations of conflict, but Ms Higgins said that although that question of law hadn’t been fully resolved, NorthWest’s units would be voted.

Excluding the Toronto holding of 110.8 million units (just under 25% of the total) would have meant NorthWest’s candidate for the board would have been defeated and all 5 proposals put by the dissident corporates would have been carried, though they would still have been non-binding.

The question of conflict has arisen often throughout the 30-odd years that externally managed trusts like Vital have been listed on the NZX, and most of them have changed their ownership & management models.

Vital, and just one other NZX-listed property trust, Goodman, have maintained the model of a trust managed by an external manager, both with large cornerstone unitholdings by the manager’s parent. Goodman parent, trust & unitholders have forged a good relationship in which the Australian parent has at times partnered with the NZ trust, and their transactions have been clearly visible.

The Canadian controlling interest in Vital & its manager has expanded the business exponentially from what, in its first couple of years as the Calan Healthcare Properties Trust, was a rickety, inadequately capitalised listed entity, and under ING and then ANZ Bank control remained a minor entity.

Ironic dissidence

But dissident unitholders at Vital’s annual meeting pointed to the widening discrepancy between returns to the manager and returns to unitholders.

That was ironic, because one of the leading trio of dissidents, ANZ Bank funds management, is a successor to OnePath (NZ) Ltd, the business that sold the Vital management contract to NorthWest in 2011.

And more ironic, because the entity that made that handover possible was another 2018 dissident, the Accident Compensation Corp, which had been calling for Vital’s ANZ-owned manager to be sacked in 2011 but then sold nearly half its 9.1% stake to an ANZ subsidiary.

The third of the corporate dissidents yesterday was Mint Asset Management Ltd.

The director vote

Re-election of Graham Stuart versus election of dissidents’ candidate Paul Mead as an independent director: Mr Stuart 184,312,438 (67.4%) votes in his favour, which exceeded the 89,023,333 (32.6%) votes cast in favour of Mr Mead. As they were contesting one board seat, Mr Stuart was elected.

Ms Higgins, Andy Evans & Mr Stuart are considered to be independent directors under the NZX listing rules. Chief executive David Carr was appointed to the board on 1 May and has been an executive director. He stood down from the board yesterday, reducing the board from a temporary 6 members to 5. The other 2 are Mr Dalla Lana & Bernard Crotty, of NorthWest in Toronto.

Although the argument looked at times a “them versus us” dispute, the wheels of change had been turning.

The manager confirmed in the meeting notice that it had already established a process to deal with the substance of the dissidents’ first 3 proposals, including a board-led review of management fees in the first quarter of 2019, with the manager’s rights in regard to election or removal of independent directors being suspended for the duration of that review.

Non-binding proposals passed: 
Proposal 1, relating to the election or removal of independent directors: 
For: 137,113,960 (53.9%) Against: 117,412,541 (46.1%) 
Proposal 2, relating to management fees:
For: 137,904,997 (54.2%) Against: 116,647,180 (45.8%) 
Proposal 3, also relating to management fees:
For: 128,475,755 (50.5%) Against: 126,067,548 (49.5%)

Non-binding proposals defeated: 
Proposal 4, relating to board composition:
For: 117,271,395 (46.1%) Against: 137,086,559 (53.9%) 
Proposal 5, relating to policies & procedures:
For: 117,437,126 (46.6%) Against: 134,721,703 (53.4%)

Background

In December 2011, the group Mr Dalla Lana controls, Toronto-based NorthWest Value Partners Inc, bought Vital’s management company from ANZ National Bank Ltd subsidiary OnePath (NZ) Ltd and held 19.66% of Vital’s units until April 2013, when he declared his intention to acquire up to 15.35 million units.

That proposal came 3 weeks after Vital obtained an Inland Revenue binding ruling which increased the limit a large unitholder could go to before the trust’s PIE (portfolio investment entity) status would be affected. Before that ruling, Vital management understood no unitholder could hold more than 20% of the units in the trust if it were to maintain its PIE status. The ruling lifted the limit to 25%.

According to Vital’s 2018 annual report, NorthWest held just under 106 million (24.26%) of Vital’s 437 million units at the 30 June balance date. Subsequent payments & acquisitions have lifted that stake to 110,823,292 units, or 24.91% of the trust.

In addition, NorthWest of Toronto owns Vital’s manager, renamed NorthWest Healthcare Properties Management Ltd in February.

Earlier stories:
6 December 2018: Vital doubles loan to NorthWest for Healthscope acquisition
25 November 2018: Vital Healthcare management fees up for review, new action at Healthscope
23 November 2018: Northwest increases Healthscope stake to 11.1%
9 May 2018: Vital Healthcare’s parent makes new Australian investment

28 February 2018: Vital Healthcare gets revaluation lift
4 December 2017: Vital Healthcare confirms 3 hospital acquisitions & development programme
31 January 2015: Ownership of Vital Healthcare manager moves to Canadian reit
11 October 2013: Dalla Lana lifts Vital stake to 24.11%
5 December 2011: Toronto healthcare specialist North West pays $11.5 million for Vital management, holds 19.8% of trust
21 November 2011: Vital unitholders get a pointless vote while major issues stay up in air
4 November 2011: Canadian investor Dalla Lana buys ACC out of Vital Healthcare
23 September 2011: ANZ halts Vital internalisation after lifting trust stake to 9%
27 April 2011: $14 million buyout price on Vital management contract

Attribution: Annual meeting, annual report, NZX documents.

