Ground rent prepay deal

Auckland City waterfront. Photo / Richard Robinson.

Buyers of hundreds of new Auckland waterfront apartments will escape the leasehold ground rent trap.

John Dalzell, Auckland Waterfront chief executive, revealed that the buyers would be able to prepay a 125-year ground rent when they bought their new places, which will be built on council-owned land.

The Wynyard leasehold structure means buyers sidestep huge price rises for renting land where construction of 500 to 600 new apartments is due to start next year. That differs from the Viaduct Basin area where private company Viaduct Harbour Holdings' land is reviewed every few years and new leasehold fees are set to market rates, often resulting in big price rises.

But the Wynyard apartment leases will be like Princes Wharf and terminate around the year 2140, meaning whoever owns the places then no longer has the right to the land after that term.

Fights over leasehold land have arisen across the city, on the 110 residential sites surrounding Cornwall Park and at Quay Park, where Ngati Whatua owns the land.

Kiwi Income Property Trust prepaid ground rent for its new ASB North Wharf, the largest new office block in the Wynyard Quarter, and ground rent on the Fanshawe St/Halsey St site of Fonterra's new HQ has also been paid in advance.

Dalzell said prices for the new Wynyard apartments could start from around $500,000 for one bedroom and that sum would cover the 125-year leasehold term.

Dalzell ruled out apartments starting at $800,000.

The highest price for a luxury pad in the newly developing zone could be more than $2 million, he said, but that would be a particularly hi-spec residence.

The new apartment blocks will be on the corner of Halsey St and Madden St, next to the soon-to-be built Auckland Theatre Company building and overlooking Viaduct Harbour, as well as on four separate sites between Daldy, Beaumont, Madden and Pakenham Sts.