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Augusta wants syndicate approval to add third property to new industrial fund

Augusta Capital Ltd said on Monday it had made a conditional offer to the investors in one of its syndicated properties for its new industrial fund to acquire that property. The offer is subject to an investor vote. If successful, this would be the third & final property in the initial portfolio for the launch of the new fund.

Augusta manages the syndicated property at 12 Brick St, Henderson, and portfolio & syndication management subsidiary Augusta Funds Management Ltd has sent a notice of meeting to the investors in that property requesting approval for a sale to the new fund.

Augusta managing director Mark Francis said: “It is a relatively new industrial property constructed in 2009, with a long-term lease of at least 10 years remaining to D&H Steel Construction Ltd – and potentially a further 5 years if the tenant does not exercise the break right it has at 10 years.”

Augusta has scheduled the investor vote for Friday next week, 2 February. The sale would be conditional on sufficient capital being raised under the public offering for the new fund and the existing tenant waiving its right of first refusal.

Mr Francis said if the sale is approved, the new fund will be launched with 3 properties in its initial portfolio – 862 Great South Rd, Penrose; The Hub, Wellington; & 12 Brick St.

That portfolio has a current valuation of $87.85 million, 14 tenants and a weighted average lease term of 7.2 years. Mr Francis expected occupancy to be 99% on settlement.

He expects the initial equity to be raised by the new fund to be between $58-60 million. As previously announced, Augusta will underwrite between $33-35 million of that equity raising and intends to subscribe for at least a 10% stake in the new fund and maintain that holding long-term.

Augusta is preparing a product disclosure statement for the fund, which it expects to be registered in mid-February. Settlement of the acquisition of the initial portfolio is intended to occur on 29 March.

Attribution: Company release.

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Auckland still leads cyclical house sales shift downwards

The Real Estate Institute said yesterday the median house sale price nationally rose 5.8% in December compared to a year earlier, and 6.6% excluding Auckland.

In Auckland, the median rose 1.8% over the 12 months.

The moves were:

Nationally: 5.8%, from $520,000 to $550,000
Excluding Auckland: 6.6%, from $422,000 to $450,000
Auckland: 1.8%, from $855,000 to $870,000.

The cyclical context

Those differences are normal. Auckland habitually leads cycles up, peaks as other centres start to rise, and softens while the rest of the country is still trying to catch up. When everything settles down, the margin between Auckland prices and those everywhere else will be bigger than it was before the cyclical rise.

The difference that is abnormal is that Auckland has been subjected to a hefty population increase for the second time this century – first in 2003-04 under the Clark Labour government, from which it hadn’t fully recovered before the National-led government enabled a new influx into Auckland over the last 5 years, with no attempt on either occasion to spread the growth.

Through a period of 15 years, Auckland’s housing supply has been inadequate to meet demand. For the real estate sector, and for political purposes, that’s been just fine: a tight market encourages competition & price hikes.

The Real Estate Institute said prices rose in 13 of its 16 regions in December, 3 of them to record levels:

Waikato: up 11.7% from $470,000 a year ago & $490,000 in November to $525,000 in December
Bay of Plenty: up 20.4% from $496,500 a year ago & $575,000 in November to $598,000, and
Wellington: up 4.7% from $535,000 a year ago & $550,000 in November to $560,000.

At the other end, prices fell from a year ago in 3 regions:

Marlborough: down 2.1% to $372,000
West Coast: down 1.6% to $185,000, and
Canterbury: down 0.7% to $439,000.

Real Estate Institute chief executive Bindi Norwell said December 2017 was the first time all 7 districts in Auckland (the institute still bases its statistics on the boundaries of the 7 cities & districts that formed the super-city in 2010) had a median price above $700,000.

She said this highlighted “how expensive the city is becoming”. In addition, “North Shore City [as it was] has reached a record median price of $1,113,000. The nearest the price has been to this point previously was $1,105,000 in November 2016.”

Volumes still struggling

The institute said sales nationally fell 10.1% in December from a year ago, from 6567 to 5903; 11.6% excluding Auckland, from 4733 to 4184; and 6.4% in Auckland, from 1808 to 1693.

