Property Quarterly (September 2013) by Property Institute

Vol 3, Issue 3 September 2013

ď&#x192;&#x17E;â&#x20AC;&#x2030; In this issue

Risk management and probity Better use of wood in commercial buildings Waikato property update The Property Institute succession plan

WE PROVIDE EXPERT NAVIGATION Simpson Grierson’s national team of property specialists represent the interests of developers, vendors, purchasers, landlords, and tenants of all kinds of property. Our property team focuses exclusively on property issues while our other experts at Simpson Grierson handle matters in their field of expertise.

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Phillip Merfield – Consultant

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Vol 3, Issue 3 September 2013

Publication Committee Donn Armstrong Daniel Miles Ah-Lek Tay Gwendoline Callaghan Ian Campbell Contact details David Clark Property Institute of New Zealand PO Box 11 380 Manners Street Central Wellington 6142 Phone: 04 382 7621 david@property.org.nz Editor Julian Bateson Assistant Editor Helen Greatrex Bateson Publishing Limited PO Box 2002 Wellington Phone: 04 385 9705 bateson.publish@xtra.co.nz Advertising management Julianne Orr Bateson Publishing Limited Phone: 09 406 2218 julianne.orr@batesonpublishing.co.nz Publisher Property Institute of New Zealand Property Quarterly is published four times a year and a copy goes to every member of the Property Institute. Property Quarterly articles are not peer reviewed. Articles in the magazine represent the unaudited views of the relevant authors. If you have any questions about the content of an article please contact the Editor or the relevant author.

Contents CEO’s comment David Clark...................................................................................................................... 2 Feature articles Commercial property management Risk management and probity Ian Campbell.................................................................................................................... 3 Better use of wood in commercial buildings Jane Arnott...................................................................................................................... 7 Vital valuations How changes to home insurance will affect consumers and valuers Leanne MacKenzie.......................................................................................................16 Waikato property update Doug Saunders..............................................................................................................20 A different perspective on rent reviews There is only one hat to wear Peter O’Brien..................................................................................................................32 Archives New Zealand What it is and how to quickly search for property Brent Parker...................................................................................................................34 The leadership programme The Property Institute succession plan Marilyn Fitzgerald........................................................................................................37 Joint study tour to China – Part three John Darroch.................................................................................................................39 Annual Awards 2013...................................................................................................42 Legal cases What role does GST play in assessing current market value? Niven Prasad................................................................................................................. 11 The Housing Accords and Special Housing Areas Bill Patrick Timmins and Niven Prasad...........................................................................13

Vol 3, Issue 3, September 2013 Property Quarterly 1

CEO’s comment

CEO’s comment As always, the Property Institute’s annual conference made for a great experience. Queenstown turned on the weather and the views, and everyone made the most of their time. My conference experience started on the Wednesday, joining a group of members and partners for brunch and nine holes of golf at the Hills golf course. The Property Institute’s insurance sponsor, JLT, put up a diamond for anyone making a hole in one on the shortest hole on the course. Unfortunately nobody was up to the challenge. The opening cocktail function was held at the top of the gondola with delegates enjoying a glass of bubbly on the ride up the mountain. The backdrop of the Remarkables and Queenstown was spectacular, and we heard from the Queenstown Lakes District Council in the welcome address. Emma Hill was the opening speaker and set the tone for the rest of the conference. She spoke of her upbringing in the Hill household and her story on the way to her current role as deputy chair of Michael Hill International. With hundreds of stores across several countries, her insights into retail property were fascinating. Mike Sang, CEO of Ngai Tahu, outlined the direction Ngai Tahu was moving and highlighted the diversity in the business operations of the company. He was followed by Westpac’s Chief Economist Dominick Stephens who gave his views on the property market in New Zealand, particularly the Auckland housing market. Dominick is always a refreshing speaker who can provide an economic argument in layman’s terms. The afternoon session started with the tourism session, taking delegates out and about around Queenstown to showcase some of the region’s business success stories. Delegates had the choice of the Earnslaw across to Walter Peak Station with Real Journeys, a 4x4 drive into Skippers Canyon with Nomad Safaris, or a jet boat ride round the lake and down the Shotover with K-Jet. The Awards Dinner was themed ‘a white Christmas’ and a few delegates went all out − some dressing as elves or Santa, and one of our young leaders attending in a dress she had designed and made herself. The master of ceremonies for the conference and dinner, Queenstown local Simon Green, surprised and entertained with a couple of songs during the evening. Life, Fellowship and the John M Harcourt awards were presented to distinguished members, more details are on page 42, and a comedian got us laughing after dinner. Bernard Salt from KPMG in Sydney was the first speaker on Friday morning, and the delegates who were late arrivals following the night before, missed a fascinating session. Bernard is a demographer and spoke of the changing trends in New Zealand’s and Australia’s populations and how this would affect business, what business to be in and what businesses to get out of. Justin Keane from JLL in Auckland provided a commentary on the emerging retail situation in Christchurch, and Peter Lowe from Willis Insurance Brokers spoke of alternatives to traditional insurance cover. The workshops provided excellent sessions covering many aspects of the property business. Unfortunately space does not permit me to cover them all here, but suffice to say I believe we all left better able to meet the demands of our professions. An important aspect of conferences is the networking opportunity and it is good to see the members catching up with past colleagues and friends. We were also honoured to host representatives from the Australian Property Institute, including President Tony Gorman and CEO David Haythorne, as well as the Hong Kong Institute of Surveyors Chairman of the General Practice Division Sr Francis Ng and Hon Secretary Sr Edward Au. Our tireless events manager Jenny Houdalakis is already in action putting plans together for next year. I hope you all look out for the details and join us in 2014.

2 Property Quarterly Vol 3, Issue 3, September 2013

Risk management and probity

Commercial property management Risk management and probity Ian Campbell Two recent cases successfully investigated by the Serious Fraud Office involving secret commissions and corruption will be of topical interest for the commercial property management community. For any organisation it is a case of managing potential risk. It should be noted that in neither of the following cases have the two former employees ever been members of the Property Institute. However, each case involved a property management function of which the Property Institute expects the highest ethical standards from its own members.

The first case involved a senior property manager within a corporation, and the second a commercial property manager employed by a well-known Australianbased home improvement supply company. This article looks at each case as reported by the Serious Fraud Office. Each conviction has arisen from unethical employee conduct and corrupt practices which resulted in a loss to their employer and to other parties. Following the summary of each case, the article reviews ways that risk safeguards and other management practices can be followed to reduce the opportunity of any future reoccurrence of these rarely seen cases. Surprisingly, each corruption incident had occurred within a property department of two relatively mature and systematic organisations. Each would have had internal controls consisting of a robust line management structure which includes monitoring staff, who in turn implement and manage their delegated task. Any specialist property department would still experience independent auditing to check for irregularities and to test operational integrity, including statutory compliance. Would introducing a level of risk awareness and probity across the property management function prevent any future reoccurrence of dishonest behaviour, or are these two cases just isolated events? Serious Fraud Office Chief Executive, Adam Feeley, said at the time of the first case in 2011 that this was the only bribery charge they had brought in the past four years. He noted that corruption cases were rarely seen in New Zealand, but it was important to deal with them swiftly to maintain public confidence. The first case involves two Crimes Act 1961 and one Secret Commissions Act 1910 corruption charge admitted by the former ACC National Property Manager, Malcolm David Mason. This article reviews the background to this case as reported by the Serious Fraud Office. The second case involved a long term, seven-year period of offending and an admission under the Secret Commission Act 1910 by Christopher David Green, a former Commercial Property Manager at Bunnings Warehouse Limited.

ď&#x192;&#x17E; The case at ACC Malcolm David Mason had worked at ACC for 32 years and was their National Property Manager based in Wellington. In this role he had responsibility for the Vol 3, Issue 3, September 2013 Property Quarterly 3

Risk management and probity

procurement of premises, tendering for the development of premises and negotiation of lease terms between it and landlords. In late 2006, ACC identified the need for new premises in Whangarei. As National Property Manager, he was responsible for overseeing the process. He passed details of the ACC’s intentions to a property developer with whom he had a personal friendship. The information allowed the developer to purchase the site that Mr Mason had subsequently recommended to his superiors as suitable for a new branch. The influence of Mr Mason ensured that the developer received the opportunity to purchase and develop the building, and agree a long-term lease with ACC. Once the lease was secured, the developer sold the building for a profit and paid Mr Mason $160,000 from the proceeds. In 2007, Mr Mason was required by ACC to find another location and engaged a real estate agent to help in identifying a suitable Wellington site. In 2008, ACC entered into a new lease based on his recommendation. Following the transaction, the real estate agent paid for Mr Mason to accompany him to the 2008 Singapore Grand Prix. The gift, which included business class flights and accommodation, was valued at approximately $9,000. However, he neglected to disclose the gift to ACC and later took steps to deceive his supervisor about the true nature of the trip. In November 2007, he emailed a government department security officer listing to a personal friend who was in the business of installing and maintaining security systems in buildings. The document listed names and contact details of all designated security officers within government. It was clearly marked ‘in confidence’, which is a level of government information security. In March 2011, following an exhaustive enquiry into numerous property developments and leasing arrangements involving ACC, Mr Mason after earlier pleading guilty, was sentenced. He received 11 months home detention in relation to two Crimes Act 1961 and one Secret Commissions Act 1910 corruption charges. The $160,000 bribe was forfeited. The Serious Fraud Offic said at the time that ‘there had been wider and more serious issues raised by this investigation, including procurement processes in the public sector, the process for referring corruption allegations to law enforcement agencies, and the scope of 4 Property Quarterly Vol 3, Issue 3, September 2013

New Zealand’s bribery laws.’ In May 2012, and related to this case, Gregory Alexander Hutt, a property developer pleaded guilty to bribing the former ACC manager. He was sentenced to 11 months home detention by Justice Ronald Young in the High Court in Wellington.

 The case with Bunnings Warehouse In February 2013, Christopher David Green pleaded guilty in respect of offending under Section 4 of the Secret Commissions Act 1910 at the Auckland District Court. Mr Green was the former Commercial Property Manager at Bunnings Warehouse Limited, where his role included procuring insurance for the portfolio of premises which Bunnings occupied around New Zealand. Herbert Insurance Group acted as an insurance intermediary for insurers and also provided an insurance brokering service to insured clients. Mr Green’s employer, Bunnings, was a client of the Herbert Insurance Group. Between 2003 and 2010 he corruptly received and retained secret commissions totalling approximately $142,000 for referring insurance business to the Herbert Insurance Group. His employer was consequently overcharged by a sum of approximately $220,000 for that insurance. In May 2012, the Serious Fraud Office laid 28 charges against former Herbert Insurance Group boss Grant Herbert, alleging he used client funds to finance his lifestyle. The Herbert Insurance Group had failed to forward premiums from clients to insurance, leaving many clients without insurance cover. The Herbert Insurance Group was put into receivership and final liquidation in March 2011. The liquidator said in their report that records kept were ‘questionable due to irregularities around the accuracy of the information’. Mr Herbert faced charges under the Crimes Act 1961 and Secret Commissions Act 1910, and had a number of offences in relation to corruptly giving an employee of a customer secret commissions for referring insurance business to the Herbert Insurance Group. In June 2012, Bunnings was reported to have had fully reviewed its internal controls in all areas in which Mr Green worked, and made changes as appropriate to improve control. In June 2013, Mr Green was sentenced in the Auckland District Court to five months of home detention.

Risk management and probity

 Analysing both cases Both cases involved dishonest employee behaviour and internal audits appear to have struggled to uncover dishonest behaviour. While investigation into the ACC case began following an allegation by another staff member, The Bunnings case was exposed only because of the separate receivership investigations of the supplier, the Herbert Insurance Group. We are uncertain whether the allegation made by the staff member in the ACC case was given using the provisions of the Protected Disclosures Act 2000. Both cases had involved property management duties in the area of locating new premises, together with supply management, tendering for new developments, negotiation of lease terms and arranging group insurance cover. These are common tasks within any property management department. Each offence consisted of either passing commercially sensitive or confidential information to an external party, or receiving a gift without disclosing this to the employer, and dishonestly receiving secret commissions for procuring contracts. Both employees were experienced senior managers and both positions were senior management roles. These roles would have been given a level of delegated expenditure authority in keeping with their senior positions. Each role would operate under strict policies and risk management procedures embedded within each organisation, including line manager reporting and internal audit checks. Both incidents have shown that, according to the Serious Fraud Office, bribery cases caught by the Secret Commissions Act 1910 are rarely seen but can happen. Both occurred over a reasonably long period of time before being detected, such as the Bunnings case which occurred over a seven-year period.

