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  • Davo36
    replied
    Stalled projects rumble into life

    GREG NINNESS - Sunday Star Times Last updated 05:00 07/11/2010


    Photo: Jason Oxenham
    Fresh hope: The $250m Soho Square project in Auckland's Ponsonby.

    Several of Auckland's highest-profile development sites could be about to get new owners, bringing a ray of hope to the region's stagnant property market.
    Auckland's CBD is littered with vacant development sites, many occupying some of the most desirable real estate in the city.
    Some of them have already changed hands several times, as previous owners have failed to get development plans off the ground, often leaving behind massive debts to their financial backers.
    However, it is likely that some of these sites could change hands in the next few weeks, as new investors enter the market looking to pick up development opportunities at the bottom of the property cycle. And they will have been spoiled for choice, as a steady stream of development sites keep coming on to the market as banks continue to pull the plug on developers' plans.
    Some of the recent offerings include:
    Soho Square, Ponsonby.
    Ponsonby's infamous hole in the ground, this site was put up for mortgagee sale in March, after developer Layne Kells' controversial plan for a mixed use commercial, residential and retail development fell over. Although a number of potential buyers showed interest, it is believed that first mortgagee Fortress Credit wasn't prepared to accept their low-ball offers and is now preparing to take formal possession of the site from its receivers, as a first step towards continuing the development.
    However, Fortress is unlikely to undertake the development on its own, and is believed to be close to finalising a deal to form a joint venture with Retail Holdings to develop the site.
    Retail Holdings is part of the property empire of Auckland investors Haydn Staples and Darryl Henry, who generally keep a low public profile, but who have been active investors around the city. The pair's business interests also include Cressida Capital, one of the few property lenders to have survived the recession unscathed. The company is believed to have a loan book of about $25 million to $30m, but, unlike most finance companies that have struck trouble, Cressida does not source funding from the public.
    It is believed to have a funding line of about $10m from ASB and finances the rest of its loan book from private investors.
    Property sources say the revised plans being drawn up by Fortress and Retail Holdings are likely to have more retail and residential space, and less office space than Kells' original plans.
    Elliot Tower.
    This is one of the biggest development sites in the city, covering half a block bounded by Victoria, Elliot and Albert Streets. It is owned by a group of private investors under the Dae Ju banner, who had plans to build a a 67-level apartment building, with retail space on its lower floors, at a total cost of $450m. Had it gone ahead, only the nearby Sky Tower would have been taller. But when the recession hit, those plans were put on hold and the site continues to be used as a car park.
    Property sources say a private Chinese buyer has agreed to buy the vacant site for around $50m, but the deal is yet to settle.