Nelson was the only region where sales rose from a year ago, from 71 to 76.

The institute’s house price index increased nationally by 3.8% from a year ago to 2655, by 6.8% excluding Auckland, and by 0.7% in Auckland.

Auctions fall away

Auctions’ share of the national market fell from 18% a year ago to 14% – down from 1154 sales to 827.

55% (455) of the December 2017 sales were in Auckland.


The number of properties available for sale nationally increased by 9.3% (from 22,521 to 24,610), and by 2.1% excluding Auckland (from 15,784 to 16,113).

Price bands

Broken into price brackets, the number sold in December fell compared to a year ago in all except the $2-3 million category, which increased by 4.3% (from 92 to 96).

The number sold for less than $500,000 fell 18% (from 3148 to 2577). The latest figure for that bracket represented 43.7% of all sales.

Link: Full Real Estate Institute December report

Attribution: Real Estate Institute release.

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Ardern announces pregnancy

Prime Minister Jacinda Ardern announced this morning that she & partner Clarke Gayford are expecting a baby.

“We’re both really happy – we wanted a family but weren’t sure it would happen for us, in fact, we had been told we would need help. That has made this news unexpected but exciting.”

Ms Ardern said she’d put a programme in place to take a 6-week timeout for the birth, putting Deputy Prime Minister Winston Peters in charge of the country: “I have used the last few weeks to get on with making a plan. Yesterday I met with Deputy Prime Minister Winston Peters, to share the news and to ask him to take on the role of acting prime minister for a period of 6 weeks after our baby is born. Just like when I am overseas, Mr Peters will take on all the functions of prime minister, working with my office and staying in touch with me. I fully intend to be contactable & available throughout the 6-week period when I’m needed.

“Mr Peters and I have a great relationship and I know that, with the help of the rest of the team, we will make this work.

“After 6 weeks, I’ll be back on deck. Clarke & I are privileged to be in the position where Clarke can stay home to be our primary caregiver. Knowing that so many parents juggle the care of their new babies, we consider ourselves to be very lucky.

“I am so looking forward to having an extra role this year, but I am also excited about all of the plans we have as a government to make New Zealand an even better place. That includes work on health, housing, education & child wellbeing (just like the priorities in our 100-day plan). I am looking forward to leading that work, and having a slightly expanded family join me on that journey.

“But for now, bring on 2018!”

Ms Ardern, 37, became prime minister on 26 October, heading a government of Labour & NZ First MPs with support from the Greens.

Attribution: PM’s release.

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Focus on Northcote in push for affordable home development

Government-owned company HLC (2017) Ltd – the former Hobsonville Land Co Ltd – is pushing hard to increase interest in 5 development superlots at Northcote, in keeping with the new government’s desire to get 100,000 “affordable” homes built over the next 10 years, half in Auckland.

Bayleys Real Estate launched an expressions of interest campaign late last year, seeking private sector partners to develop the 1.58ha in the 5 superlots.

Under Labour’s KiwiBuild policy, The Government wants to get 100,000 affordable homes built within 10 years, half of them in Auckland.

HLC has supervised development at Hobsonville Point, in West Auckland, where over 1000 houses have been built in 5 years. On completion, that 167ha masterplanned development will have 4500 houses & over 10,000 residents.

At Northcote, the focus in stage 1 of redevelopment of the state housing block will result in 298 old state houses being replaced by 400 new ones.

For stage 2, HLC, a subsidiary of Housing NZ Corp, appointed Bayleys to release the 5 superlots, which range in size from 2572-3665m². Registrations of interest close on Friday 16 February.

HLC chief executive Chris Aiken said a shortlist of potential home builder partners would be identified by March and the final selection made in April.

55% of the potential 165 homes in the 5 superlots have to be “affordable”, defined as a maximum price of $600,000 for a terraced home, $500,000 for apartments.

On completion, the whole project will provide about 1200 new homes near the Northcote town centre over a 6-year period.

Earlier stories:
19 September 2016: Unitary plan helps lift Northcote housing target to 1200
16 May 2016: Council & Government join forces to redevelop Northcote land

Attribution: Agency release.