 International trends In December 2003, New Zealand signed the United Nations Convention Against Corruption, which requires countries to take action in the public and private sector to prevent corruption. There are currently 140 signatories to the convention with other countries still yet to sign. The convention provides guidance to policy setters in developing anti-corruption legislation. More recently, International Transparency published

the Corruptions Perceptions Index in 2012 and ranked New Zealand with one of the lowest perceived levels of corruption. New Zealand still uses the Crimes Act 1961 and the 113-year-old Secret Commissions Act and may need to look at updating its anti-corruption legislation. This has already happened in the United Kingdom, which has the newly enacted Bribery Act 2010 which provides for unlimited fines, and imprisonment for up to 10 years for individuals. A common requirement for businesses under most forms of anti-corruption legislation internationally appears to be a trend towards having procedures in place to prevent bribery. Under the United Kingdom’s Bribery Act 2010, which applies to anyone with a business presence in that country including associated persons, having adequate procedures in place can be used as a defence for an organisation failing to prevent bribery. The United Kingdom Ministry of Justice has therefore set out six principles for bribery prevention − • Risk assessment • Top level commitment • Due diligence • Clear practical and accessible policies and procedures • Effective implementation • Monitoring and reviews. An interesting fact from international research undertaken in 2010 by Deloitte found that four out of 10 global executives were reluctant to disclose significant corruption incidents to authorities. Although individual fines were held to be significant, the reputational damage of being investigated was considerable.

 Risk management safeguards Across in Australia, the New South Wales Independent Commission against Corruption provides information on ways of identifying corruption risk. It also offers a significant amount of free literature covering risk management with reference to risk management standard AS/NZS ISO 31000. This standard recognises that a number of principles need to be satisfied before risk management will be effective. The AS/NZS ISO 31000 standard recommends that organisations should have a framework which integrates the process for managing risk into the organisation’s Vol 3, Issue 3, September 2013 Property Quarterly 5

Risk management and probity overall governance, strategy and planning, management, reporting processes, policies, values and culture. The International Commission Against Corruption has therefore recommended some practical methods for identifying corruption risk by − Using information you already hold Assess risks through past organisational experiences, previous audit results, records of prior losses, relevant internal reports, or staff and client complaints. Use the experiences and skills of your staff Identify risks by asking employees to identify ways that existing controls could be bypassed, conduct interviews with experienced and knowledgeable staff, ask staff to complete risk assessments, and directly observe workplace activities and conduct audits and physical inspections. Use the experience of other agencies Examine the results and findings of other private, local or overseas agencies and employ professional consultants to conduct internal technical reviews Use the experience of client and customers Conduct client and customer interviews, arrange focus group discussions, or arrange a survey or questionnaires with your clients on their experiences. While these practical methods can aid in identifying problems, they also appear to reinforce the bribery prevention principles outlined by the United Kingdom Ministry of Justice. There is one further practical safeguard to discuss and that is the concept of probity. Probity is a risk management approach to ensuring procedural integrity. It is particularly important in the public sector where public sector funds are used for awarding major projects and service contracts. The concept of probity is also applicable for any unlisted entity or publically listed company or corporation when awarding contracts. Probity would ensure that the decision process which has been followed is found to be completely transparent, whilst preserving public and bidder confidence in the process. A good result of procedural integrity would include avoidance of conflicts and corrupt practices. Relevant New Zealand legislation Crimes Act 1961, Section 99 – Interpretation ‘bribe’ means any money, valuable consideration, office or employment, or any benefit, whether direct or indirect. Secret Commissions Act 1910, Section 4 – Acceptance of

such gifts by agent an offence, Section 8 – Receiving secret reward for procuring contracts an offence. Protected Disclosures Act 2000 – The purpose is to encourage people to report serious wrongdoing in their workplace by providing protection for employees who want to ‘blow the whistle’.

6 Property Quarterly Vol 3, Issue 3, September 2013

Applying risk management and probity These two cases simply involved dishonest employee and supplier behaviour. The failure to disclose personal friendships on a major leasing transaction, and not to disclose but cover up receiving a gift, was dishonest. There were also secret commissions from an established insurance broker whose practices were found to be questionable by the liquidator. Importantly, both cases involved procuring contracts within the property management area. Risks around supplier procurement and relations between suppliers and individual employees are highlighted by these two cases. The long-term preferred status and use of a specific supplier had created distortions which led to the wrongdoing. In the Bunnings case, had the insurance brokerage service been independently re-tendered by the company, then the corrupt practices of receiving secret commissions may have been avoided or uncovered earlier. Unfortunately, in the ACC case, the leasing of new premises and negotiation of lease terms between an employee and the developer exposed the dishonest behaviour of both parties. However, introducing external probity at the earlier stages of premises scoping, premises selection, negotiation and the final decision to lease would have identified these conflicts of interest and prevented the dishonest employee behaviour. Risk awareness As mentioned earlier, each separate case had occurred within a relatively mature property department. Both cases involved procuring contracts or the continuing relations between individual employees and their suppliers. When we read the risk management recommendations of the International Commission Against Corruption, discussing risk awareness at the workplace with your staff and openly identifying any procedural weakness is recommended. Outlining your own risk management strategy involving supplier selection, routine tendering or simply varying the job tasks at hand can be a good way of initiating your own risk management practices if you have not already done so. The practice of introducing and discussing risk awareness within the workplace increases staff interest and involvement and encourages stronger values. Strong values can, in turn, minimise or even prevent the onset of inappropriate behaviour. By openly discussing and analysing these two cases and identifying the risk management resources which are available, you will be able to consider introducing discussion about practices within your own organisation. While both employee and supplier behaviour around these two case studies was rare, it would be an opportunity lost if we were unable to discuss these problems or avoid reviewing these cases and the lessons which have unfolded. Ian Campbell is a Fellow of the Property Institute of New Zealand.

Better use of wood

Better use of wood in commercial buildings Jane Arnott The engineered properties of timber are now more diverse than ever before. Some engineered timber manufactured offshore and locally is guaranteed for over 50 years. More recent and local advances in cladding give a 25-year guarantee, while the post-tensioning of timber using glulam, laminated veneer timber, cross-laminated timber or round wood, means the standards as a structural material have significantly improved.

The new standards bring benefits to the commercial sector, from strength and safety gains to minimal business interruption in the face of disaster and a dramatic decrease in maintenance. However, promoting design and engineering capability, along with generating awareness of how timber can be applied to commercial property, is a challenge for a sector which could otherwise allow its commercial market share to wallow. Shortly after accepting the role of Chief Executive of NZ Wood I thought it timely to catch up with an old friend and now high-profile inner city Wellington property developer. Suggestions that building with locally-milled engineered timber is good for the economy brought the response that property developers were not motivated by notions of patriotism. I already knew that a return on investment would be a main priority. However, the next piece of advice, directing me to architects if I wanted to improve the uptake of wood became more challenging as time went on.

 Building on the past The mantra of cost-effective construction and a solid return on investment rather than big picture thinking often means that timber is not used. This doctrine prevails in the private sector, and it is easy to see how innovation then runs second or third to convention. Researching how new building systems or innovatively engineered wood products can be applied to current predictable building regimes requires time and commitment. Neither architects nor engineers have time to spare when the pressure is on. There is also the aspect of perceived risk, particularly when new timber technology attracts the comment − I do not want to be first. Two years on from that start, it is a case of coming full circle. It is clear that increasing the uptake of timber in the commercial sector requires a sustained and multi-pronged awareness-raising campaign which works to build confidence. Building confidence works across the entire spectrum and it increasingly needs to start with investors and developers.

 Knowledge transfer events Earlier this year NZ Wood hosted the first Wood Smart Construction Seminar and focused on the commercial sector. Over 150 people attended, mainly engineers. The speaker list was formidable – 17 leading architects and engineers detailing, reinforcing and explaining how they used innovation across a wide range of buildings from the Carterton Events Centre, Massey University College Vol 3, Issue 3, September 2013 Property Quarterly 7

Better use of wood

of Creative Arts, the Tumu ITM retail outlet and other warehouse-style structures. The University of Auckland module production of the 469-suite, 16-storey student accommodation tower, along with the Trimble Building and the Tait Centre, both in Christchurch and both under construction, were also highlighted. Each speaker came to the stage with extensive credentials. Audience feedback ranged from feeling inspired and impressed with how far timber and particularly, but not exclusively, engineered timber had come to wondering why more private or public sector developers or facilities managers were not using it. Too much of this progressive architecture and engineering has gone under the radar. The NZ Wood Timber Design Awards, where many of these buildings have featured, provides a small opportunity to obtain respect and inspire others. But it is not enough. It is apparent that a lack of knowledge and little incentive to learn about timber technology is an obstacle to be tackled. The opportunity to apply dramatic new timber technologies to create new legacy buildings which will attract and beautify can benefit from many opportunities. Property developers will then know to expect more when design concepts are first presented. New Zealand has excellent reference buildings which showcase new timber technology with new connection systems, new posttensioned timber beams and intricate grid shells such as the entrance to the Waitomo caves. More important is the opportunity for hollow timber rounds, up to 18 metres in length, to be used as a structural system as well as a deep pile foundation. This level of innovation warrants market acceptance if the structural system costs of around $800 a square metre are to take hold with significant downstream benefits.

ď&#x192;&#x17E; Leadership required Only a relatively small number of architectural firms, backed by visionary developers and building owners, are committed to developing the body of knowledge which offers the potential to include timber in the commercial sector. The ready availability of traditional construction materials and expertise limits results. This is further reinforced by including contingencies to cover unknowns when new materials and building systems are considered. 8 Property Quarterly Vol 3, Issue 3, September 2013

Automatically, contingencies can make a brilliant design concept or detail designs appear uneconomic. However, engineered timber as a structural element cannot be costed in isolation from an understanding of how this occurs across the construction project. For example, only mobile cranes are needed instead of tower cranes, cure time is reduced because concrete foundations do not need to be so extensive and fewer workers are required on-site. There are many cost reductions that need to be taken into account. There will be a gradual uptake of engineered timber, with the increased demand for commercial buildings in Canterbury as an example. But an accelerating learning curve needs to take shape. As a sector which recognises that developers are a critical user group, there are no winners if timber options are closed out before the concept drawings have even started. At what threshold will the value of being tied to tradition be set against the potential to improve longerterm results from innovation? How are the benefits of damage-resistant design, for example, being weighed against short-term hesitation and growing pains? While the answer remains elusive we can still highlight the Auckland Art Gallery and the Supreme Court in Wellington as signature civic buildings where the end result justified the means â&#x20AC;&#x201C; as far-reaching as they may have been at the beginning. The precision, geometry and craftsmanship in the use of indigenous timber in both buildings are unique and unparalleled. Both buildings have pushed boundaries and differentiated the expertise of the companies and practitioners behind them.

ď&#x192;&#x17E; The Merritt Building If we then switch to the private sector and Christchurch, it was the installation of a post-tensioned laminated veneered timber frame for a three-storey office block which produced the awe and surprise that became the private sector commercial equivalent. This single building became a tourist attraction for developers, architects, construction companies and engineers. Made possible by the commitment of owner developers,Vanessa and Tony Merritt, the Merritt Building achieved a number of firsts. One of them included the reduction in insurance premiums which stemmed

Better use of wood

from the damage-resistant design and technology. Importantly, this was not to be an experiential example of timber engineering. It was a cost-competitive demonstration of what could be achieved if the right design and engineering team could be coupled with the manufacturing capability and proprietary knowledge. Considerations included repetitive detailing and post-tensioning strands that run through the centre of the beams to the outside columns. The post-tensioning elongates as the connections rock during an earthquake and work to re-centre the building as seismic activity subsides. Need I add that no additional wrapping was required to protect the beams from fire. Externally mounted mild steel dissipaters act as a shock absorber, absorbing the dynamic energy in the system while concentrating the damage and protecting the

rest of the structure. This knowledge is not widespread in New Zealand.

ď&#x192;&#x17E; The Canadian experience Earlier this year NZ Wood brought Canadian Tye Farrow, Partner at Farrow Partnership, to New Zealand to help reinforce how buildings, such as hospitals, with restricted budgets can also be timber rich environments which create and sustain hope and healing. He argues that design values can coincide with health values using numerous examples from around the world. Much of his thinking was foreign to New Zealand audiences. However, capacity-filled venues ensured that a sense of enlightenment among attendees was the end result. How much of his message is subsequently translated into real life examples of beautiful timber rich, but

Vol 3, Issue 3, September 2013 Property Quarterly 9

Better use of wood

budget conscious, spaces in the health sector remains to be seen. But if this is the Canadian experience, then we can hope that such timber rich areas are built before too long.

