Townhouse residents bid to buy their land

Residents of one of New Zealand's largest high-density housing estates are negotiating to buy their land.

Townhouse owners in the 2.2ha 258-unit Beaumont Quarter estate opposite Victoria Park on the fringes of central Auckland want to freehold the site.

They bought their homes on leasehold plots and are paying $3.1 million annual ground rent.

Bruce Whillans, the national director of institutional investment properties for CB Richard Ellis, has run a campaign to sell the land and received 11 tenders which have been narrowed down to three bids.

The site valued at about $50 million is owned by Beaumont Partners.

If the $50 million price holds, owners could have to pay more than $190,000 each.

"It's a very tidy asset because ground lessor interests have been widely sought after," Mr Whillans said.

." The property is under contract to a buyer and their interest is in freeholding it. It is always difficult to get 258 owners of the individual units to co-ordinate themselves to putting in a bid. Someone is buying it to enable the owners to freehold it."

If the owners got their land, it could set a precedent, paving the way for other leasehold sites to be freeholded, he said.

Beaumont Quarter Residents Society chairman Neville Corbett said no deals had yet been signed.

Conditional arrangements were still under discussion and all subject to confidentiality agreements.

"It's early days," he said. "There's a procedure going through at the moment."

Other residents said a newsletter just issued to Beaumont property owners gave information on the prospect of freeholding the site.

The cost of this would not be much more than the full annual ground rent, the resident claimed.

Mr Corbett said this was "rubbish" but refused to say what price was being put on the deal.

Nigel McKenna, of the Melview group of companies, developed the big Beaumont Quarter but kept the ground at the old gasworks site.

A ground-rent increase from $900,000 a year to a proposed annual $4.4 million caused an outcry among residents who then battled to have it pruned.

Apartments were selling at low prices and real estate agents cited the ground rent rise was as a reason.

BEAUMONT QUARTER

* Master-planned St Marys Bay precinct.
* Residents pay $3,129,664.88 annual ground rent.
* Site is 500m from city waterfront.