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Bay of Plenty agents end year with 8 sales

Bayleys commercial agents in the Bay of Plenty finished 2017 with 8 sales around Rotorua, Tauranga, Tokoroa & Whakatane.

Pictured: The 17 Gateway West storage facility in Whakatane.

South of the Bombays

Bay of Plenty



95 Tallyho St:
Features: 2524m² site in 2 titles, modern 1493m² industrial building, 3 high stud roller doors; leased to Fletcher Steel Ltd for 3 years from August 2017 with rights of renewal to 2029
Rent: $104,000/year net + gst
Outcome: sold for $1.5 million at a 6.93% yield
Agent: Mark Slade

Fairy Springs

25 Bidois Rd:
Features: 1011m² corner site, 1980s-built 350m² storage complex, 10 storage rental units, each with separate roller door access, multiple tenants
Outcome: sold for $268,000 at a 6.57% yield
Agent: Mark Slade


194 15th Avenue, Tauranga:
Features: 414m² site, 4 parking spaces & 1930s 100m² dwelling converted for office use
Outcome: sold with vacant possession for $550,000
Agent: Lloyd Davidson

74 Grey St:
Features: 1060m² prime city centre-zoned site (49m height allowance), 1290m² retail & office building, fully leased to 4 tenants on mixed terms
Rent: $141,187/year net + gst
Outcome: sold for $2.4 million at a 5.88% yield
Agents: Brendon & Lynn Bradley

90 Second Avenue:
Features: 584m² city centre-zoned site, 340m² industrial building occupied by 2 tenants; car valet business occupies rear tenancy and Great Deals Direct Ltd the front, both with leases expiring mid-2018
Rent: $34,632/year net + gst
Outcome: sold for $850,000 at a 4.07% yield
Agent: Lloyd Davidson


24 Swanston St:
Features: 212m² cbd corner site, 2 adjacent retail premises totalling 175m², hair salon business has been in occupation since the premises were built in the 1970s and a sushi store has been in occupation since 2013
Rent: $19,119/year net + gst
Outcome: sold for $220,000 at an 8.69% yield
Agents: Brendon & Lynn Bradley


17 Gateway West:
Features: 2113m² site in the Gateway industrial precinct adjacent to State Highway 30, 1358m² self-storage complex comprising 106 units of various sizes, trading as EastBay Secure Storage
Outcome: sold for $1.5 million at a 7.93% yield
Agents: Brendon & Lynn Bradley

156 The Strand:
Features: 334m² leasehold site in cbd retail precinct, 590m² 2-level, fully tenanted retail & office building; 14-year ground lease with perpetual renewal rights
Rent: $68,000/year net + gst
Outcome: sold for $500,000 at a 13.6% yield
Agents: Brendon & Lynn Bradley

Attribution: Agency release.

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QV says rise in average Auckland home value just $4583 for year

The average residential property value rose by 6.6% ($41,660) nationally last year, according to Quotable Value Ltd’s index.

In Auckland, the rise was just $4583 (0.4%) for the year.

In a few places the movement over the year was downward, including a 0.1% fall in Christchurch.

QV recaps

QV national spokesperson Andrea Rush said the general trend was for slowing in the rate of growth due to loan:value ratio (LVR) speed limits, stricter retail bank lending criteria & uncertainty ahead of the election, but in some areas values rose rapidly while decreasing in others.

Ms Rush said sales volumes fell every month from the 2016 figures. From February-October the drop in sales exceeded 20%/month, before picking up in November, when a post-election late spring surge saw them jump to just 10% lower than November 2016 levels.

“A slowdown in the rate of value growth in the housing market that began in the latter part of 2016 with the introduction of LVR speed limits, requiring a 40% deposit by investors, continued throughout 2017.

“The frenzy in the market of the previous 3 years, induced by high numbers of investors in the market, subsided and we saw a return to more normal levels of activity in housing markets around the country.

“By October, nationwide annual value growth had slowed to 3.9%, the lowest rate of growth seen in 5 years, and for the Auckland region it slowed to -0.6%, the slowest annual rate of growth seen there since Mach 2011.

“High prices, constraints on finance caused by tightening in retail banks lending criteria and higher deposit requirements removed many buyers from the market and sales volumes plummeted.

