Wellington's Charles Fergusson Building was part of the four-building sale deal. Photo / Supplied
A bunch of commercial, industrial and medical properties in Auckland, Hawke’s Bay, Wellington, Christchurch and Central Otago were sold for $1.4 billion in 2022.
Singaporeans and Australians were involved in some of the biggest deals but sharemarket-listed companies, a listed trust and private businesses were also active.
Ian Little, associate research director in Auckland for Colliers, released a list of the year’s 11 most significant sales made public.
Although the residential market is down, interest rates are up and inflation is rising, Little’s list indicated the commercial property market remained active.
The list was topped by two deals from NZX-listed Precinct Properties headed by Scott Pritchard. The company dominated deals, having last year also made the largest sale which was half the ANZ Centre on Albert St, sold for $177m.
1. $377m: Four buildings in Wellington and Auckland
Vendor: Precinct Properties
Buyer: Precinct Pacific Investments Limited Partnership (Singaporean and Kiwi)
Precinct Properties sold four office buildings to a new entity majority controlled by the Singaporean Government’s property investment arm. Precinct retains a 24.9 per cent stake in the venture so didn’t completely sell out.
Wellington’s Mayfair House, at 54 The Terrace, and Charles Fergusson Building, at 38 Bowen St, and Auckland’s Wynyard Quarter properties at 10 Madden St and 12 Madden St, were sold into a new venture.
The buildings are now owned by Precinct Pacific Investment Limited Partnership, which is the Singaporean Government’s Reco Pacific Private and the Kiwi landlord.
Many civil servants work in the two Wellington buildings. All four were listed as being worth $382,505,302, although the total consideration did not represent the amount received. The deal had to win clearance from the Overseas Investment Office. Precinct announced on September 15 that it had clearance.
Pritchard indicated the 75.1 per cent Singaporean-owned and 24.9 per cent New Zealand-owned business planned to grow assets to more than $1b and that Precinct Properties would build more new developments the business would buy.
“The establishment of the partnership represents an important milestone in delivering on our strategy. Building on Precinct’s high-quality portfolio created from our development pipeline, we are committed to creating further long-term value for our capital partners and Precinct shareholders. We will continue to focus on working alongside capital partners to leverage Precinct’s capabilities and take advantage of market opportunities. We continue to anticipate this partnership growing to around $1 billion” Pritchard said on September 15.
2. $240m: Two Wellington buildings
Vendor: Precinct Properties
Buyer: Joint venture between PAG and Precinct Properties
Buildings at 40 Bowen St and 44 Bowen St in the Capital were sold, cleared by the Overseas Investment Office.
Precinct bought Bowen Campus in 2012. It is 1ha of freehold land in a prime position in the centre of the Government precinct, adjacent to the Beehive and Parliament Buildings in Wellington.
Precinct announced the sale to the new joint venture on November 29, 2022.
The company had agreed to the establishment of a new joint investment partnership with global private investment firm PAG. The partnership would buy 40 and 44 Bowen St for $240m, following the completion of 44 Bowen Street, anticipated mid-2023. PAG will have an 80 per cent interest with Precinct holding a minority interest of 20 per cent, the company said.
3. $213m: Under-construction Aurecon headquarters, Newmarket
Vendor: Private family-owned investors/developers Mansons TCLM
Buyer: Stride Property
This sale of the under-construction Aurecon headquarters went unconditional in April. Culum Manson of Mansons TCLM had previously spoken about the development, where international engineering, design and advisory company Aurecon is anchor tenant.
Tracey Ryan, Aurecon managing director, said the business had taken a 12-year lease on lower levels of what is to be a nine-level building on the corner of Carlton Gore Rd and Clayton St in Newmarket.
That is directly opposite 139 Carlton Gore Rd, the older premises where the business was for about a decade.
Last April, it shifted to level three of Air New Zealand’s building at 185 Fanshawe St because its Newmarket premises did not meet international requirements set by the consultancy. Aurecon gets naming rights, 32 basement carparks, ground floor reception, half of level two, all of level three and will be able to use co-worker space elsewhere in the new 6-star green building.
Culum Manson said last June that Jeremy Sim of JLL had leased the space. Mansons started building the 13,865sq m block without pre-leasing because post-pandemic demand was so strong.
4. $160m: Papanui’s Northlands Shopping Centre
Vendor: Kiwi Property Group
Buyer: Mackersy Property
Adam Copland, Mackersy investments and transactions property director, said a Christchurch mall was one of the country’s biggest sales in 2022.
“Northlands has a large landholding and is an iconic landmark in Christchurch with a good mix of national anchor tenants along with a diverse range of small to medium businesses. We are looking forward to maximising the potential of this opportunity.”
Northlands Mall is a large single-level covered shopping complex with a gross lettable area of 41,807sq m, of which 98 per cent is leased to national retailers like The Warehouse, Farmers, Countdown, Whitcoulls and Kathmandu, the buyers said.
In 2018, a dining conservatory and outdoor seating area were developed to complement entertainment tenant Hoyts.