ď&#x192;&#x17E; Material updates Engineered timber is not new. Glulam beams have been available as a building material for at least 70 years. Structural laminated veneer timber has only been commercially manufactured in New Zealand for the past eight years, and cross-laminated timber started commercial manufacture here as recently as July 2012. This is where the heart of innovation and opportunity lies. For the uninitiated, laminated veneer timber has a strength-to-weight ratio stronger than steel. It is dimensionally stable, meaning that as an engineered product it is uniform, straight, true and seasoned. Warping and twisting does not occur. We are now into the third generation design and engineering of post-tensioned timber technology in New Zealand. The fire performance of engineered timber offers outstanding and unique benefits. Engineered timber is an insulator and retains its strength under extreme heat. A char layer is the best that fire can do, due to the density of the actual structural member. The development of a protective char layer is superior to the effect of fire on substitutes and can immediately shorten repair timeframes. Structural laminated veneer timber, cross-laminated timber and round wood are making inroads as an effective shear wall alternative which offers natural colour, warmth and texture. Single post-tensioned walls or pairs coupled with shear walls offer earthquake resistance. These, along with timber frames, columns and beams which are posttensioned with replaceable dissipaters in the event of major seismic load, are the potential to become a first choice option for three to four-storey commercial office buildings. Cross-laminated timber shares the lightweight characteristic of glulam and laminated veneer timber, minimising structural foundation timeframes, reducing overall construction costs, and offering improved seismic performance. Dimensional stability is with multi-layered planks which are glued cross-wise to create a robust slab diaphragm effect. 10 Property Quarterly Vol 3, Issue 3, September 2013

New flooring systems are manufactured to double as a floor and a ceiling. An attractive exposed surface area becomes a feature while also serving as a structural component, eliminating the need for floor joists. This innovation, developed by TimberLab in Auckland, combines laminated timber with tongue and groove traditions. A new engineered weatherboard cladding, prefinished with plant-based oils and waxes, was patented by Auckland-based Abodo. Straight-grained and free of defect, the engineered weatherboard ensures stability and minimises cracking, providing longevity and attractive looks. It also features a 25-year durability guarantee.

ď&#x192;&#x17E; Off the chart Finally an off-the-chart innovation, which won a 2012 Timber Design Award, is the hollow timber round developed by MLB consulting engineers and TTT products in Tuakau, Auckland. Logs are cored to create a hollow structure up to 18 metres in length. These are suitable for use in both structural frames and foundation systems. The rounds can be post-tensioned for structural applications. Currently, detail designs for a six-storey office block at $800 a square metre for the structural system are promising to revolutionise certain types of developments. If you include a 50-year durability score from Scion, the scope for this innovation appears significant. Its use ranges from round wood barns, stables and other utility-style buildings to high demand as a pile foundation. Costs are significantly reduced because rapid pile installation by water jetting and vibration removes the need for slow hammering, and timeframes are shortened. We are rich in timber as a natural resource and, putting patriotism firmly aside, for investor developers with a far-seeing eye the cost benefits which accrue across a range of options is well worth the commitment. The effort involved in lifting expectations and identifying the right expertise to join your project team will produce a better building, and it might just happen to be a timber one. At the time of writing Jane Arnott was Chief Executive Officer of NZ Wood based in Wellington.

GST and market value

Legal cases What role does GST play in assessing the current market value of a property? Sayes V Tamatekapua [2012] NZCA 524 Niven Prasad The meaning of current market value for a property is generally well established. It means the price at which a willing but not anxious vendor would sell, and a willing but not anxious buyer would buy a property. But if a buyer is willing to pay an additional amount for GST, knowing he or she will claim the amount back, and a different buyer is not willing to do so knowing that a GST amount cannot be claimed back, are there two different current market values for the property? Or is there one which is correct? In other words, what role should GST play in the valuation of a property? The case of Sayes v Tamatekapua tells us that the assessment of current market value does not depend on whether or not GST is payable or claimable by a purchaser. The Sayes case echoes the precedent in the case of Minister of Lands v NutsfordCumming HC Auckland AP83SD02 to say that there cannot be more than one market value. As we note below, the Sayes case does not set an absolute rule. However it acknowledges that the market value, and whether GST has a role to play, is governed by the basis of the contract from which the value is to be assessed.

 Current problems The Australian and New Zealand Property Standards provide at paragraph AUSNZ 5.8 that ‘in New Zealand non-residential valuations shall be stated as “plus GST (if any)” and residential valuations shall be stated as “including GST (if any)”. Any exceptions to the standard treatment of GST shall be clearly stated’.Valuers depart from the recommended language and sometimes use the term ‘excluding GST’ instead of ‘plus GST (if any)’. The term plus GST (if any) has been held to unequivocally mean that if there is GST liability arising from the transaction, then that amount should be added

to the price. However, case law is divided on whether ‘excluding GST’ means the same thing or whether it means that any consideration of GST has been excluded altogether. The Sayes case is a lesson to express this position as clearly as possible in contractual arrangements.

 Background The Sayes case involved a long standing dispute between the children of the late Mr and Mrs Sayes over the distribution of their estates, including the property at 106 Holden’s Road, Clevedon, which was to be transferred to one of their sons, Michael. He had been in occupation of the property for many years and was not registered for GST, so upon receiving the property would not have to account to the Inland Revenue Department for that amount. Clause 15 of the settlement deed provided ‘that the properties … be valued at their current market value as at the same date by a registered valuer …’. The valuers issued a valuation report stating that the land’s current market value was $4,311,000 excluding GST. The report also stated that it had been prepared ‘for the specific purpose stated’. A dispute followed over whether this GST exclusive amount was the appropriate value for a residential rural property. Michael argued for the lower GST exclusive value because he would then receive less from the property and therefore more from the estate. His brother Gerrard argued for the higher GST inclusive value, as a result of which the trustees would receive a higher amount of settlement from the estate. Justice Lang in the High Court held that the market value of the property in the settlement was the value of $4.3 million exclusive of GST assessed by the valuer as per the deed of settlement. This was a rejection of the ‘better Vol 3, Issue 3, September 2013 Property Quarterly 11

GST and market value sale price’ argument that the trustees put forward, whereby the Holden’s Road property should be valued at a higher price because Michael could potentially sell the property for a higher price to a GST registered hypothetical purchaser. Michael’s brother Gerrard appealed this decision and made three submissions on appeal. • Regardless of whether a purchaser is GST registered or not, a GST inclusive price is not a ‘better sale price’ as Justice Lang had described it, but is the market price because that is what a purchaser would be willing to pay whether they are GST registered or not. Gerrard, the appellant, relied on a forensic accountant to support this submission. • It would be unfair to value the property in the settlement on a GST exclusive basis because this failed to take into account Gerrard being registered for GST and Michael not. • Under the settlement deed, each party’s share of the settlement was to be based on ‘the actual value of each property in light of that party’s circumstances’ and on this basis the value ascribed to Michael’s property should be the GST inclusive value.

The court further held that a hypothetical sale of the property is to be assumed in the assessment of current market value and ‘approaching the matter as a practical question not overlaid by philosophical niceties’. The appellant’s second and third submissions had focused on the differences in the GST status of the appellant and respondent. On the other hand the valuer’s report, which was unchallenged, had focused on what price hypothetical parties would have reached and not the practical aspect. The Court of Appeal held that reference to the Nutsford-Cumming case was appropriate in that there can only be one market value for a property. However, the court highlighted the distinction in this case which involved an assessment of market value in circumstances where the price is assessed using the hypothetical subdivision method for the purpose of determining compensation for land taken under the Public Works Act 1981. In those circumstances, a hypothetical GST registered willing purchaser would most likely have factored in an assumed entitlement to a second-hand goods credit in assessing what would be a competitive price.

 Decision and reasoning

The effect of the Sayes case is that you ignore GST for the purposes of the establishment of current market value. Presumably this would also apply to other situations where the tax status of the parties may have an effect on what they receive or in effect pay for the property. It follows that a party’s tax status should be ignored, even though it may well have a benefit or detriment on what other parties receive or pay for the property. A note of caution. It is possible that the contractual arrangements under which the assessment of current market value is to be established may override this general presumption by specifically saying that the GST status or the tax status of the parties is to be taken into account. Parties should therefore carefully consider the contractual arrangement under which the value of property is being assessed and use clear expressions to guide those assessing this value.

The Court of Appeal rejected the appellant’s case and upheld the decision of the High Court to say that the current market value of the property was the value as assessed by the valuers under the terms of the deed of settlement. The Court of Appeal considered that the issue was a matter of straightforward contractual interpretation. The Court followed the approach in the case of Vector Gas Limited v Bay of Plenty Energy Limited [2010] NZSC 5 to interpret the settlement deed in its context. It followed then that the context of the deed favoured the valuer’s assessment of current market value because the deed expressly stated that the ‘current market value’ was to be assessed by the named valuers. The appellant’s first submission was therefore rejected because the valuation itself was not challenged and the forensic accountant was not the valuer nominated in the deed so the accountant’s comments were of no relevance.

Legal cases 12 Property Quarterly Vol 3, Issue 3, September 2013

 Implications of the case

Niven Prasad is an Associate – Commercial Property at Simpson Grierson in Auckland.

Housing Accords and Special Housing Areas Bill

Legal cases Promoting land and housing supply by permissive consenting The Housing Accords and Special Housing Areas Bill Patrick Timmins and Niven Prasad The government’s view that constrained land supply and restrictive planning regulations are contributing towards housing unaffordability is well known. The Housing Accords and Special Housing Areas Bill (the Bill) passed its first reading in Parliament in mid-May. The Bill endeavours to provide an immediate and short-term response to both these factors. The Bill intends to entice residential development into main areas. The components in achieving this are − • The establishment of special housing areas • The setting of threshold criteria for qualifying developments • Provisions for a more permissive and faster consenting regime. Before discussing these components it should be noted that the Bill is an interim measure. Should it become legislation as expected in August, it will expire in a stagger between 30 June 2016 and 30 June 2017. Reforms to the Resource Management Act 1991 itself are intended to supersede this Bill as part of the long-term response to housing affordability issues.

 Special housing areas and qualifying developments Special housing areas are to be established under regulations and may only be within scheduled regions or districts. Currently, only Auckland is scheduled, but further regions or districts may be if they fall below certain housing affordability thresholds. It has been suggested that Christchurch, Tauranga-Western Bay of Plenty, Wellington and Nelson could be such areas. Within a scheduled region or district, special housing areas may be established in suitable areas where there is appropriate infrastructure and demand for the type of development that the Bill aims to encourage. The Bill also requires the establishment of threshold criteria for

proposals to meet in order to be qualifying developments. These developments will have to be mainly residential and meet regulations setting maximum height of no more than six floors and a minimum number of dwellings. Housing accords Territorial authorities will be able to have some influence over these matters. If a territorial authority falls within a scheduled region or district, it may agree a housing accord with central government. If such a housing accord has been agreed, the Minister may only recommend regulations to establish special housing areas or variations to threshold criteria for qualifying developments within the district at the request of the territorial authority. The exception to this requirement is where notice to terminate an accord has been given. Auckland Council and the government have already agreed a housing accord, subject to approval by Auckland Council’s governing body. For qualifying developments, the accord intends a maximum height of six storeys, or the maximum height provided in the Unitary Plan if that is lower. In terms of minimum number of dwellings, the Auckland accord intends qualifying developments to have capacity for 50 or more dwellings or vacant residential sites in new greenfield areas, or five or more dwellings or vacant residential sites in brownfield areas. These intentions would be expected to be confirmed by the necessary regulations for the Auckland region. Vol 3, Issue 3, September 2013 Property Quarterly 13

Housing Accords and Special Housing Areas Bill

 Provisions for a more permissive regime The more permissive and faster consenting regime, while incorporating many elements of the Resource Management Act, will stand alone. Applicants will be able to decide whether to apply for consent by qualifying developments under this regime or under the Act. The Bill includes elements to promote a more permissive and faster consenting regime − • The stated purpose of the Bill, which is to be given more weight in comparison with the RMA, is to enhance housing affordability by facilitating an increase in land and housing supply • Activities necessary for the qualifying development are deemed to have more liberal activity status for the purposes of the application. • A more streamlined plan change process if district planning documents do not allow for the qualifying development • Consent applications do not have to be notified unless there will be more than minor effects on adjoining landowners or, in some circumstances, on the New Zealand Transport Agency • No public notification is needed for plan change requests • Decisions are to be made within 60 working days unless an application includes a plan change request • There is no right of appeal against decisions unless the qualifying development is over four storeys high • Applicants have a right of objection to the decisionmaker if an application is refused. There had been speculation that consent conditions for approved qualifying developments could require a

Legal cases 14 Property Quarterly Vol 3, Issue 3, September 2013

certain portion of dwellings to be in an affordable range and targeted at first home buyers. At present the Bill does not expressly authorise such conditions, but by contrast the Auckland Housing Accord states that such conditions of consent may be required. In Parliamentary debate, the Hobsonville development in Auckland has been used as an example of how development under this Bill might occur. In that development there was a requirement that 20 per cent of new homes be in the affordable range for first home buyers. Apparently, 27 per cent of houses in the development had sold in this range when the Bill was introduced. Progress of the Bill The Bill passed its first reading with bipartisan support. However, debate on it was lively and the Labour party was only supporting it to the select committee stage where it was to seek amendments. Stated concerns were that the Bill was too timid because it did not require qualifying developments to provide affordable housing. There were also concerns regarding the rights of appeal. The Bill may therefore be passed in a somewhat different form, which it may have at the time of publishing, and we will provide an updated note on any changes presented in that final form. But the main concerns the Bill proposes to address will remain relevant. We will have to wait and see whether the measures proposed achieve the intended result of more affordable housing. Patrick Timmins and Niven Prasad are Associates at Simpson Grierson in Auckland.