“Potential housing policy changes in the lead-up to the election also caused uncertainty and people took a wait-&-see approach, causing activity to slow dramatically over the winter quarter, and this resulted in value decreases in many areas.

“The usual annual spring surge was very slow to arrive and listing levels and market activity did not pick up until November and December and this can be seen in both sales volumes and value growth recovering in the last two months of the year.

“The annual rate of value growth recovered to 6.4% in November & 6.6% in December, and sales volumes for November lifted 21.0% higher than in October. This was partly due to buyers delaying purchasing until the election result was decided, and may also have been in part due to some buyers racing to purchase before the new foreign buyers’ ban in December.

“The slight easing in LVR restrictions by the Reserve Bank due this month is likely to help improve activity & demand in the market as we move through the summer months.

“Low interest rates, relatively high net migration & lack of supply means market drivers remain, and we are likely to see values hold for the most part during 2018 in the main centres, but the trend of lower rates of growth is likely to continue.

“However, areas where investors were previously very active may continue to see values drop back where prices remain too high for first-homebuyers, particularly in Auckland, Hamilton & surrounding districts.

“Some regional areas may continue to see stronger value growth than the main centres during the year.”

Below, the dollar figure is the average value for December. The first percentage is for the 3 months to December, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries:

Auckland region, $1,051,762, 1.2%, 0.4%, 92.5%
Rodney, $941,029, 0.1%, 1.3%, 60.4%
North, $961,471, 1.6%, 0.4%, 60.1%
Hibiscus Coast, $921,890, -1.7%, 2.0%, 57.0%
North Shore, $1,226,509, 2.6%, 0.7%, 90.1%
Coastal, $1,405,509, 3.1%, 0.7%, 86.5%
Onewa, $981,844, 2.1%, 0.6%, 97.9%
North Harbour, $1,192,164, 2.1%, 0.6%, 96.2%
Waitakere, $824,271, 1.0%, -1.9%, 94.4%
Auckland City, $1,245,536, 1.6%, 2.2%, 100.1%
Central, $1,085,314, 0.6%, 2.2%, 90.6%
East, $1,575,133, 2.8%, 3.6%, 97.7%
South, $1,100,710, 0.1%, -0.4%, 104.5%
Islands (low volume), $1,161,110, 6.6%, 13.7%, 81.6%
Manukau, $895,606, -0.3%, -1.0%, 95.7%
East, $1,150,996, -0.7%, -0.9%, 93.1%
Central, $695,724, 1.1%, 1.1%, 85.1%
North-west, $769,615, -0.3%, -1.5%, 108.3%
Papakura, $696,713, 2.6%, 2.2%, 93.7%
Franklin, $666,676, 0.5%, 1.0%, 68.5%

Northern border, down country & national:

Far North, $421,582, 3.0%, 11.8%, 5.9%
Kaipara (low volume), $496,551, -3.7%, 6.2%, 25.2%
Hamilton, $543,446, -0.5%, 1.6%, 50.3%
Tauranga, $693,725, 1.0%, 3.2%, 44.1%
Gisborne, $293,346, -0.6%, 8.9%, -1.3%
Wellington region, $628,450, 3.6%, 9.4%, 37.9%
Christchurch, $493,706, 0.4%, -0.1%, 30.1%
Dunedin, $391,098, 2.7%, 10.4%, 36.6%
Queenstown-Lakes, $1,111,995, 3.0%, 8.8%, 61.7%
Total NZ, $669,565, 3.6%, 6.6%, 61.6%

Link to full index: QV house price index for December 2017

Attribution: QV tables & release.

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KGL unveils plans for Hamilton East refurb

KGL Property unveiled plans this week for a $6 million refurbishment of the 1970s-built 1

Clyde St in Hamilton East, to start in mid-2018.

In an innovation by the founders of outdoor gear retailer Torpedo7 Ltd, Luke Howard-Willis & his father Guy, the renovations on Clyde St will create what they think will be the largest modern, shared office space in Hamilton.

