Nov/Dec 2015
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Ngai Tahu eyes Auckland action Hugh de Lacy Ngai Tahu’s going to Auckland because that’s where the action is – and will likely remain – in the residential property market, according to the Christchurch-based iwi’s general manager of property for Auckland, David Kennedy. “All of our property asserts are in the South island and predominantly in Christchurch. “We’re wanting to create some geographic diversity, and the obvious place for us to look towards is the Auckland market,” Kennedy said. “All the commentators are saying that there’s a high level of demand which isn’t being met yet, and won’t be for a few years, so it’s the obvious place for us to look.”
Kennedy said that the decision to look north and his recent appointment as the manager of that initiative - had nothing to do with the spread of the iwi’s membership beyond the South Island. “It’s a straight commercial rather than an ownership decision. “Auckland has a large population base, strong economic growth and demand for property activity, so it’s a natural place for us to look towards.” Nor does it signal that the company is shutting up shop in Christchurch or the South Island. “Some of our big land sub-divisions [in Christchurch] like Wigram and Preston Grove are coming to the end of their natural life, and I think the market here will change because most of the
post-earthquake demand is being satisfied by Ngai Tahu sub-divisions and others.” Kennedy said the slowing of the rate of increases in Auckland house prices, which averaged $931,807 in November compared to $910,000 in August, did not deter the company either, as these appeared to be the result of new government rules restricting investment, combined with an easing of the capital outflow from China. The slowdown in Auckland also appears to have given new life to the provincial residential market, with Waikato and the Bay of Plenty in particular benefitting from the Auckland overflow. Nationally, house prices averaged $555,729 in November, up from $550,000 in October.
The softening outlook for interest rates, with the Reserve Bank mulling a further cut to the Official Cash Rate (OCR), seems unlikely to reinflate the Auckland market to any great degree, Kennedy said. “Interest rates have been quite low by historic standards for a few years, and the market’s adjusted to that reasonably well.” While Ngai Tahu’s northern focus will be on the residential market, that should not imply a neglect of opportunities in the commercial sector, Kennedy said. “We’ve got an investment portfolio which includes commercial and retail assets, and we’ve got some successful industrial sub-divisions as well, so we’ll still be in those areas,” he said.
Manawatu hub
on the market Chris Hutching Wallance Developments has placed its latest commercial retail hub in the Manawatu on the market. Wallace Developments headed by Jonathan Wallace and based in Havelock North has been a long term player in places like Palmerston North, and more recently in Auckland and Tauranga. Business picked up after the 2008 crash because many other developers failed. Many developments are for the same clients. For example, Wallace Developments is currently building several outlets for Z Energy in the upper North Island. Mr Wallace says the company usually has 15 to 20 projects under way and about the same number in the pipeline. he company retains some projects and markets others. He favours auctions and has three offerings about to be auctioned including the FMG office building in Hamilton, the Department of Corrections building in Palmerston North, the Ministry of Education building in Gisborne, and the Rangitikei Junction hub. The junction hub is the biggest commercial property in Bulls with anchor tenants include Foodstuffs with its Four Square supermarket, and BP Oil operating its BP service station and truck stop, and Rangitikei District Council.
INSIDE
New era for New Plymouth The new Novotel Hobson Hotel in New Plymouth is getting close to opening its doors. The hotel will be an important addition to the region. Developer Philip Brown says it will be the first large-scale hotel development in the city for several decades, as well as the first
No concerns with rate cut - PAGE 2
Slight dip in Auckland rents - PAGE 2
international brand hotel in the city. Completion is expected this month and the hotel will employ around 70 staff. With a predicted upswing in the oil and gas industry around late 2016/early 2017, Brown says the opening of the hotel will be timely. See story - page 4
Ethical metal market grows - PAGE 3
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