$55

incl GST

for members

GUIDE FOR THE MEASUREMENT OF RENTABLE AREAS (July 2013) The update to the Guide for the Measurement of Rentable Areas is now available $55.00 incl GST for members. www.property.org.nz Or iPad, Tablet, Mobile and Desktop versions. Discount available for multiple purchases. Visit www.measurementguide.co.nz

Changes to home insurance

Vital valuations How changes to home insurance will affect consumers and valuers Leanne MacKenzie This article explains the main changes to home insurance in New Zealand, examines some of the subsequent potential pitfalls and challenges, and elaborates on how these changes may affect the way reinstatement insurance valuations are presented.

By now you will be well aware that most New Zealand insurers are changing the way they insure homes. The cover is changing from an open-ended square metre replacement cover to a maximum dollar value of sum insured. This is a direct result of the tragic and costly Christchurch earthquakes. They not only alerted overseas reinsurers to the quantification and exposure difficulties with openended policies, but also emphasised to the New Zealand public the importance of accurate home insurance. All insurers, both global and in New Zealand, rely on reinsurers to insure them. Insurers in this country would not be able to cover the property they do without this support. However, with that support comes requirements on how insurers are to structure the covers they provide to customers. Globally most reinsurers, and therefore insurers, provide home insurance on a sum insured basis. When the reinsurerâ&#x20AC;&#x2122;s spotlight was on New Zealand following the Christchurch earthquakes they dictated the change from open-ended to sum insured. This was to allow them to understand, calculate and monitor their maximum exposures better, and to charge appropriate reinsurance premiums. Most importantly, it was also to ensure they and insurers have sufficient funds and resources in the event of another wide area disaster.

ď&#x192;&#x17E; Estimating maximum rebuild amount Reinsurers have made a sensible and logical business decision, but the change is more pronounced for consumers. Previously, consumers simply needed to measure and insure their home for the floor area. Even this was not a foolproof way of insuring for full replacement as shown following the Christchurch earthquakes. Many consumers found they were under-insured because they got their floor area wrong. The most common mistakes were forgetting to include upper storeys and outbuildings in their square metre equation. Now consumers need to estimate a maximum dollar amount with which to rebuild their home, a task which will be daunting to most. With all the unnecessary and somewhat slanted media hype, the resulting confusion for the general public is understandable. At the same time, most insurance companies have taken this opportunity to update their policy wording and have introduced new sub-limits and restrictions. Fortunately, in an effort to offset the reinsurer imposed restrictions, some have also introduced new policy benefits and enhancements. This means that now, more than ever, customers need to understand their policy. 16 Property Quarterly Vol 3, Issue 3, September 2013

Changes to home insurance

With so many different changes being made between the insurance companies, it is prudent that customers research what else is available in the market which may better suit their needs. Given the various complexities and nuances, we advise consumers to consult insurance brokers who can guide them through potential minefields.

 Other main changes Some insurers have introduced maximum limits on items that were previously automatically included, such as retaining walls, swimming pools and tennis courts. Even then, those limits vary depending which brand you buy from and which particular product they are selling. Most insurers allow customers to buy more cover if required, but others have set limits and do not provide the option. Customers therefore need to ensure they understand how much these items cost to rebuild so that they know if they need to buy more cover for them. If that is not possible, they should explore options available under other policies. The best way is to obtain a reinstatement insurance valuation. Some of the common items which may now need to be specified, or have no cover at all depending on the insurer and product, include − • Retaining walls • Permanently installed swimming pools and spa pools • Tennis courts • Cable cars • Bridges • Wharves, piers, landings, jetties and the like • Access roads, lanes, right-of-ways and access ways • Culverts, ponds, fords or dams, private utility plant, water and windmills. When do the changes happen? Insurance companies have varying dates to implement this change, but the last day reinsurers allowed new or renewing insurance policies to be written on an open-ended basis was 30 June 2013. As valuers, it is important to know what sub-limits or restrictions apply and if there is any policy specific information which needs to be detailed on the valuation. In addition you need to find out if there is a checklist of details and items required available from the customer’s insurer. By doing so, you will be providing them with information relevant to policy limits and insurer underwriting requirements. This will enable them to make

sure that an informed decision about whether they have the correct amount of cover and a policy that meets their needs.

 Converting policies on renewal Insurers and brokers are not valuers, yet they have to present a dollar sum insured to customers at renewal time. This is referred to as a default sum insured. The insurance industry has not imposed a mandatory default sum insured calculation amount per square metre, but instead are all using different values to convert the square metre area insured to a dollar sum insured. This means that in theory two customers with homes currently insured for the same floor area, but through different companies, may receive different default sums insured when their policies renew. For example, some insurers are defaulting a flat $2,000 a square metre while others are further narrowing this down to an additional $1,000 a square metre for non-living areas such as decks. Others yet may use a combination of age, location and size of the home in an effort to mimic the Cordell calculator. This was created by Cordell Information Pty Ltd and calculates the estimated rebuild costs based on New Zealand construction industry information. This may not seem like a fair and reasonable way to provide a homeowner with a default sum insured and suggested cost of rebuilding their home. However, with the Department of Building and Housing quoting the average rebuild cost in Christchurch at $1,815 a square metre for a 145 square metre home, it was decided that $2,000 a square metre would cater for most homes in New Zealand. Prudent insurers and brokers are stressing to customers it is their responsibility to set their own sum insured. The default sum insured provided is merely a suggestion to be considered, not a true valuation of the cost to rebuild the home. Most renewal documentation will emphasise the customer’s need to be satisfied that the sum insured shown is sufficient to rebuild their home. There are a number of concerns about consumers setting their own home sum insured unaided. First, will their sum insured reflect the additional costs that come from wide area damage, such as a natural disaster, where the costs of labour and material increase due to demand surges? Vol 3, Issue 3, September 2013 Property Quarterly 17

Changes to home insurance

Second, some customers will take the view that ‘my home is never going to burn down or be a total loss, I will just risk it’ and choose to under-insure. While they will pay a slightly cheaper premium, they run the risk of not having sufficient funds to rebuild their home. For insurers, deliberate under-insurance, also known as selection against the insurer, is a real concern. This is because insurers still have to wear the cost of expensive repairs where the house is not a total loss, yet they are not receiving a full premium which is representative of the true value of the home and therefore the actual amount at risk. In New Zealand, there is no law of average applied to house insurance. If a house is insured for 75 per cent of its actual value, for example $750,000 instead of $1 million, and there is a loss which costs $650,000 to repair, the insurer still has to pay 100 per cent of the $650,000. This is even though they only received a premium based on 75 per cent of the actual value of the home.Valuations are therefore more valuable to insurers than ever before so that they are aware of the actual real cost of rebuilding. Third, there are those customers who will overinsure to be extra sure they have sufficient funds to rebuild their home. While the insurer receives an additional premium, the customer will still only receive the actual costs to put them back into the position they were in immediately before the loss, which is one of the fundamental principles of insurance. For example, a policy with a sum insured of $675,000 on a house which costs $580,000 to rebuild will only pay a maximum of $580,000 in the event of a total loss. As a result a customer may feel like they are being ripped off and this attitude can tarnish the industry. The challenge for those who want to make certain their most prized asset or investment is sufficiently covered, should the worst happen, is making sure the sum insured they set will adequately rebuild their home in the event of a total loss. Obtaining a valuation is peace of mind – the customer can update the sum insured each year in line with building cost inflation.

Options available The insurance industry cannot provide advice to customers on how to calculate their sum insured. They can only guide and encourage them to engage the services 18 Property Quarterly Vol 3, Issue 3, September 2013

of a registered valuer, quantity surveyor or other qualified professional for independent advice. Another option the insurance industry is advocating is for consumers to use their insurers’ or brokers’ version of the Cordell calculator. Most insurers have their own version with branding and highlighted areas to consider, such as stressing the need to include retaining walls. However, the formula behind them is the same and is updated quarterly. The use of the various calculators is free, and they are easy to use, but they provide guides only and will not be suitable for every home owner. The accuracy of these calculators drops off for larger homes such as those over 700 square metres or for with an estimated rebuild cost of $2 million or more.

 Higher value versus average Larger higher value homes generally contain top-end fixtures and fittings, are often architecturally designed, and may contain features not found in the average suburban home such as cable cars, tennis courts, bridges, jetties or extensive retaining walls. The calculators may therefore be unsuitable for such houses, and generally insurers will require a valuation to establish accurate rebuild costs before they confirm insurance. The calculators are also only as good as the information loaded by the user. If consumers do not know or understand the materials and features which make up their home and loading incorrect information, the answer will not be an accurate reflection of the cost to rebuild their home. A recent television programme compared a home owner using one version of the calculator in what she thought was a satisfactory and accurate manner against a registered insurance valuation. The difference in rebuild cost was over $500,000, bearing in mind this was an architecturally designed, high quality home, built on steep land with extensive retaining walls. The same exercise was carried by another home owner on her house of average quality build on flat land, and the calculator and valuer were not very far apart. This fairly simplistic exercise demonstrated the difference in using the services of a professional valuer for homes which are not a basic or standard construction type or built on steeply sloping land.

Changes to home insurance

Some versions of the calculator include GST, but others do not. This is also a concern as some insurers include GST on their sum insured and others pay GST on top of it. Therefore it is easy to see consumers being confused and under or over-insuring as a result.Valuations should identify the GST inclusive and exclusive figures so that consumers can adapt the value to their policy’s GST practice.

 Trigger point for valuations Finally, as you know, insurers have had a trigger point for requiring valuations on houses, normally it is around 400 to 500 square metres. Upon renewal, insurers will now find some real high value homes which have previously slipped under that trigger point for a valuation and which will now require one as the house is moved on to a sum insured policy.

In the past insurers were only able to assume a correlation between size and value. However, as valuers you will know that a small highly specified house can be more expensive to rebuild than a larger average home. This fact in itself is going to increase the demand for valuations as house policies fall due for renewal over the next 12 months. The change to the way homes are insured in New Zealand is expected to have a significant effect on the valuation industry. Understanding insurer requirements and policy limits are important so you can provide your customer with a relevant and accurate valuation and they can insure their homes for the correct sum insured. If there was ever a time for the valuation industry and the insurance industry to work together and understand each other, that time is now. Leanne MacKenzie is Crombie Lockwood’s Personal Lines Practice Manager based in Auckland.

MY REBUILD VALUE sum insured valuations Do you need help with your sum insured valuation? Are you aware of the changes to your insurance policies? Now it is your responsibility to determine the cost of rebuilding your home. Don’t take the risk of losing money, make sure you have the correct Sum Insured Value for your home! Our QS team will take into consideration the actual costs of rebuilding your home. From just $300 per house we will do a site specific costing exercise.

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Vol 3, Issue 3, September 2013 Property Quarterly 19

Waikato property update

Waikato property update Doug Saunders The market data indicates a renewed confidence in the Hamilton residential property market with volumes of sales on a monthly comparison higher than the last three years. This is probably fuelled by media reports on the rising market, particularly focusing on Auckland, where a shortage of both owner-occupier and rental property has led to a sharp upturn in demand for property.

In Hamilton the general sentiment is very positive, with agents reporting that demand is outstripping supply for good quality property. Interest rates are at historically record lows, with banks actively competing to attract new customers. January in Hamilton is typically a slow month for residential property sales, but from February 2012 we saw significantly higher levels of sales in comparison to 2010 and 2011. It is expected that the number of sales will continue in a similar trend to the last three years. However, there appears to be more positive feeling in the market place over the past year. Number of dwellings sold

Number of dwellings sold in Hamilton city from January 2010 to May 2013 20 Property Quarterly Vol 3, Issue 3, September 2013

Waikato property update

ď&#x192;&#x17E; Median sales price The median sales price appears to follow an established trend since 2010, floating from $320,000 to $350,000. The graph shows that we have not achieved or maintained median value levels above the peaks of 2010 and 2012. Median sale price

Median sales price for Hamilton city dwellings from 2010 to 2013

ď&#x192;&#x17E; Vacant land and residential development There are several new subdivisions under construction and demand for new sections is returning as the desire for new homes strengthens. New building standards incorporating increased insulation requirements and double glazing could be considered to be increasing demand for new housing. Late 2011 saw building consent numbers improve, indicating a renewed confidence, but this levelled off in the earlier part of 2012 and has since recovered. Developers are now releasing sections to the market in smaller numbers. From October 2012 we have seen several subdivisions sell off the plans. A development located off Kay Road sold a stage of sections with titles a year ahead, a River Road development sold approximately 50 per cent before site works had started, and Chedworth Developments have had stages advanced to the market with good pre-sales. Prices have increased with the smaller sections under $200,000 and the sites over 700 square metres now $215,000 to $245,000. High-density land sales dropped dramatically in 2008 to 2010 with few sales in the market. Apartments had bad press and buyers for such properties were limited. More recently, developers have re-entered the market and there are several blocks under construction with the rental or investor market appearing to be the target market. Overseas and out of town marketing is becoming more common. There are several larger intensive developments advanced or in process and several infill projects. Rental guarantees appear to have an effect on values. Summary As we came out of the recession, many market commentators observed that property prices were still high. Low interest rates have held up values over the last two years. Housing affordability is a hot topic for 2013 without any relief in sight for new home owners. Homes in good condition are selling well, and those with any deferred maintenance are slower to sell, reflecting a reluctance to carry out the upgrading or risk delays of employing trades to fix it. After low volumes of sales there is often a build-up of households looking to upgrade or downsize due to changes in family circumstances, schooling Vol 3, Issue 3, September 2013 Property Quarterly 21

Waikato property update

requirements or as a lifestyle choice. As confidence levels rise, along with increased optimism about job retention and wage growth, we would anticipate demand strengthening in the Hamilton residential sector. In addition it is expected that the official cash rate will be maintained at 2.5 per cent for the medium term, although forecasting out of the recession is proving difficult for all commentators. Low interest rates are helping new buyers into the market and there is strong competition between banks for these clients.