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Kiwi Property buys site across tracks from Sylvia Park

Kiwi Property Group Ltd has acquired 43 Carbine Rd – across the railway tracks from the Sylvia Park shopping centre in Mt Wellington – for $25 million.

The 22,086m² site has warehousing & yard facilities, is opposite the Sylvia Park train station and is zoned mixed use under the Auckland unitary plan. Kiwi Property bought it with vacant possession.

Chief executive Clive Mackenzie said yesterday it had potential linkages to the shopping centre:  “While we have no immediate plans for the site beyond leasing the existing premises to make use of the warehousing & yard facilities on site, this acquisition will provide future mixed-use opportunities at Sylvia Park.”

Earlier story:
9 October 2017: Kiwi acquires more expansion land at Sylvia Park

Attribution: Company release.

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Stride sells Albany property to Oyster, buys Concourse from Goodman

Stride Property Ltd has unconditionally agreed the sale of one property to property & funds manager Oyster Management Ltd and the purchase of another from the Goodman Property Trust.

The sale:

North-east

Albany

33 Corinthian Drive:
Features: tenant ASB Bank Ltd
Outcome: unconditional agreement for sale for $50.5 million, settlement scheduled for 1 April 2019, representing an initial yield of 5.88% and a 4.7% premium to the property’s value of $48.25 million as recorded in Stride’s September half-year accounts

Stride has committed to undertake $600,000 of upgrade works before settlement.

The sale was signalled earlier this year. Stride chief executive Philip Littlewood said today: “This transaction aligns with Stride’s strategy to recycle capital from non-core assets and into office & industrial assets that we consider will form the base of portfolios that will, in future, become Stride’s new investment management products. We are delighted to end the year with this positive result.”

The purchase:

North-west

Henderson

The Concourse, 1-11 Selwood Rd & 6-12 The Concourse:
Features: 4ha industrial property adjoining State Highway 16 – 1.84ha with established buildings, 9700m² of industrial space, 2.17ha of development land, the former Alloy Yachts premises & an adjoining industrial property
Outcome: sold for $35 million following an unsolicited offer, settlement scheduled for 27 June 2019, initial yield for Stride of 6.1%

Mr Littlewood said: “This acquisition aligns with Stride’s strategic investment focus on growing its portfolio of quality industrial investment property, and builds on the Stride Property Group’s track record of industrial development expertise, following on from its comprehensive development of 6 buildings at O’Rorke Rd, Penrose, and the recently announced development of its property at Springs Rd, East Tamaki.

“Stride focuses on acquiring & developing properties in key industrial locations which are well serviced with connection to significant roading infrastructure. The West Auckland site has immediate access to the Lincoln Rd interchange, with connectivity north via the Western Ring Route and south via the Waterview tunnel.”

Investment management director James Spence, of the Goodman trust’s manager, Goodman (NZ) Ltd, said: “We’ve added significant value since acquiring the asset in 2016, reconfiguring the layout, creating additional yard space and securing new leases. It was a compelling offer from Stride and, rather than complete the development of this property, we’ll be reinvesting in new opportunities elsewhere in Auckland.”

The sale adds about 0.5c/unit to the Goodman trust’s net tangible asset backing.

Earlier stories:
18 July 2017: Goodman settles Henderson purchase
22 October 2012: DNZ confirms purchase of development site between 2 of its Albany buildings
13 August 2012: DNZ buys Corinthian Drive building, conditional on development site

Attribution: Company releases.

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Knauf & USG seek NZ clearance for merger

International building materials manufacturers & suppliers Gebr Knauf KG of Germany and USG Corp of the US have sought Commerce Commission clearance for their merger.

Knauf’s products include plasterboard, cement board, metal profiles, plasters & suspended ceilings. In New Zealand, it imports & supplies products used for modular suspended ceilings & insulation.

USG’s products include plasterboard, cement board, plasters & suspended ceilings. USG is active in New Zealand through its 50% interest in USG Boral Building Products, which supplies plasterboard, suspended ceiling components & other building materials.

In addition to the New Zealand clearance, competition authorities in several jurisdictions, including Australia, the US & Singapore, will assess the proposed merger.

Attribution: Commerce Commission release.

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Augusta Industrial Fund to add 5 properties, seek more investors

Augusta Capital Ltd will re-open the opportunity to invest in the open-ended, unlisted Augusta Industrial Fund Ltd early in 2019.

Augusta bought the first property for the fund in December 2017, added 3 more over the next 6 months and closed its first subscription offer in June 2018 oversubscribed, with $75 million raised.

The NZX-listed promoter & 10% investor in the fund, Augusta Capital, intends to add 5 assets to the portfolio for more tenant & location diversification. The enlarged portfolio is valued at $296 million, has 47 tenants & 99% occupancy.

The fund is managed by Augusta Funds Management Ltd, which has $1.8 billion of assets under management.

A key objective of Augusta Industrial is to deliver sustainable & stable income paid to investors monthly, along with the potential for capital growth.

Earlier stories:
10 December 2018: Augusta Industrial Fund to take over 4 existing Auckland syndicate properties plus one in Christchurch
30 July 2018: Augusta expands its portfolio platform, a different way of managing & seeing property investment
16 June 2018: Augusta industrial fund closes oversubscribed
12 March 2018: Augusta gets agreement to add 4th building to industrial fund
13 December 2017: Augusta buys Wellington property as seed for new industrial fund

Attribution: Company investment notice.

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