    The Auckland Star site.
    This property was once home to former daily newspaper the Auckland Star, but has been vacant since the 1980s. It runs between Shortland and Fort Streets and is also owned by a group of Dae Ju investors. It is understood some very wealthy Chinese investors have recently been evaluating the site, although it is not known if this has resulted in a sale.
    51 Albert St.
    Developer Gary Groves' Sanctuary Group was proposing to build a 45-level apartment block on the site, but it is now being sold by mortgagee sale.
    Apartments in the development were heavily promoted to investors at Richmastery seminars through a company owned by Richmastery's founder Phil Jones. They were also promoted to investors at seminars in Singapore.
    However, Groves' plans were opposed by the Catholic Bishop of Auckland, because of the effect the tower would have had on nearby St Patrick's Cathedral. With Groves' plans now in tatters it appears the bishop's prayers have been answered, for the time being at least.
    Property records show that Sanctuary bought the property for $4.9m in 2006, and it now has a rating valuation of $4.78m. Westpac was to have provided the development funding and has a first mortgage securing up to $60m.
    The development potential of the site is likely to be affected by plans by the owners of a neighbouring property to build a high-rise hotel next door. It is understood that plan is close to gaining resource consent.
    11A Cheshire St, Parnell.
    This vacant site is owned by developer Mathew Peters, who was bankrupted in July last year, and the site is being sold by mortgagee sale. ANZ was to have provided the development funding and it is not known how much they are owed, but the bank holds security for up to $100m. The property has a rating valuation of $1.8m.
    Peters' property developer brother Jamie was the better known of the two and, at one time, owned the Gulf Harbour development north of Auckland and the site of what is now the Rhubarb Lane project in the CBD. Jamie Peters was also bankrupted, in October last year.
    Rhubarb Lane.
    The mixed use residential and commercial units in Australian developer Doug Rikard-Bell's Rhubarb Lane project near Victoria Park have been on the market since May 2008. In March this year the project's financial backer, Westpac, gave the marketing effort extra grunt when it brought in Multiplex Living to oversee the sales process.
    Westpac has been involved in the project since it provided financial backing to the site's former owner, the now bankrupted Jamie Peters. Westpac forced a mortgagee sale of the property and then gave financial backing to Rikard-Bell to purchase the site. The bank is also offering attractive terms to buyers who purchase units off-the-plans. These include providing mortgages for the commercial units on residential mortgage terms, and providing a deposit bond at 2.1% annual interest to buyers who don't want to put down a 10% cash deposit when signing up for a unit. Of the 77 units on offer in the proposed complex of six buildings, 22 have been sold so far.

    Source

    So with the Rhubarb Lane project it looks like it's around 29% sold.

    Leave a comment:


  • Riyhone
    replied
    I had a look at the Rhubarb Lane development today - seems the new Victoria quarter is allowing mixed commercial/residential. According to the info given to me today, the development is 50% sold - although over half the apartments are going to businesses who will run offices from them. Given all the empty buildings around, I am very surprised that this could be 50% sold.

    Leave a comment:


  • fudosan
    replied
    That reminds me of Iron Bank at 150 Karangahape Rd. Much praised with great design award, but empty building.

    Leave a comment:


  • Davo36
    replied
    I walked by this place yesterday too: http://www.8nugent.co.nz/

    This is quite a big development too. Being done during the recession. It's interesting how they have 54 apartments part built but they're not finishing them off right now. They're all empty and not fitted out on the inside.

    A lot of money has been spent on this development by Neil Properties and it's basically all empty except for one office tenant. Neil Properties are moving in themselves to utilise some of the space.

    The rest of the office space, the retail space and of course the apartments are still empty. Neil Properties are pretty big and can probably ride this through. Must be costing them though.

    Leave a comment:


  • fudosan
    replied
    How about replacing the whole sewage system in Auckland City? There will be massive amount of construction work. Surely this is a good way to guarantee full employment. But, who's gonna pay for it?

    I've read this infrastructure is at least 40 years old but replacement demands a lot of cash and the result will not be visible enough to interest any politician.

    Leave a comment:


  • Davo36
    replied
    Fudosan, there's so much development going on in Auckland it's not funny.

    Just yesterday I was walking up Mount Eden and even up there there's construction under way. They're replacing the water reservoir up there. It's absolutely massive. The old one has reached the length of it's life and so is being dug up, it's the size of a rugby field.

    All of this work is keeping the whole construction sector very busy.

    Leave a comment:


  • fudosan
    replied
    From Auckland City Council's email update

    Coming soon - space to share and enjoy

    Work on Auckland’s first shared spaces begins in Darby Street on 1 November, and the Fort Street area upgrade later in the month. Shops and businesses will be open as usual and pedestrian access will be maintained. Darby Street will be closed to all vehicles while work is under way.
    More info here: http://www.aucklandcity.govt.nz/coun...by/default.asp


    Viaduct Events Centre update

    The Viaduct Events Centre has reached a significant milestone with 7 of the 14 roof trusses now lifted into position. The impressive multi-purpose events centre is well on track for opening in August next year.
    More info here: http://www.viaductevents.co.nz/

    Leave a comment:


  • fudosan
    replied
    Australasian operator Carnival Australia said that during the next six months, 14 ships from its cruise lines' fleets would make 239 calls at nine ports and carry more than 82,000 passengers - a 35 per cent rise on the previous season.