ď&#x192;&#x17E; Commercial and industrial property Some demand has returned to the commercial property market, with participants appearing to be prepared to make investment and leasing decisions. In our opinion this is fuelled by continued low lending interest rates, less difficulty in securing funding, and a lack of choice about alternative investments. The investment market over the last 18 months has seen strong demand for what is considered to be good quality investment property. Lease tenure and the perceived quality of the tenant remain the main criteria in investment decisions by purchasers. There is a lack of supply of such property, with demand being particularly strong in the lower to mid-size investment market. This investment demand has generally attracted returns of between seven and 8.5 per cent for smaller and medium-sized investment property, although there were some notable sales below that range where the property was new and subject to long-term lease commitment. The larger investment property has attracted returns usually between eight and 9.5 per cent, with investors moving within this range after consideration of perceived risk, mainly associated with tenant strength and security of rental cash flow.

ď&#x192;&#x17E; Vacant possession sales Demand for vacant possession property for owner-occupation is generally quiet, with an over-supply of property that would be seen to be of poorer quality. Hamilton investment sales Tenant

Sale price

Return

Comment

Tyre Plus

$1,100,000

7.7 per cent

Eight-year sale and leaseback Modern industrial building

The Cook

$865,000

7.5 per cent

Five-year lease renewal Refurbished heritage building

CBD Bar/CafĂŠ

$1,240,000

7.3 per cent

New six-year lease

Waikato Regional Council, Keystone and Furnace bars

$3,900,000

8.4 per cent

Weighted average lease term 5.7 years Two-level building within CBD Bars on ground floor, with office on level one

NZ Post, Vetro and Electoral Office

$3,850,000

8.0 per cent

Weighted average lease term four years Modern building located to fringe of CBD with high traffic volume

Lely NZ & Retko Logistics

$2,350,000

9.0 per cent

Weighted average lease term 2.2 years Industrial premise in secondary location

24 Property Quarterly Vol 3, Issue 3, September 2013

Waikato property update

Waikato region â&#x20AC;&#x201C; main investment sales Tenant

Sale price

Return

Comment

BNZ Morrinsville

$2,900,000

5.1 per cent

Nine-year lease New building

Westpac Morrinsville

$3,200,000

5.0 per cent

Nine-year lease Refurbished building

Multiple tenants, Te Awamutu

$1,625,000

7.7 per cent

Weighted average lease term 1.4 years Commercial property well located within Te Awamutu

Farmlands Hautapu

$2,250,000

6.9 per cent

Six years remaining on lease Modern building on outskirts of Cambridge

There have been sales of medium and larger-sized properties where purchasers have taken advantage of the softer market to acquire existing property instead of looking to a design build option where costs and required rental levels have remained comparatively high. Smaller-sized property is generally showing little difference in value between vacant and leased for this reason. Hamilton vacant possession sales Address

Sale price

Assessed yield

Comment

1026 Victoria Street

$1,500,000

9.05 per cent

Modern office building in Hamilton CBD fringe area

729 Victoria Street

$3,350,000

8.9 per cent

Ex car yard purchased for gym

505 Grey Street

$925,000

10.8 per cent

Dated office building purchased for re-leasing

553 Te Rapa Road

$590,000

8.3 per cent

Purchased for car yard development

32 Somerset Street

$675,000

8.2 per cent

Vacant industrial

Waikato region vacant possession sales Address

Sale price

Assessed yield

Comment

71 Firth Street, Matamata

$570,000

7.9 per cent

Small workshop purchased by sitting tenant

59 Hautapu Road, Cambridge

$1,447,500

7.3 per cent

Workshop with rear tenant purchased by owner-occupier

ď&#x192;&#x17E; Vacant land Land values, after initially declining from the peak of the market in 2007, have stabilised with owners of vacant land now being prepared to wait. Purchasers have met this market where the site is suited to their particular development or requirement. There has been a low volume of vacant land sales in the commercial and industrial markets, although over recent months we have seen industrial sites attract a higher level of demand. The majority of sales are to owner-occupiers. In some examples, adjoining owners are taking advantage of lower values and buying land to future-proof existing property and larger companies land banking. Vol 3, Issue 3, September 2013 Property Quarterly 25

Waikato property update In conjunction with this level of land value, building costs have been competitive. However, the overall cost of new development still requires a rental return for new development which would be above the market level for similar quality existing accommodation. The apparent level of vacancy throughout all of the markets is moderate, with most being in secondary quality premises.

ď&#x192;&#x17E; Retail and hospitality space A retail vacancy survey carried out in February 2013 indicates that the overall Hamilton CBD vacancy rate dropped from 18.9 per cent in June 2012 to 12.5 per cent in January 2013. This result, however, is skewed with a reduction in total space due to renovations to the CentrePlace shopping centre. Second tier retail property has shown a reduction in vacancy of 2.2 per cent, with a number of new leasings being evidence of some renewed optimism and with this space having previously been vacant for some time. We consider this to be a sign of renewed economic confidence, as well as the conclusion of a shopping centre in Te Rapa, with tenants showing confidence. Retail and hospitality space of a poorer quality has seen further increases in vacancy. Even at lower rental levels there is little or no demand, especially evident in secondary areas. We expect this to continue with some effect on smaller retailers due to the impending move by Farmers into the CentrePlace complex. Per cent

30 25

January

2010

2011

2012

2013

20 15 10 5 0

Main retail

Second tier retail

Hospitality and fringe retail

Retail vacancy survey

In the short term the redevelopment of CentrePlace, and the completion of CityGate, a five-level office building with ground floor retail adjacent to CentrePlace and consolidation of three businessess in one premise, are likely to stimulate CBD activity. Citygate, developed with an anchor tenant, is now fully let to the four floors of office accommodation. Agents report significant listings of available accommodation currently still occupied by tenants under existing lease commitments. We suspect there is a

26 Property Quarterly Vol 3, Issue 3, September 2013

Waikato property update

significant proportion of tenancies where landlords have agreed to concessional rentals to help tenants and to retain occupancy. The overall trend for rental values in most markets has been a softening over the last two years, with indications that this has now firmed at a slightly lower level. Signs point to the overall market perception being one of a continued slow recovery, but perhaps recognition of the bottom end of the cycle having been reached.

ď&#x192;&#x17E; Dairy farm and grazing outlook Farm values and sales Dairy farm values are heavily influenced by global demand for milk and subsequent milk payout to suppliers. Other factors affecting value include supply and demand for dairy farms, bank interest rates and cash flow returns determined by payout and seasonal fluctuations. Sales over recent years reflect this trend. From 2006 through to the end of the 2008 season, dairy prices rose steeply resulting in a final payment of $7.66 per kilogram of milk solids. The last quarter of 2008 was affected the world financial crisis, the negative effect resulting from the San Lu milk scandal and lower global dairy commodity prices. These all significantly affected farmer confidence and the ability of financial institutionsâ&#x20AC;&#x2122; to provide mortgage finance. This created an abrupt about turn to market conditions, with few properties selling at auction and some auctions cancelled. Dairy farm values in the Waikato retrenched in 2009. Fonterraâ&#x20AC;&#x2122;s 2008/2009 end of season payout to farmers was finalised at $5.20 per kilogram of milk solids, and the 2009/2010 forecast upgraded to $6.10 per kilogram of milk solids Sale value

$5,000,000

$4,500,000

$4,000,000

$3,500,000

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

2 0

$0 2008

2009

2010

2011

2012

Median sale price per property

Jan-13 Feb-13 Mar-13 Average sale numbers per month

Waikato dairy farm sale trends from 2008 to 2013

Vol 3, Issue 3, September 2013 Property Quarterly 27

Waikato property update

following an opening payout of $4.55 in May. The eventual end of season payout was finalised at $6.70. Sales volume and prices continued to be constrained during both 2009 and 2010, with only four sales a month in each year compared with eight farms a month selling in the previous two years and these often taking twice as long to sell. In December 2010, Fonterra issued a bullish forecast on the back of rising international commodity prices at $7.15 to $7.25 per kilogram of milk solids. Following favourable global auctions during the first three months of 2011, it announced a record high end of season distribution at $7.90 to the farmer in October 2011. However dairy farm sales during this period were limited, reflecting continued global and industry uncertainty and a difficult season, with the to dry weather through the spring and the season only just saved by preChristmas rains. From the peak of 2008, dairy farm values had declined 30 per cent by mid-2011. Fonterraâ&#x20AC;&#x2122;s opening 2011/2012 forecast was set at $6.75 per kilogram of milk solids. However commodity prices fluctuated and it ended at $6.40 for a fully shared farmer. This was down 19 per cent on the previous season. The payout fluctuated again and in March 2013 was finally raised to $6.12 per kilogram of milk solids. The graph plots the global dairy trade trade weighted index over a 10-year period and illustrates the global volatility for dairy products over recent years. Note that the scale of time is not the same for every year. Price index

Global dairy trade trade weighted index from 2003 to 2013

ď&#x192;&#x17E; Dairy grazing The value of small to medium-intensive grazing and arable properties is influenced by global demand for protein, particularly milk, lamb and beef. Other factors affecting value include supply and demand of land, bank interest rates and cash flow returns determined not only by payout but seasonal fluctuations and costs. Sales over recent years reflect this trend. Initially, during 2008 the demand for intensive grazing and arable land was dominated by potential rural lifestyle and residential development opportunities, 28 Property Quarterly Vol 3, Issue 3, September 2013

Waikato property update good demand for New Zealandâ&#x20AC;&#x2122;s equestrian bloodlines and a strong dairy industry following Fonterraâ&#x20AC;&#x2122;s 2008 end of season payout. In September 2008 New Zealand was exposed to the world financial crisis. As a result, demand for developable land ceased, the desire by overseas buyers to acquire equestrian blood lines softened and the dairy industry predicted a payout of $5.10 per kilogram of milk solids. This was compounded by a summer drought. Median monthly sale price

Number sold per month

$5,000,000

$4,500,000

$4,000,000

$3,500,000 $3,000,000

$2,500,000 $2,000,000

$1,500,000

$1,000,000

$500,000 $0

0 2007

2008

2009

Dairy farm sale price Dairy farms sold

2010

2011

2012

Drystock farm sale price

1st quarter 2013

Drystock farms sold

Dairy and grazing farm value trends for the Waikato between 2007 and 2013

The limited sales during 2009 indicated that land values were now being underpinned by returns from the more traditional agricultural land uses and financial institutions restricted access to credit. The only positive factor for the initial six months of 2009 was improving red meat prices. The last two seasons have experienced a moderate level of volatility, the 2010/11 season payout ending at $7.60 per kilogram of milk solids and last season it was at $6.40. Following a good start to this season, but low payout, the season reversed with drought affecting production although global dairy prices soared. It is now anticipated that the end of season payout will be similar to last season, but the drought will have squeezed profits. The rural market associated with the dairy industry is currently buoyant with a good level of sales before Christmas 2012 which has continued through to 2013. This appears to result from financial institutions providing purchasers with a good range of credit options which is now applying pressure to sale prices. If interest rates remain at similar levels for another 12 months, it is expected that the market will remain relatively buoyant with some seasonal adjustment. The New Zealand dollar remains at historically high levels and it is projected it may reach record levels this year, continuing to constrain potential

Vol 3, Issue 3, September 2013 Property Quarterly 29

Waikato property update

farm incomes. Trading Amongst Farmers has now been implemented. This appeared to cause some short-term concerns, but the market remains active as will be noted in our sales. The 2012 pre-Christmas dairy farm selling period experienced double the level of activity compared to the previous season. Real estate agents reported 23 dairy farms selling in the last quarter of 2012 compared to 11 for the same period last season, which was double the previous period of 2010. The levels are close to the peak market in 2007. Sales have continued at strong levels, with 13 dairy farms sold in January, three farms sold in February, and 10 in March. The March sales included five farms selling consistently in the price range of $4.9 to $6.5 million for welldeveloped 98 to 150 hectare properties. Given the current global climatic and economic situation it is anticipated that dairy farm investors overall will continue to be cautious and keep prices at realistic levels based on milk returns. Bank interest rates are at low levels, and currently banks appear to be well-funded and giving competitive lending options. The latter provides a number of potential purchasers with finance avenues, and this is applying pressure to sale prices contrary to the global recession and summer drought affecting farm profits.