The Howard-Willises sold a majority stake in Torpedo7 to The Warehouse Ltd in 2013, and exited completely early last year. 2 months later they bought 1 Clyde St from Hill Laboratories Ltd, which moved to new headquarters in the former NZ Post building on Duke St, Frankton – also owned by the Howard-Willises’ KGL Property.

KGL Property entered a joint venture early this year with Foster Construction Ltd and the partners will work together on the Clyde St refurbishment project.

Foster’s commercial manager, Leonard Gardner, said:  “The building’s main structure will stay as is, but we’ll strip it right down to the concrete and reclad it with modern construction materials. In addition to a new modern look inside, we’ll also install new mechanical & electrical kit through the building. The internal & external facelift will also keep in character with Hamilton East’s unique community & the surrounding buildings.”

KGL commercial property manager Ray George said: “Hamilton East has been revitalised over the past few years, making it the perfect location to host a shared office space.

“The neighbouring Deloitte building opened in 2009, Ebbett Prestige’s Volkswagen & Audi dealership opened opposite in 2015 and the Mavis & Co Café integrates into the precinct’s design. The location gives access to the Waikato River as well as to local amenity such as parks, river walks, cafes & gyms.

“A shared office environment is a great option for businesses as it allows them to expand quickly without the large capital costs of setting up an office with associated infrastructure. The interaction within the common open plan environment also facilitates cross-pollination of ideas.”

The 3-storey building, with 2700m² of floor area, will be able to accommodate 200-

225 staff on site. One of the floors will be the shared space, and the other 2 will be leased to corporate tenants.

Attribution: Company release.

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Updated: Parking space for a millionaire, Vinegar Lane apartment sold

Published 14 December 2017, updated 21 December 2017:
Update: A Vinegar Lane apartment has been sold post-auction (see below under Isthmus west).

A basement carpark space in the Quay Regency building on Auckland’s downtown waterfront sold at Ray White Apartments auction for $265,000 today – $9815 for every square metre of its 27m² share of the basement.

The woman selling the space, Shelley Jones, said after the auction she’d joked about getting $200,000 for it and couldn’t believe the sale price.

Bidding had started at $70,000 and rose quickly in $10,000 & sometimes $20,000 steps, with several bidders in the room & on the phone.

I’ve been using figures of $70-80,000 for parking spaces around the central city – and higher where there’s a distinct inability to park nearby. A parking space in the Metropolis building recently sold for $140,000.

After that, anything under a million dollars for the next offering, a spacious brand-new apartment in the Aria Ponsonby development on Vinegar Lane, was going to feel flat, and bidding fell well short of that. The apartment has 68m² of internal space, and balconies in new developments like this one aren’t a Juliet where you can’t sit down. Parking is also at a premium.


Victoria Quarter

Zest, 72 Nelson St, unit 214:
Features: 23m², furnished one bedroom
Outgoings: rates $1045/year including gst; body corp levy $1788/year
Income assessment: $320/week, fixed until 12 January
Outcome: no bid
Agents: Michelle & Judi Yurak


The basement parking space (above) and the space, with vehicle.

Quay Regency, 148 Quay St, carpark 5:
Features: 1/20 share in 540m² basement parking area (so, 27m², but the actual parking space is about 12m²)
Outgoings: rates $759/year including gst; body corp levy $601/year
Income assessment: $275/month on fixed rental just ended, appraisal $80-100/week
Outcome: sold for $265,000 at $9815/m² share of whole basement
Agents: Daniel Horrobin & Damian Piggin

Isthmus west

Grey Lynn

Updated: Aria Ponsonby, 11 Vinegar Lane, unit 203:
Features: 68m² internal + 8m² balcony, 2 bedrooms, 2 bathrooms, 2 parking spaces
Outgoings: rates $1972/year including gst; body corp levy $4916/year
Income assessment: $800-850/week furnished
Outcome: passed in at $800,000, sold post-auction for $860,000
Agents: Michelle & Judi Yurak

Attribution: Auction.

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2 sales out of 7 at apartments auction

2 apartments were sold today at City Sales’ final auction for the year, out of 7 on offer.

The first sale was a one-bedroom unit in the Renaissance (pictured), Manukau Central, and the other was a leasehold unit at Lighter Quay.