    A report prepared for the Ministry of Economic Development, Cruise New Zealand and Tourism New Zealand last month showed passenger numbers were expected to grow dramatically during the next two years from about 109,951 in 2009/10 to 138,200 in 2010/11 and then 199,900 during the 2011/12 season.

    The cruise industry was forecast to inject $223 million into the economy during 2010/11, which was expected to rise to $346 million during the 2011/12 season.
    Source: http://www.nzherald.co.nz/business/n...ectid=10680377


    Let's see. The growth of passenger number will be 25% and then 45%!!! It's hard to believe for a cruise industry during the recession. It it turns out to be true, then we'll see a new cruise terminal on Queens Wharf. Money talks.

    Leave a comment:


  • fudosan
    replied
    Office rents

    Auckland CBD office rents are around $280 a square metre but new building supply looks likely to keep them low next year.

    Zoltan Moricz of CB Richard Ellis said a global office rent study showed high vacancies in Auckland but said the bottom of the cycle was in sight because rents had stabilised over the second quarter of this year.
    Source: http://www.nzherald.co.nz/commercial...ectid=10679149

    Real estate firms are always optimistic about the market.

    Leave a comment:


  • Davo36
    replied
    So the Asian guys can blow a wad of money at the casino and then toddle off across the road, and blow another wad! Excellent!

    Leave a comment:


  • fudosan
    replied
    Sex and the city: Sky Tower gets new neighbour

    In a move which has stunned nearby retailers, millions of dollars have been spent to turn the Palace Hotel pub, on the corner of Victoria St West and Federal St, into a new adult venue.
    ...
    Meanwhile, a block away at 51 Hobson St near the Victoria St West intersection, another group of Asian businessmen are spending $1.5 million on developing a $1.5 million "day spa" which includes men-only areas, where clients can bathe naked, and many small rooms for massages.

    Louis Yang, of JC Pacific Trading, denied that the new Gold Coast Health spa, on level one, would be a brothel.
    ..
    She said there were already two brothels in the area and two more will turn Victoria Street into another K' Rd.
    Source: http://www.nzherald.co.nz/commercial...ectid=10675718

    Leave a comment:


  • Riyhone
    replied
    Originally posted by Mr_bond View Post
    From what I hear they're going to do two. One next to Les Mills opposite their telecom building and then one down in Freemans bay on Napier St adjoining the motorway.

    They're obviously seeing something the rest of us don't.
    The new Rhubarb Lane development is going to be very close to this area (Victoria Park area), so maybe there is something going on here.

    Leave a comment:


  • Commerical Property
    replied
    Are there any hard money lenders out there doing bridge loans for commercial real estate investment properties? I have a multifamily property and need a 12 month loan, but the only information I can find online about commercial bridge loan companies is on FuriousTees.com, and most of that info is for the American market. Does any know a lender who will underwrite such a loan in NZ?

    Leave a comment:


  • James Delly
    replied
    Colliers Workplace Research

    Hi, just came across some interesting research from Colliers regarding Office Density, just requested a copy of the full report, an interesting read, just wanted some thoughts on it? has anyone else had a read of this report yet?

    Leave a comment:


  • TomW
    replied
    Originally posted by Mr_bond View Post
    From what I hear they're going to do two. One next to Les Mills opposite their telecom building and then one down in Freemans bay on Napier St adjoining the motorway.

    They're obviously seeing something the rest of us don't.
    Why do a spec in this market?? Banks wouldnt be happy funding a non preleased building. They must have quite a bit of surplus cash. Maybe the saying 'every dog has its day' might happen with these guys.

    Leave a comment:

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