ď&#x192;&#x17E; Drystock pastoral farms Grazing property values have reflected the profitably of the sheep and beef farms, but through much of the Waikato values have also been influenced by the dairy industry acquiring additional support land. The desire to acquire large farms as a long-term investment prevailed before 2008, but more recently a return on investment is of primary concern. During the first part of 2008 the demand for grazing property was dominated by the dairy industry following the end of season payout. This was particularly noticeable with a number of larger grazing properties bought to provide supplementary feed, partly resulting from the drought conditions. It also reflected the high profit margins available to increase production and on some of the better quality pastoral land there were a number of dairy conversions. The graph on the next page shows drystock property trends over the past five years from the peak of 2008. It shows extensive pastoral farms as well as the smaller dairy grazing blocks, which would be the majority of the market in sale numbers and illustrates market trends during this period. The 2009/2010 season improved as a result of strong demand for both beef and lamb. North Island lamb prices continued to improve and resulted in a 57 per cent increase over a two-year period between December 2009 and December 2011. Beef increased 46 per cent for the same period. During this time farmers had to contend with considerable global uncertainty and unpredictable weather conditions affecting production, resulting in higher costs which constrained investment. According to the Ministry of Agriculture and Fisheries sheep and beef report dated August 2011, net cash incomes rose 27 per cent nationally in 2010/2011 season, reaching their highest level in 11 years. This has been followed 30 Property Quarterly Vol 3, Issue 3, September 2013

Waikato property update

Monthly median sale value

Monthly median sale number

$2,500,000

14 12

$2,000,000

10 $1,500,000

8 6

$1,000,000

4 $500,000 $0

2 2007

2008

2009

2010

2011

Median sale price per property

2012

Jan-13 Feb-13

Average sale numbers per month

Waikato drystock property trends from 2007 to 2013

by another successful season. The table below shows the financial results dated October 2012 for the Waikato and Bay of Plenty as they provide an overview of sheep and beef income over the past five years. MAF then MPI financial results for Waikato/Bay of Plenty from 2008 to 2013 Year ended 30 June

2008/09

2009/10

2010/11

2011/12

300

Average lamb price dollars per head

$82.00

$70.99

$100.00

$111.06

$99.45

Average rising two-year steer dollars per head

$1,044

$945

$1,200

$1,150

$1,116

Net cash income dollars

$285,447

$249,578

$331,487

$339,094

$348,808

Farm working expenses dollars

$153,659

$135,528

$142,804

$152,895

$163,728

Farm profit before tax dollars

$66,526

$78,799

$121,947

$132,347

$150,615

Effective area hectares

2012/13 projected

Lamb prices continued to soften during the first quarter of 2013 as a result of the drought. By April the kill was well ahead of last year and processing weights plummeted. More recently, yards have experienced a rise in lamb prices as a result of much better pasture cover and an improved schedule. Beef prices initially improved on the back of high grain prices, but have softened and currently remain at relatively stable prices. There has been a good selection of dairy farms available this season, but only a few pastoral properties. Dairy farm values currently appear to be on a par with last year, although pastoral farm values appear to have softened. Doug Saunders is Director of Telfer Young in Hamilton. Vol 3, Issue 3, September 2013 Property Quarterly 31

Viewpoint

A different perspective on rent reviews There is only one hat to wear Peter O’Brien This article is in response to the article by Brian Stafford-Bush in the June issue of Property Quarterly.

Where do you start when asked to undertake a rent review? You need to ensure you hold the required competency, knowledge and market data.You should require the client to provide the complete, dated and executed lease document along with all other related documents for renewals, reviews and variations.You must read and understand these documents, in their entirety before you do anything else. If the lease dictates that the tenant is responsible for operating expenses, you must get your client to provide these details.You must then set about verifying that they are accurate and appropriate at the date of review. You must also inspect and measure the premises. To ensure you do not miss any item, which is easy to do if accompanied by a talkative tenant, use a comprehensive checklist. Break down the information about the premises into all its components and obtain your observation of each. The premises are unlikely to be identical to many of the comparable premises in all respects, and remember that adjustments will be required. Who you are acting for should make no difference to your task. Finally, make sure you carefully study the Code of Ethics, particularly sections 1.4 to 1.7, and 2.4.

 The principles I follow In 2002 I was fortunate to be appointed to hear a rental dispute. One of the witnesses was Mr Hanna, a Fellow of the Property Institute. He provided what I consider to be the clearest, most succinct and authoritative summary of the principles inherent in a valuation for current market rent assessment. Mr Hanna, when asked for his permission to repeat what he said, advised that the origin was in part the findings of the late Bruce Bornholdt, with Mr Hanna’s experiences and prejudices added. In turn I have adopted this as how I proceed with minor adjustments to reflect my prejudices. The principles which I have regard to in determining the current market rent of premises at the date of the review and in relation to the law are as follows − 32 Property Quarterly Vol 3, Issue 3, September 2013

• The tenant and the landlord will each be a hypothetical tenant and landlord respectively who are willing, but not anxious, to lease the premises, are reasonable, prudent, possesses the ability to discharge its lease contract liabilities, has knowledge of the market and the options available, and are not affected commercially or financially by any constraints, obligations or pressing needs. • The landlord and the tenant will be assumed to have had regard to all legal precedents and authorities which may be relevant, and will conduct their negotiations with a full awareness of the current market and the premises as at the review date. • The rent for the premises is to be assessed as if the premises were hypothetically vacant and made available for lease, by the hypothetical landlord, on the open market at the review date for the immediate occupation of a hypothetical tenant under a new lease. This would contain the same, or very similar, terms and conditions as those set out in the deed of lease dated for these premises. • For the purpose of assessing the current market rent, the premises are to be considered as being in a condition whereby all responsibilities and obligations contained within the lease have been met and discharged by the party responsible, with no matters outstanding or unresolved. • The number of potential tenants who would wish to lease the premises is not relevant. There will be an assumption that there is at least one tenant for whom the premises will be well suited and who is prepared to pay a current market rent, whatever that may be. • The best evidence of the current market rent will be derived from new open market leasing of other similar premises in this, or other similar comparable, location which were let as close as possible to the review date. All other evidence considered must be weighted below the benchmark of new leasing. • The landlord and the tenant must agree a rent that will

Viewpoint be the lowest rent the landlord is willing accept and the highest rent which the tenant will willingly pay. There can only be one rent which successfully meets all these criteria for this lease.

 Gathering and analysing the data When gathering comparable data, inspect the comparables and wherever possible, be fully aware of the lease terms and conditions of these. Ideally hold a copy of each lease. Ensure you understand everything there is to know about the comparables, especially how the rent was established and what, if any, incentives were provided. It is not adequate to take rental data from another party without subsequent enquiry.Verification of information from a party with knowledge is vital whether it is landlord, tenant, letting agent or solicitor. When analysing the comparable data and applying it to your premises, many small decisions are made. If each small decision is consistently skewed in one direction the compound or cumulative effect is for an unbalanced assessment of the market rent. In my experience, this is the most frequent cause of disparities in rents assessed.

 Decisions and influences The decisions and influences can be many, small or large and include − • Green star rating • The standard of the building • The influence of the building’s seismic rating • Identifying with accuracy the appropriate operating expenses to be met by the tenant • The standard of the building’s facilities such as air conditioning, toilets, foyer and lifts • The relevance and influence of post-review evidence • The condition of the economy and its influence on the tenant along with their decision to offer a rent for the premises and for the landlord to accept that rent at the review date • The variations in lease terms and conditions

In addition there are appropriate adjustments for − • Time • Height floor by floor within the building, • Partitions in landlord fit-out • Landlords carpets • Views • Whole building occupation • Ceiling type and standard • Type and standard of lights • Floor plate size • Lift performance such as number, capacity and waiting time • Floor shape and efficiency • Location on the floor of lifts, stairs and amenities.

 Conclusion Most importantly, when your assessment is complete apply the stand back test. Does your assessed rent sit appropriately within the raft of evidence you hold? Is your rent lower than the rents for the better premises and more than those for the poorer premises? Are you satisfied valid reasons exist to explain apparent disparities? Consider your ethics, the law, act as an objective professional and assess an appropriate current market rent for the premises at the date of review. Finally, for the benefit of all involved, remember the words of Justice Blanchard − The fair rent is what the landlord can reasonably expect to be offered, not what the landlord would like to receive. These words are balanced by Sir Ian Barker − What the ‘prudent tenant’ would consider appropriate, albeit a prudent tenant who took into account the landlord’s right to receive a fair return. There is only one hat the valuer can wear. There is no place for advocacy. Peter O’Brien acts as an arbitrator in valuation disputes.

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Vol 3, Issue 3, September 2013 Property Quarterly 33

Archives New Zealand

Archives New Zealand What it is and how to quickly search for property Brent Parker I am the Senior Historical Researcher at the Crown Law Office and have worked in that role for many years. During that time I have become particularly focused on problems relating to land. However, my work is varied and one day I can be looking at the history of a block of Maori land in the King Country (Te Rohe Potae) and the next day searching for information on the importation of lizards.

My work involves locating information so that the Crown has knowledge of its past actions. The research usually relates to examples where action is being taken against the Crown in the courts or tribunals, or where it is bringing proceedings in those jurisdictions. As my role is generally towards what happened in the past, one of my main sources of information is archival repositories. The main source on the New Zealand government involve the records held at Archives New Zealand. The records here are the memory of government, and it is through these that it can be held accountable for past actions. In a previous life I worked as an archivist in what was then known as the National Archives, and I became relatively knowledgeable of the records there. This article provides a short summary of the history of the establishment of Archives New Zealand, about the types of records held, and some tips on how to make searching for records more effective.

ď&#x192;&#x17E; Establishment of a government archive Over the years a number of disasters resulted in the loss of many government records which had been inadequately protected. In 1907, fire destroyed much of Parliament Buildings and records stored in the basement, including the inwards correspondence of the Native Department. The records of the Education and Marine Departments were also lost. In 1952 there was a fire in the Hope Gibbons Building in Taranaki Street in Wellington, where many government records were stored. This resulted in the destruction of early records of the Department of Lands and Survey, the Marine Department, the Labour Department and the Ministry of Works. These disasters prompted the enactment of the Archives Act 1957 which established the then National Archives under the control of the Department of Internal Affairs as the repository for all public or governmental records. The Act created the position of a Chief Archivist who was responsible for the custody, care, control and administration of the public records deemed to be worthy of permanent preservation. These were now required to be deposited with the National Archives or into other approved repositories in the regions. In 2000, the National Archives was established as a stand-alone department and was renamed Archives New Zealand. In 2005, the old legislation was 34 Property Quarterly Vol 3, Issue 3, September 2013

Archives New Zealand

replaced by the Public Records Act 2005, which expanded the role of the Archives New Zealand to promote record-keeping practice in local and central government. Recently, Archives New Zealand and the National Library were placed under the control of the Department of Internal Affairs. Archives New Zealand only collects records created by central government and these are held at four regional archives in Dunedin, Christchurch, Wellington and Auckland. The Wellington office, being located in the home of central government, holds by far the largest quantity of archives. The quantity of records is enormous using around a hundred kilometres of shelving. The records held date back to the time of the British Resident in the Bay of Islands in the 1830s through to the recent past. Generally, records need to have reached the stage in their life when they are no longer used by departments before they can be transferred to the archive. However, if required, a department can request the return on loan of their information for short periods. Record formats include files, maps and plans, films, photographs, artworks, sound recordings and some objects. For example, the Wellington office holds the Crewe murder axle.

 Property records Of particular interest for property professionals is the wide range of records which relate to land. Land records held date back to the first purchases from Maori by the earliest settlers, and speculators, before the Treaty of Waitangi was signed. The vast majority relate to Crown acquisition, administration and sale of land. These records cover many spheres of activity and include − • Agriculture and forestry • Crown land • Environmental and reserves adminsitration • Housing • Maori land • Public works • Survey • Transport and the road network • Valuation.

Land Information New Zealand (LINZ) has recently deposited a very large amount of its records at all of the regional offices of Archives New Zealand. These records include material dating back to the 1840s, through to more recent activity, and cover topics such as land title registration, survey and Crown land administration.

