Tauranga Master Builders president Brian Foster, of Alterations Plus, said a lot of the business was going to group housing companies. "But having said that, it does flow on to all the other sectors, like commercial builders. Most of the guys seem to be reasonably steady, if not flat out."
However, questions remained on the impact of the Reserve Bank's new loan-to-value ratios which restricted the amount banks could lend for homes and its impact on the building industry in the next few months.
Mr Foster understood that the requirement for a 20 per cent deposit had dried up lending. It had led to young families trying to get into their first home pitching in with 10 per cent of the deposit, with some banks drafting loan agreements in which the family members were repaid first, say over five years.
A joint venture partner in the development of the Tui Products building, Steve Birkhead of Wallace Development Company, said the consent was handled in two phases to accommodate the major change in national fire codes which took effect in April.
The first consent issued in March was for the $1.1 million bare bones of the building that covered the equivalent of nearly two rugby fields. Mr Birkhead said they wanted to make the new building as compliant as possible with the new code. It meant reviewing the design to the satisfaction of two fire engineers and the council. Everything had chugged along without undue hassles.
The building's future ownership was now subject to the launching of a new unlisted fund focusing on investment in commercial property in the Bay of Plenty.
The Tui Products building will be the first acquisition of Tauranga-based Pacific Property Fund, which is targeting retail investors by an initial public offering of $7.8 million - primarily to help fund the acquisition of the Tui building. Tui will lease the site for 20 years, with two 10-year rights of renewal, beginning with a net rental of $1 million.