5. $95m: Six buildings, Kawerau Precinct, Lake Hayes
Vendor: Sanderson Group of Tauranga
Buyer: Vital Healthcare Property Trust
The Kawarau Park Health Hub, Eleventh Ave, Lake Hayes is six separate buildings anchored by a three-theatre, acute, 13-bed Southern Cross Hospital, with medical consulting, imaging and retail tenancies. Vital says it is in the intensifying area of Queenstown and services the wider Central Lakes District. The nearest alternative surgical facility is more than 188km away, being Southland Hospital and Southern Cross Invercargill. An additional two-floor medical building, which formed part of the acquisition, was completed in late 2022 adding medical consulting and short-stay accommodation.
Tauranga retirement village pioneer Fraser Sanderson’s company was the vendor.
6. $65m: 35 Graham St, Auckland CBD
Vendor: NZX-listed Asset Plus
Buyer: Mansons TCLM
This empty building was once owned by Auckland Council as a service centre but Asset Plus is building the council a new northern service centre. So staff vacated this building, which has been empty for some time and used as a temporary vaccination centre. Then the business, headed by Mark Francis, said this year it had sold the office block above Fanshawe St.
The council had owned the building but leased it after Asset Plus bought it, with big plans for the transformation.
Last year, Francis said plans for the office block were now back on after previously being ditched when the pandemic hit. Resource consent had been granted for the company to add three new levels on the existing office building, taking it from 12,900sq m to 25,800sq m, he said at the time.
The changes to create a statement building were designed by Woods Bagot.
7. $60m: Hobsonville data centre
Vendor: Unknown
Buyer: CDC Datacentres NZ
The Herald reported two years ago that CDC planned $300m data centres for Hobsonville and Silverdale. NZX-listed Infratil revealed details of two massive cloud computing data centres being built in Auckland’s northwest: One at Hobsonville, the other at Silverdale. An investor day presentation said a “$300m+ initial investment” was being spent on the twin data centres - dwarfing other local server farm efforts including IBM’s $80m build in East Tamaki last decade, and Datacom’s $52m overhaul and extension of four data centres last year.
The two centres are being built by Canberra Data Centres, 48 per cent owned by Infratil. Both centres were planned to be completed this year and go live.
8. $58m: Hastings industrial property
Vendor: Undisclosed
Buyer: Centuria Capital
ASX-listed Centuria Capital bought an industrial-zoned cool store and packhouse with land for further development. The property is held by the company’s New Zealand industrial fund.
The bulding is leased to Crasborn Fresh Harvest, part of the Freshmax Group, on a 20-year triple-net lease.
“The landlord-friendly triple-net lease structure means that in addition to meeting the standard repair and maintenance costs, the tenant will be liable for all capital expenditure during the term of their occupation, insulating the Fund from both operating and capital costs,” Centuria said at the time.
Freshmax, established in 1995, says it is one of the region’s top fresh produce exporters and marketers.
9. $52m: Healthcare building, Christchurch
Vendor: Private local investor/developer Box 112
Buyer: Vital Healthcare
Vital bought a relatively new building at 68 St Asaph St on the site of the former Christchurch Central Police Station, which was ruined by earthquakes. Local developers Box 112 built the new health and technology hub.
Vital said its new building was about a third leased to life sciences manufacturer Syft Technologies. A third is being renovated for maternity care for Te Whatu Ora (Canterbury) and due to open in early 2023. The last third has a two-year rental underwrite and is expected to be leased once seismic upgrade works are complete in early 2023.
Vital’s purchase included 1600sq m of land it wants to develop further new healthcare floorspace. The site is just 300m from Christchurch Hospital so the trust sees potential in its purchase and expansion. Vital describes its purchase as being core to its healthcare precinct strategy.
10. $49.35m: Ōtāhuhu industrial property
Vendor: Unknown
Buyer: Goodman Property Trust
The sale of the Sleepyhead manufacturing facility - a 4ha property 41-71 Great South Rd in Ōtāhuhu - settled around May. Goodman said it regarded it as is a medium-term redevelopment opportunity. The trust holds it as part of a greenfield/brownfield development pipeline of sites it says will result in it building more than 400,000sq m of urban logistics space.
Agents said when selling earlier this year: “Rarely does such a massive centrally located industrial zoned property come to market! Take advantage of this extremely rare opportunity to secure a 4.0235ha land holding in a tightly held area with historically high demand and low vacancy.”
The property is between State Highway 1 and State Highway 16.
11. $48m: 44 The Terrace, Wellington office block
Purchaser: Not announced
Vendor: Kiwi Property Group
The 12-level office block has been rented to Government tenants, mostly on long-term leases, Kiwi said. A big refurbishment and seismic strengthening project was completed five years ago.
Kiwi bought the building in 2004. The block had a weighted average lease term of 7.7 years, was valued at $53.5m and was last refurbished between 2015 and 2017.
In 2015, the company said the block would get a $12.6m upgrade. Kiwi had then written three new 12-year Crown lease agreements across 84 per cent of the building. The lease agreements over 10 of the building’s 12 floors of office accommodation, or 8059sq m of space, are with the Tertiary Education Commission, the Commerce Commission and the Energy Efficiency and Conservation Authority.
Back then, the block was valued at $23.5m but was projected to be worth $38.5m once the work was done.
'I can't see this lasting unless they have a budget to lock fullas up in jail.'