 Archway There is an online database called Archway which allows the user to search using keywords, file numbers and format and to locate information held there at www.archway. archives.govt.nz. It also provides the researcher with the ability to locate additional aids created by departments, such as card indexes and registers, which help with finding more information. Archway is very useful, but I find that there is a problem with the quantity of records any search may throw up. I therefore tend to ask myself what branches of government would have dealt with this subject and what records would they have created on it. A bit of thought along these lines, and possibly some background research on the departments in existence at the time, is always very useful. Doing this means I seldom fail to find something on a subject I am researching. When searching for information in Archway it helps to know how the records are listed and what some of the various terms mean.

 Agency The department that deposits a record at Archives is known as the Agency and the reference to the records it deposits will all start with a four letter code that stands for this Agency. The records are listed by the department depositing the records and they are described in Archway as that department’s or Agency’s records. This is even if that department may not have originally created them, and only held them for a number of years because it had inherited a defunct department’s functions. The user therefore needs to be aware that a record created in 1860 may not have been deposited until 1960, and it may have been deposited by a totally different department. For example, a file on a piece of Crown land Vol 3, Issue 3, September 2013 Property Quarterly 35

Archives New Zealand

may have originally been created in the 1840s by the Colonial Secretary’s department when it managed that land. It may have then passed on to the Crown Lands department when that department was created in 1858, then on to the Department of Lands and Survey in 1891. After that it would be on to the Department of Survey and Land Information in 1987, and finally on to LINZ in 1996. The file, when deposited at Archives by LINZ, is listed as a record belonging to LINZ. The reference for the file is given a four letter Agency code – in this case ABWN – that stands for the head office of LINZ. Searching not always simple A search in Archway on an Agency will usually provide the user with information on the predecessor Agencies holding the same functions. This all helps to narrow down search parameters. It also helps in cases where the file or record title is too brief to indicate who created it. A while ago I was asked to check that all the records of a certain institution had been located as very few of them had turned up in a legal discovery process. The question was where they were. I knew there must have been quite a few generated because the institution was in existence for a relatively long period of time. I found that the person doing the original search in Archway had relied on the name of the institution being recorded in the record title. Unfortunately it had not, and an Agency search for the institution revealed that all of its records had been deposited, but not one of them actually included the institution’s name and all of them were exactly the type of record we were searching for.

 Series All records are described in Archway as belonging to a series and each series is given its own numerical code. A series can be described as a type of record. For example, meeting agendas will be one series and meeting minutes would be another. Series searches in Archway are especially useful for the following reason. 36 Property Quarterly Vol 3, Issue 3, September 2013

In some cases record names do not actually state what the record is. A text-based search for a Crown purchase deed may not reveal the item you are looking for because the name of the deed in Archway is too general – it is merely listed by the name of the block of land. A search by series or type of record is much more useful because you can see a list of all the Crown purchase deeds together and you can then refine your search there.

 Using the records If you are registered as a reader you can order up to five records remotely using Archway and these will be kept available for you to view for one week.You have to register with them at one of their offices and provide proof of identity.You must view records at the office of Archives New Zealand which holds them as they cannot be transferred to other offices. Records may have public access restrictions placed on them. These are usually placed on records due to personal privacy or commercial sensitivity and most have a defined restriction end date. Generally, Archway should tell you what the restriction is and where to go to get permission to view an item. You can order up to five items to view, and it pays to return each item to the issue desk once finished so that you keep a sufficient quantity waiting ready to view.You are now allowed to photograph records. This has been of great help to researchers, and in one recent case I worked on we took around 20,000 photographs. The publication of records obtained from Archives New Zealand also requires the approval of the institution. It is a relatively simple process to obtain permission in writing. Have a look at the records available at Archives New Zealand. If you have had contact with the Crown, and most of us have, there may well be a file there on you. Brent Parker is Senior Historical Researcher at the Crown Law Office in Wellington.The opinions and views expressed are his own and not those of the Crown Law Office.

Leadership programme

The leadership programme The Property Institute succession plan Marilyn Fitzgerald Much has been written about leaders and leadership. Not everyone can be a leader, not all leaders produce good business results, not all are great coaches. Many people are at the top of their game but are not leaders. The Property Institute recognised its adaptive challenges and made 2013 its year for instigating a leadership programme. This was not to improve its current leaders but to invest in future leaders. We now have seven young leaders within the governance structure who can make a difference, each with their own unique qualities. These seven young leaders are the voice of a younger property generation experiencing first-hand what it takes to run a professional organisation, support the needs of its diverse members, and operate in this global and challenging environment. Our emerging leaders are Jeremy Ball, Kelly Beckett, Katie Grindley, Aimee Martin, Nicole Owen, Craig Russell and Jay Sorensen.

The programme gives these young leaders a chance to sit on one or more of the Property Institute Board, the Valuers Council, the Standards Board, and the four key community committees over the course of their year, as well as representation at local branch levels. In some cases their involvement in strategic and operational projects will change the way we look at these problems and they will definitely add value. Our committees will be working with them to continue their development in the nuances of governance and management. The seven young leadersâ&#x20AC;&#x2122; employers also endorsed these appointments.We thank Telfer Young,The Property Group, Seagar and Partners, Logan Stone Ltd, Beca and Align (formerly Environmental Challenge) for investing their time with the Property Institute.Their faith in their staff and willingness to invest in their future is an excellent trait.

Kelly Beckett Kellyâ&#x20AC;&#x2122;s passion lies in giving back to the profession. An award winner and SPINZ member, her tireless committee representation in the Auckland branch puts her up there on the leadership spectrum already. She is keen to mentor younger members coming through and has lots of ideas about continuous improvement at an operational level. As a senior valuer her first committee choice is as a representative on the Valuers Council, a place where her credibility is already well established.

Jeremy Ball Jeremy is a registered property consultant and identifies with the specialist property advisory community. His strengths lie in his multi-disciplinary skills and his influence in strong property networks. He wants to be at the leading edge of this committee and have direct input into New Zealandâ&#x20AC;&#x2122;s future in property.

Katie has the power of positive thinking behind her, and a belief that her generation must be involved in decision-making where it affects them. She is a young, progressive and supports technologies to improve communications and networking. A Beca graduate, she is jumping in at the Property Institute Board level to represent other graduates and contribute to the strategic changes which are taking place.

Katie Grindley

Vol 3, Issue 3, September 2013 Property Quarterly 37

Leadership programme

Aimee Martin Aimee’s five years of experience on the Auckland branch committee has been her apprenticeship in governance and management. She has some good ideas for the education committee based on her experience with the registration process and her graduate liaison role. Her drive and focus is quality of services, education and communication. Nicole Owen Nicole’s experience spans the property spectrum – valuation, property management, property services and property consultancy. She is the eternal student, a good role model and advocate for continuing education. Nicole has volunteered to help out the Property and Facilities Management committee. This is a group very keen to ensure that continuing education on the way to registration is at a level which clearly differentiates and demonstrates unique professional skills and experience. Craig Russell Craig has the big picture in mind already. He has recognised the problems facing the future of the profession in New Zealand and wants to influence young people’s choices when they deciding on their careers. He also knows just how important it is to run the business, so his first choice is working with the Finance and Technology committee. With this high-level perspective, Craig has the capacity to influence change. 38 Property Quarterly Vol 3, Issue 3, September 2013

Jay Sorenson Jay is a natural leader, recognising the value of teamwork and drawing on his past experience as the founder of the Hawkes Bay’s Young Professionals Group. He has stepped into the Standards Board arena with his initial objectives clearly set. As a specialist rural valuer he is aware of the diminishing valuer numbers and the risk to New Zealand’s primary industries. Jay is therefore keen to ensure that quality, consistency and overall standards are improved. He also has his eye on relationships of importance, including the banks.

Qualities sought This is the first year of our leadership programme and we are very happy with the quality of the applicants we have accepted. There could hardly be a more talented and capable group to pilot the programme than these seven. In the coming years we envisage that the number of applicants will increase. However, our focus is purely on the quality of our emerging leaders, not the quantity, so it is unlikely programme numbers will expand significantly in the future. What qualities do we look for and what do we need in the future to support the Property Institute’s succession plan? Daniel Goleman’s hallmarks describing emotional intelligence are just some of these qualities – authenticity, self-confidence, realistic self-assessment, integrity, passion for work and new challenges, optimism in the face of adversity, empathetic listening, ability to develop others, persuasiveness, extensive networking and ability to lead. I would be interested in hearing from young members keen to step forward for the programme in 2014. Marilyn Fitzgerald in the Education Manager for the Property Institute of New Zealand in Wellington.

Study tour to China

Joint study tour to China Part three John Darroch This is the third and final part of the account of the joint Property Institute and Property Council study tour to China in October 2012.

On our last day in Beijing we had an early start and were soon on the road by coach to the Beijing South railway station to catch the bullet train for Shanghai. Our group was split up into business class, first class and second class. The business class was amazing with little pods stretching three across the width of the carriage. A meal was provided, as well as very comfortable reclining seats which stretched out into a bed. First class was slightly less salubrious with four seats across the width of the carriage while second class had five. Even the second class which I travelled in was very comfortable and we had an amazing time over the journey of just under five hours. We watched the indicator board show the speed, which got up to 304 kilometres an hour, but was capable of 380. I have been on high speed trains in the United Kingdom and you can get quite motion sick. However with this train it did not happen. It was easy to get up and walk and was very much a highlight of our trip. The cost for second class is Y$550, about NZ$110, while first class is three times that. The station at Beijing was amazing, state of the art, modern and a pleasure to look around and be in. Shanghai 100 per cent commerce We finally arrived in the famous city and met our new guide, Mr Fong a native of the city, although our Beijing guide Ping stayed with us until we left China. On the bus to our hotel from the airport we learned a lot. One of my fellow passengers, Fong Zhan, who was born in China but is now a Kiwi, commented that the difference between Beijing and Shanghai is that Beijing is 30 per cent political and communist, 30 per cent tourism and 40 per cent commerce whereas Shanghai is just 100 per cent commerce. The difference was quite striking. On first impression, Shanghai felt like a big Hong Kong or a large vibrant bustling commercial city with everyone more upbeat and more western dressed than the stolid Beijing. There was less smog in Shanghai, a nice change for all of us, as well as a slightly warmer climate. In the afternoon we had free time so most of us went on the underground to find our way around this lively city. We went to Nanging Road, a famous shopping strip, and then to the traditional four-storey shopping plaza, like a department store but made up of about 100 shops on each level. It was one of those places where you had to haggle and pay about a quarter of the asking price for anything you bought such as watches, shoes or travel bags. That evening we ate locally in a very traditional restaurant that served really nice noodles, fried rice, fish dishes and fresh vegetables. It was after that meal that Vol 3, Issue 3, September 2013 Property Quarterly 39

Study tour to China

our trusty CEO, David Clark, finally threw in the towel and declared he was off to Subway for some ‘normal’ food. Excellent food The highlight of this trip for me would be the bullet train from Beijing to Shanghai as well as the visit to the Goodman Interlink Complex. The most surprising thing I found was the quality of the food. I have always enjoyed foreign food, and obviously everyone eats Chinese, but I was not sure what to expect. It was really surprising to see and experience the very high quality food that we had every day for lunch and dinner. There was a high proportion of vegetables and very little fat, which explains why the population looked so healthy with very few overweight people. Sightseeing The next day was one of sightseeing so we had the morning to ourselves. Most of us headed off on the underground to see different parts of Shanghai. I was part of a group which visited the beautiful Shanghai Museum and then the Museum of Urban Planning. Shanghai Museum has free entry and is a beautiful building of about four levels with a number of sections including the Bronze Age, sculptures, Chinese money, furniture, clothing from minority areas, and a guest exhibition of Fabergé eggs. All the exhibitions were excellent. The Bronze Age ones which date back to 2000 BC or more show the high quality of craftsmanship and development of society even that long ago. I found the furniture had been beautifully made and the costumes from the minority areas, including Tibet and Mongolia, were beautiful. The highlight was the exhibition of Fabergé eggs, which included four out of only 42 in the world, and were stunning to see. In the afternoon we headed off on our tour, the first stop being the Pearl TV Tower located in Pudong District. This is an amazing place and very much typifies the economic boom in China. Twenty years ago it was farmland with a few low-rise industrial buildings, but since then has been built into a city in its own right. It houses some of the most amazing buildings you will see in China such as the Pearl TV Tower and the Shanghai Tower. This one is still under construction and not due for completion for another two years or so. It will be the tallest building in China when completed. 40 Property Quarterly Vol 3, Issue 3, September 2013

River cruise From the Pearl TV Tower we had a good view of the surrounding area, although it was misty and cloudy so the views were a bit restricted. It is a little like going up the Sky Tower, you queue and go up a big lift. That afternoon, at the end of the tour, we went through a mock village in the Shanghai History Museum. This showed the origins of the city, and it started with the traditional Chinese village through to the more modern Shanghai including the colonial era and present day. Before going up to the Oriental Pearl TV Tower we had a river cruise on the Huang Pu River, the main river through the middle of Shanghai, and part of the Yangtze River. The river divides Shanghai into two sections – Pu Dong in the east and Puxi in the west. It is a major tourist attraction but also a working river with a constant stream of barges, tug boats and even small cruise boats, as well as numerous tourist boats. After the visit to the Pearl TV Tower we had dinner at a local Chinese restaurant in a very popular shopping district made up as a traditional Chinese village, although it was not actually old buildings. Facts and figures The next day was to be one of work, our first stop being a trip to Jones Lang La Salle, located on two floors in the Plaza 66 building in West Nanjing Road. We were given an excellent two-hour presentation by Steven McCord, the Director of Research, and Daniel Odette. Jones Lang La Salle research has 35 analysts throughout China, including 16 in Shanghai, and they track 20 major cities of China from 10 offices. They cover office, retail, residential and some industrial surveys. We heard some of the following facts and figures. The Pudong area was built since 1990 from almost nothing in 20 years. Inflation is currently around three per cent. A big effect on Chinese economy and life is what they call ‘the hog cycle’ as the Chinese eat a lot of pork. Exports have had a big role in the growth of the economy, but now it is about internal investment, including building infrastructure and property investment. The fastest growing cities in the world are in China and there is massive growth potential in GDP growth in retail sales. From 2010, vehicle sales passed the United States and the European top 15. The big problem is middle class consumption and a shrinking younger generation.

