Property 2000: When the deals went south

By ANNE GIBSON property editor

Life is hard when you get more rejections than acceptances.

So it was for the property industry during 2000, a year marked more by deals turned down than done.

As the sector headed south in terms of values, buyers also took the southern-most routes available.

The biggest turn-down was over a $200 million building - the tallest and newest tower in the country, the 40-level Royal & SunAlliance Centre in Shortland St.

Kiwi Income Property Trust was to buy it, but rejected it, saying it had enough exposure to the building with its 34 per cent stake in Kiwi Development Trust.

But that changed when the building reached 80 per cent occupancy, with the property trust making an offer for the other two-thirds of the development trust through a share swap rather than cash.

Also keen to walk away from a deal was Australian entertainment trust MTM, which tried throughout the year to turn down the Force Entertainment Centre, which Force's Peter Garner reckoned was worth $75 million.

Force thought it had a deal after MTM contributed $50 million towards developing the Queen St cinema and entertainment venue, but MTM argued the other way in the High Court, which has so far seen it the Force way.

Listed property company Trans Tasman also walked away from a big deal. Its 30-storey, $100 million tower planned for the former Auckland Star site between Shortland St and Fort St was knocked on the head in July.

"Not the right time," said Trans Tasman boss Don Fletcher.

Another turn-down came from the Auckland City Council, which rejected transforming the 105ha Winstone quarry in St Johns/Mt Wellington into a new suburb.

Fletcher Properties' claim to have council backing for the scheme appeared in the Herald on April 1. That fateful date proved a joke, because by November the council had ruled against the plan.

Hilton headed in a southerly direction also when it walked away from the deal to buy the new $57 million Hilton at the end of Princes Wharf. Scheduled to open in October, the job is well behind schedule and may finally open next month. Developer David Henderson was talking to Asian investors late last year about buying the hotel.

Some brickbats and bouquets for the property industry in 2000:

Biggest deal, commercial: The $55.6 million sale by AMP NZ Office Trust of the Wellington Parkroyal Hotel, announced on October 6. Sold to Bass Hotels and Resorts.

Second-biggest deal, commercial: AMP's $40 million purchase of the Manukau Supa Centa.

Biggest new job announced: Westfield's $450 million development of the Newmarket mall, announced in early August.

Biggest shakeup: The July 1 launch of Real on the residential real estate scene, an alliance between lawyers and real estate agents which ruffled more than a few feathers.

Bravest job: David Henderson's Princes Wharf revamp, bringing a building that looks like a cruise ship to Auckland's waterfront. A grand gesture, but dogged by disputes with the builder.

Most prominent residential architect: Lawrence Sumich, brought in to save the White Heron apartments and redesign them to meet the community's needs. Also designed Bill and Bronwyn Buckley's $5.5 million house in Arney Cres, a gorblimey mansion with computerised 10-pin bowling alley.

Most perplexing double-deal: AMP's ability to make everyone who opposed its $171 million waterfront tower go away. Andrew Krukziener pulled out at the 11th hour, just before a High Court case. Then the Society for the Protection of Auckland Waterfront, made up of prominent architects, also pulled out. None of the parties would say boo to a goose about it all. Begs the question about whether money changed hands.

Biggest new office tower announced: AMP NZ Office Trust's $171 million Pricewaterhouse-Coopers tower on Auckland's waterfront, now being built.

Good guy of the industry: Peter Degerholm, in Wellington, who spent the year working behind the scenes to have the Government introduce a law to protect subcontractors. He succeeded, too, with draft legislation from Nelson MP Nick Smith and endorsement from Associate Commerce Minister Laila Harre.

Most controversial deal: Toss-up between the dust-up over the approval of AMP's waterfront tower and Westfield's proposal to build the 11-level Newmarket mall.

Biggest existing construction job: Mangere sewage ponds overhaul, a $450 million job.

Biggest restructuring: Waltus Investments' deal to roll 29 property syndicates into one $227 million company - a move not popular with all the syndicate holders, who dragged the plan through special meetings, the High Court at Wellington twice and eventually the Court of Appeal. One group of 57 investors spent $200,000, conceding defeat early last month.

Most expensive house sold: 139 Arney Rd, Remuera, for $6.75 million, from Takapuna investors Bill and Diane Foreman to a New Zealander returning from California and working in the IT industry.

Second most expensive house deal: Arney Cres, Remuera, for $5.5 million to high-tech whiz couple Bill and Bronwyn Buckley of Buckley Systems. Vendor: Peter Turner of Sleepyhead Beds.

Most disappointing news: The continual slide in commercial property values, as companies took a slash-and-burn approach. Hundreds of millions were wiped off the value of our downtown office precincts.

Single biggest blow: Trans Tasman axing its inner-city office tower. Good news for rivals, but not a healthy sign for the market.

Best historic deal: The refurbishment of Landmark House in Queen St, with Trans Tasman taking a sensitive approach and using Britomart-winning architect Mario Madayag to draw up the plans.

Worst blow for the industry: On-going problems with builders going belly-up. Especially Goodall ABL (down for $20 million) and GFF (down for more than $1 million).

Most perplexing issue in property: What does the name of failed builder GFF really stand for?

Big turn-down: Hilton refusing to buy its new hotel at the end of Princes Wharf. It will operate there, but won't buy the property.

Longest-awaited decision: Auckland City Council's Britomart redesign, announced late in the year. Met with sighs of relief from the property industry, after the axing of the much larger project.

Herald Online features:

2000 - Year in review

2000 - Month by month

2000 - The obituaries