This shows plans for Auckland's Quay Park, featuring the Downtown stadium, hotels, commercial, retail and residential space.
What might new ground rents be next year at Te Tōangaroa Quay Park? How did architects celebrate our tallest apartment tower’s topping off? How did Precinct Properties get into the apartment market? What’s coming to Mt Eden? How does Ikea fit into Sylvia Park? All answered in today’s column.
Owners of an 81-unit Auckland apartment complex fear annual leasehold ground rents could leap from $16,000/unit to $30,000/unit next year but the landowner says nothing is decided yet.
Dr Michael Rehm, body corporate chairman of Parnell Terraces near the railway line, said increased height and density planning allowances could hugely spike land values and result in a big ground rent leap from August 2025 when the new rents will begin.
Leasehold payments of $16,000/year per unit at Parnell Terraces have been charged since 2018.
But the seven-yearly review will set new rates from 2025-2032, he said.
And $30,000/year would be the stand-still do-nothing cost of simply owning one of the Parnell Terraces’ unit titles, because apartment owners don’t own the land those units stand on.
“You’ll have a situation where there will be wholesale defaults,” Rehm, a University of Auckland academic, predicted, fearing unit owners would be unable to afford the rise.
“We will get a letter in March next year that will give the assessment of the land value. Then, we will most likely get a valuer and challenge that. Because of the increase in height allowance, we expect to be charged around $30,000 per annum per unit,” he said.
Grant Kemble, Ngāti Whātua Ōrākei Whai Rawa chief executive, encouraged people not to leap to any conclusions about the reset in leasehold fees at Quay Park and in Parnell next year.
“There will be a valuation etc process to go through and we don’t think it’s useful to speculate before then,” Kemble said. “It would be unhelpful to all parties involved to speculate on the outcome of the August 2025 ground rent review. We have a well-defined and transparent process outlined in our ground leases with each of our lessees that we will follow when the time comes.”
But Rehm said many other Te Tōangaroa Quay Park and Parnell leases on Māori-owned land would come up for review early next year.
The problems he and his neighbours face will be reflected throughout the area, he predicted.
Other buildings on leasehold land in the area include the Spark Arena, a Woolworths supermarket, and large apartment blocks Scene One, Scene Two, and Scene Three, many office blocks, hotels, shops and car-parking spaces, the BNZ offices, apartments at Cotesmore Way and Dovedale Place, Grant Central serviced apartments, Hudson Brown apartments, Les Mills Britomart, the Adina Apartment Hotel Auckland Britomart, the Docks and the Landings apartments, Mirage apartments and Quay Park Health Centre.
In 1996, Ngāti Whātua bought the ex-railway lands known as Quay Park from the Crown and on-sold leasehold interests for development, retaining land ownership.
The latest annual report for Whai Rawa for the year to June 30, 2023, says: “Investment properties since the inception of Whai Rawa in 2013 have been very positive, with the aggregate valuation rising from $544 million in FY13 to $1399m in FY23.”
The Court of Appeal ruled this month in favour of Whai Rawa and against Parnell Terraces in the leasehold land dispute. Unit owners sought to claim the Māori entity’s leases should either be set aside or that their rent be varied on the basis that it was either harsh or unconscionable, or had been used in a harsh or unconscionable manner.
Whai Rawa owns more than 160ha of commercial and development land including big ex-Navy North Shore plots.
Rehm estimates around 15,000 homes and units are on leasehold land in New Zealand and has noted British moves to reform fees on this form of tenure.
New Zealand’s tallest apartment tower was topped off late last month.
Architects Peddlethorp marked the milestone at Seascape, the new Customs Street East Tower developed by Shundi Customs and built by China Construction.
Last Wednesday, Peddlethorp said: “Late last week, our Auckland studio had the pleasure of touring the site, ascending to level 51 and taking in some breathtaking views of the Waitematā Harbour. Congratulations to Shundi Group and all involved in this remarkable engineering achievement. As architects Peddlethorp takes great pride in collaborating with lead engineers Mott MacDonald in crafting this new iconic addition to the city’s skyline.”
Seascape is now 187m and 56 floors.
Nearby, the Pacifica is 57 levels but slightly shorter at 178m tall. The Herald covered this in an article in 2018 headlined Skyscraper wars: new 187m Auckland tower claims record.
Precinct Properties will take full control of three Auckland apartment construction sites with chief executive Scott Pritchard announcing the full takeover of Lamont & Co.
Precinct had owned a 50 per cent stake of that apartment developer but is buying the remaining half for an undisclosed sum.
That deal announced last week will see it get sites in Newmarket, Parnell and Onehunga.
Precinct listed details of those:
The Domain Collection
York House
Fabric of Spring Street, stage two
Last Wednesday, Precinct announced it would build around 500 student apartments on Queen St in the CBD in a tower up to 30 levels tall. Those will be retained and rented by the company.
Precinct is also buying a Mt Eden site on the Valley Road/Dominion Rd corner from Eke Panuku and will build apartments there too. Those units are to be sold. How much height and density can go on that Mt Eden site has not been revealed but people have since expressed interest. The site of more than half a hectare is beside many single-level bungalows and villas.
As well, Pritchard said Precinct plans 350 apartments on the Downtown Carpark site between Quay St and Customs St West.
Plans for that prominent Mt Eden site could see big changes in the neighbourhood.
A developer the size of Precinct doesn’t build small, no matter where it goes.
When Bayleys Real Estate marketed that Mt Eden site Precinct is buying, it noted resource consent had been granted for 92 units in four buildings three to five levels high. That project had been “thoroughly reviewed by the council’s Urban Design Panel and approved by the Environment Court”, advertising said. The land was zoned business local centre and residential for terrace housing and apartment buildings.
The site is 4km from the CBD, freehold and 5253sq m in eight separate titles with a collection of older structures: factories, warehouses, shops and dwellings. Short-term tenancies are in place with demolition clauses, Bayleys said.
Prepare for a big announcement from Precinct on Mt Eden.
Kiwi Property Group’s annual result last month pointed to how Ikea completed the first phase of its Sylvia Park ambitions.
That showed how a live/work/play model could work on the one site: apartments in the new three-block Resido housing project, offices for ANZ and at 3 Te Kehu Way and recreational activities via movie theatres, restaurants and dining outlets.
Kiwi said the scheme was part of a 30-year master plan for its site, showing Ikea as the sixth piece of the jigsaw, with a 34,000sq m store well under construction now.
“Phase one of the precinct’s transformation comes to fruition,” Kiwi’s graphic said.
Resido’s three-bedroom two-bathroom units are priced at $1235/week, Kiwi said. Studio units with a single bathroom start from $625/week.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
Auckland crane numbers fell to an eight-year low.