Learning Quarter

Tetra House, 85 Wakefield St, unit 913:
Features: 39m², one bedroom, 2 bathrooms; approved for short-term student accommodation only
Outgoings: rates $1201/year including gst; body corp levy $4794/year
Outcome: passed in at $300,000
Agent: Iona Rodrigues


Volt, 430 Queen St, unit G01:
Features: 48m², 2 bedrooms, courtyard
Outgoings: rates $1175/year including gst; body corp levy $4703/year
Outcome: passed in at $375,000
Agent: Dave Cousins

132 Vincent St, unit GD:
Features: 73m², 2 bedrooms, parking space
Outgoings: rates $2610/year including gst for unit & parking; body corp levy $6646/year for unit & parking
Outcome: passed in at $650,000
Agent: Susan Frear

Victoria Quarter

Fiore, 152 Hobson St, unit 302:
Features: 35m² studio, deck
Outgoings: rates $1071/year including gst; body corp levy $2544/year
Income assessment: $370/week, fixed until October 2018
Outcome: passed in after a bid at $150,000 & vendor bid at $200,000
Agent: Dave Cousins

Wynyard Quarter

Lighter Quay, 77 Halsey St, unit 409:
Features: leasehold, 60m², fully furnished 2 bedrooms, 4m² deck, parking space
Outgoings: rates $1903/year including gst; body corp levy $9374/year including $4547/year ground rent, plus $2571/year residents’ society fees
Outcome: sold for $320,000
Agents: Val Luo & Maggie Sun


New Lynn

Karekare Apartments, 17 Crown Lynn Place, unit 5K:
Features: 40m², one bedroom, deck, parking space
Outgoings: rates $1061/year including gst; body corp levy $3888/year
Outcome: no bid
Agent: Trisha Shanaghan


Manukau Central

Renaissance, 18 Ronwood Avenue, unit 11H:
Features: 32m², one bedroom, 6m² deck, parking space
Outgoings: rates $1131/year including gst; body corp levy $2856/year
Outcome: sold for $315,000
Agent: Andy Faulkner

Attribution: Auction.

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Oceania buys Olliver’s St Heliers land

Oceania Healthcare Ltd has entered into an unconditional agreement to buy a vacant 8945m² site (outlined in picture) in St Heliers, Auckland, cleared for redevelopment by Greg Olliver over 10 years ago.

Sale of the land, in 9 titles at 14-22, 28 & 30 Waimarie St, was held up for several years through court battles between Mr Olliver, who headed development group Landco Ltd, and his ex-wife, Sarah Sparks.

Bayleys began marketing the property in October on behalf of the liquidators of entities which owned the sites, which look down to the Waitemata Harbour, where Mr Olliver had planned the development of new houses & apartments.

Oceania said it intended to settle the acquisition this Friday and would develop an integrated aged care facility & retirement village. It will start work immediately on obtaining planning approvals. The land is zoned mixed housing suburban.

Chief executive Earl Gasparich said it was the company’s first greenfield acquisition and would help maintain activity on its development pipeline for the next 7-8 years. Bayleys said the council valuation of the land was $15.6 million, but Oceania hasn’t disclosed the price it’s paying.

Oceania, backed by Australian bank Macquarie Group Ltd and built up by Mr Gasparich to become New Zealand’s third largest aged care provider & 6th largest retirement village operator, listed in May after raising $200 million through its initial public offering. The company said it proposed to use $173.4 million of the $200 million to reduce debt to provide additional flexibility to pursue development projects.

Macquarie invested in this business from 2005-2008, when Eldercare NZ Ltd & QualCare merged to form Oceania. Macquarie agreed to hold 60.3% after listing and is in an escrow arrangement to retain its stake until the day after the results for the May 2018 financial year are announced. Escrow arrangements affecting Mr Gasparich & other senior executives run until either the 2017 or 2018 financial results are announced.

Earlier stories:
7 May 2017: Oceania Healthcare lists
18 May 2009: Half-cent Olliver debt compromise approved
18 July 2008: Todd ousts Olliver from Landco
7 November 2007: Olliver gets approval for St Heliers redevelopment

Attribution: Company release.

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