Study tour to China

Currently the consumer class equals just 15 per cent of the total population, but this is rising rapidly. All property leasehold A contributor is double digit minimum wage increases and this reflects a shortage of skilled labour. There is also a strengthening of the social safety net and harmonising of society. There have been house price controls recently which have released the pressure on saving for deposits. Those controls include limiting investment of your second home so that only first-time home-buyers can buy. Most Chinese income is divided into three areas − regular income, investment income and grey income. The survey concluded that in the top tier, the grey income was twothirds of their total income. All of China is leasehold and the following lease terms apply when you buy a property − • Industrial 70 years • Residential 50 years • Commercial 40 years. There is no law yet on what happens at the end of the lease – whether you get a renewal, or if you have to pay anything. That time is yet to come with the oldest leases still having 20 years to run. There is quite a complex ratings and taxation system, which I could not fully follow, but varies whether you are in the lower or higher price bracket of property. Rights to a concrete box Prime office rents are around RMB$9 a day in the range RMB$6 to RMB$12. That translates to a range of NZ$440 to NZ$880 a square metre. We heard about the green market, with only 10 true green accredited buildings in China. The term green washing was noted, which we think means tokenism is given to green buildings. In the residential market, there have been recent strict policy measures which have curtailed investment and the market is currently moderate. The main aim of the policy is that you can only own one house at a time. The market is controlled by first-time buyers, and 45 per cent of people upgrading. There is a capital gains tax as well as a ground rent and property rates. Capital gains tax makes it impossible to get in and out quickly and make a quick profit. We found that apartments are only finished to a shell stage so what you are buying is literally a 50-year right to a concrete box. The purchaser must carry out all their own

fit-out such as bathroom, kitchen, electrical, plumbing, and finishings such as ceilings and wall linings. What this means is that people tend to leave a lot of construction materials around the property and not fully clean it up. You cannot have your children playing on the small areas of grass because of the danger of broken glass and nails. We also noted that no-one maintains their buildings. We were told that the body corporates have rights to claim their expenses and do maintenance, but there are a lot of free riders because the rules are very hard to enforce. Offices In the afternoon we were hosted by Grant Massey of Richina New Zealand who took us through their new New Zealand House building, a four level office building in central Puxi. It is currently in a shell stage and the intention is to bring all parts of the New Zealand government operation and others such as Air New Zealand, ANZ and Fisher & Paykel together. The leasing deal on this is yet to be concluded. Grant’s targeted rent is around RMB$7 a square metre per day equivalent to NZ$500 a square metre. Finally, we visited Olivia Lin of New Zealand Trade and Enterprise in their pleasant offices at New Zealand Central in the Xian Tian Di area. This is a very upmarket shopping area with high quality apartments and refurbished buildings. It is also the entity considering moving their Shanghai support offices to the New Zealand House development. Back to reality On the final day we had an easy morning and departed the hotel to head to the airport for our 2.30 pm departure. A number of us took up the option to ride the Magler train from Pudong to the airport. This was all over in seven minutes, but worth the thrill, reaching 300 kilometres an hour although capable of up to 430 kilometres an hour. Sadly we then boarded the plan for our trip home and back to reality. Never mind, we all have some amazing experiences to share with family and workmates, new knowledge about the property world, and one or two quality fake Rolex watches and other presents. John Darroch is Director of Valuation Services for Bayleys in Auckland. Vol 3, Issue 3, September 2013 Property Quarterly 41

Annual awards

Annual Awards 2013 Fellowships awarded by the Property Institute of New Zealand ‘The award of Fellowship is made to an individual with an established professional reputation who is held in high esteem within, and has made a significant contribution to the property profession.’ Timothy Hayward

Tim began his professional career in 1973, with the Department of Lands and Survey in Hamilton. He remained with the department for 14 years in various locations before moving to the private sector as manager of property at Works Consultancy Services in Napier, which subsequently became Opus International Consultants. He remained at Opus for 10 years before joining The Property Group as a foundation employee. He now serves as their projects director. He specialises in property strategic planning, feasibility studies, market analysis, site selection, and a variety of other consultation and advice services, and has been a registered property consultant and property manager since 1997. Mark Spring

42 Property Quarterly Vol 3, Issue 3, September 2013

Mark began his property career in Valuation New Zealand. Since then he has worked in a variety of valuation and advisory roles at organisations including Ford Valuations, Wellington City Council, Transpower and Jones Lang LaSalle. He is currently employed at Opus International Consultants as a group manager. Since joining the Wellington branch in 1998 Mark has been involved in a variety of senior leadership roles, including branch Chair from 2010 until 2012, and in particularly has been an integral part of the branch’s succession planning. Although no longer on the committee, Mark continues to support and contribute to the branch activities. Tyrell Snelling

Tyrell has over 20 years of experience in property, and is currently employed as the National Director of Jones Lang LaSalle’s Project and Development Services team. He is involved in construction projects including fit-out, new builds, seismic and services upgrades, and weather tightness from a consulting and advice side as well as consenting, procurement, delivery and closeout. He was the founding chair of the Property and Facilities Management professional community within the Property Institute, as well as serving on the Property Institute’s board. He has also been an active member of the Auckland branch, and has for a long time been a regular fixture at events and conferences.

Annual awards

Fellowships awarded by New Zealand Institute of Valuers and the Property Institute Nicola Bilbrough

Matt has frequently been involved in legal proceedings as an expert witness, including before the Land Valuation Tribunal and the Weathertight Homes Resolution Service. He has also been an integral part of the Auckland branch since 2009, holding the role of Chair from 2011 until 2013. Jeremy Wichman

Since graduating Lincoln University, Nicki has been both employed and self-employed in a variety of valuation roles, through to her current role as a Senior Valuer with CB Richard Ellis. Nicki has been an integral part of both Institutes for quite some time, having served on the NZIV Council, the Property Institute Board, the Standards Board, and as President of the NZIV from 2010 until 2012. Nicki led the NZIV through a variety of highly divisive problems, with which she displayed great integrity. She was also integral to the development of the quality assurance and accreditation scheme, and put significant work into developing relationships with the banking sector. Matthew Taylor

Jeremy is employed as the New Plymouth District Councilâ&#x20AC;&#x2122;s Team Leader for asset management. He was educated both at Massey and Lincoln Universities. He has also been an active member, most recently as the Chair of the Taranaki branch from 2010 until 2012, and before that as secretary and treasurer in Rotorua. Before his move to New Plymouth, Jeremy spent 23 years in Rotorua with Quotable Value undertaking residential, rural, commercial and industrial valuations and also undertook treaty settlement work and VRB investigations. David Townsend

Matt graduated from Auckland University in 1989, and began his career at Robertson Young Telfer, now Telfer Young, where he learned from Peter Young, Evan Gamby and Iain Gribble. He held a variety of roles in New Zealand and overseas until 2003, when he became a founding director of the new practice Gribble Churton Taylor.

David has been a member of the NZIV since 1978, where he joined as a student in Christchurch. He has held a variety of roles throughout the sector, including at the Valuation Department, Wrightson Real Estate, Vol 3, Issue 3, September 2013 Property Quarterly 43

Annual awards

and his own business with Townsend and Associates. More recently he has been playing a key role with the Earthquake Commission in Christchurch, responsible for overseeing land assessments of residential land in the red and orange zones. This role has required considerable sacrifice from him in terms of the amount of time he spends away from his Rotorua home. Since moving to Rotorua, he has been a key member of the branch, including as Chair from 1999 until 2001. He recently stepped down from involvement with the committee after 16 years due to his commitments in Christchurch.

appeared as an expert witness in the High Court, District Court, Environment Court and in planning hearings. Since 1984, he has held a variety of roles in the Nelson Marlborough branch, including as chair from 1989 to 1991. John Schellekens

Richard Bennison

Dick is a registered valuer and registered farm management consultant whose career in property dates from 1977. He has been a director of Duke & Cooke, Nelsonâ&#x20AC;&#x2122;s oldest valuation practice, since 1986. He specialises in rural properties, and has had considerable experience in litigation work, having

John began his valuation career in 1989 with Valuation New Zealand, before heading overseas to gain experience in London. He became a director of Telfer Young Northland in 1997, and has since then held a variety of positions at Ernst & Young and CB Richard Ellis. John was recently chair of the Valuation and Standards Board and has done some sterling work there, including a long overdue revision of the Insurance Valuation Guidance Note and producing an index of standards and applicability. He has presented papers at numerous CPD events, more recently at the 2010 Property Summit, regarding practical application of the standards to valuations.

John M Harcourt Memorial Award Chris Stanley

The John M Harcourt Memorial Award is awarded to recognise outstanding service to the profession of valuation. This yearâ&#x20AC;&#x2122;s recipient, Chris Stanley, will be familiar to you all. Chris has been involved for a long 44 Property Quarterly Vol 3, Issue 3, September 2013

time in the furthering of the valuation profession from his involvement in the education committee, his service with the Canterbury/Westland branch, and his work on the Property Institute Standards Board. He was also on the Board of the Property Institute from 2004 to 2010, and President from 2007 to 2009. More recently, his service has been recognised on a global level with his invitation to join the IVSC Standards Board. Chris has considerable experience as an expert witness, umpire and arbitrator, and was appointed by the Office of Treaty Settlements as an umpire in relation to the Ngai Tahu Treaty claim. He also has a number of other public appointments including as a member of the North Canterbury Land Valuation Tribunal and as Crown Valuer by the Canterbury Earthquake Recovery Authority.

Annual awards

Presentation of Life Memberships Life Membership Awards are recommended to the Board and Council and awarded to Fellow members of both institutes who have rendered pre-eminent service to the institutes and the industry over a long period.

Life Membership of the NZ Institute of Valuers and the Property Institute Peter Mahoney

Peter is a Fellow of the Institute, and has been actively involved in valuation work for over 40 years all except three of which have been in private practice either as a partner or principal. Peter is an associate member of the Arbitrators and Mediators Institute of New Zealand and

practices as an independent arbitrator on a wide range of property related disputes. His extensive valuation experience encompasses residential, commercial and industrial properties including market valuations, rental determinations and arbitrations. He regularly appears as an expert witness before various judicial hearings and he is probably best known for having acted as an arbitrator in some major and precedent setting hearings. He was first appointed as a member of the Land Valuation Tribunal in 1990, and he continues to serve on it today. Peter has been involved in presenting at many Pan Pacific Congresses and was on the organising committee of the Auckland PPC. He has also served on the Auckland branch, and is widely recognised as a leading member of the valuation profession in New Zealand. His current role as a director of Strategy for Property Limited includes providing corporate and trust advice on property related matters and serving on several boards and trusts.

Life Membership of the Property Institute Paul Keane

Paul has had a 43-year career focussed on the shopping centre and retail property industries. He is a Fellow of the Property Institute, and is one of the most respected retail property professionals in the country. Paulâ&#x20AC;&#x2122;s career started with the Fletcher Group in

1969 and from 1984 till 1989 he was General Manager Challenge Properties Shopping Centres during which he was involved in the pioneering and development of shopping centres. In 1989 Paul formed the Retail Consulting Group with others. For the past 23 years the company has undertaken retail and shopping centre developments throughout New Zealand on behalf of a range of clients, including Westgate shopping Centre in Auckland, Fraser Cove in Tauranga and Rotorua Central. Paul is now the Executive Chairman of the Retail Consulting Group. He is also a Fellow of the Property Institute and a judge on the annual Property Industry Awards. The Retail Consulting Group are respected in retail and property circles, and maintain a close understanding of retail environments and retail activities domestically and internationally

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