Anne Gibson

Anne Gibson is the Property editor of the NZ Herald

Trouble on Auckland waterfront

Princes Wharf apartment owner disputes value as outgoings soar.

The Hilton Hotel, which sold recently for $40 million, sits on one of New Zealand's most prestigious pieces of real estate. Photo / Richard Robinson
The Hilton Hotel, which sold recently for $40 million, sits on one of New Zealand's most prestigious pieces of real estate. Photo / Richard Robinson

A 207 per cent rise in outgoings has left a Princes Wharf apartment owner fuming. He estimates that the value of his property has halved in seven years but a management executive disagrees.

Stephen Suess said he faced unpalatable cost increases on his unit in Shed 23 and spoke out after Scene Three apartment owners on Beach Rd decried a proposed 470 per cent outgoings rise, partly due to a big leasehold land bill increase.

But Mark French, director of the wharf's overall site manager, Dockland Management, said fee increases were in line with the area, particularly the nearby Viaduct.

"Everything is pretty good down here at Princes Wharf," French said. "These apartments are leasehold, which doesn't always appeal to everyone investing in the property market but, ... generally, owners are happy."

Apartment values were being retained but carpets needed replacement, buildings needed painting, and charges were not high for the standard provided, he said.

"With operating expenses, there's fluctuations from time to time and the buildings down here are up to 11 years old, in a marine environment, and require more repairs and maintenance than the average building.

"Princes Wharf is probably one of New Zealand's premier and most prestigious [pieces of] real estate and people like to have things very nice but sometimes you get displeasure between people who want high standards and others who are investors and want a different standard."

Suess said he was astonished at annual bills being charged for units all along the waterfront.

"We bought a three-bedroom apartment on the top floor for $730,000 towards the end of 2005.

"Our outgoings were a bit over $13,000 per year at the time. The body corporate just went up this month and so now the outgoings are just around $40,000 per year. We tried selling the apartment last year and, in fact, had it up for auction and no one was interested.

"In fact, a similar one sold for $375,000 around then."

That had a $720,000 CV which Suess said was unrealistic.

"It was clearly wrong, as shown by the prices equal apartments were selling at, but the realtor at the time told me to not say anything as it would hurt the sales potential of the place," he said.

Shed 23 stands between Shed 22 and 24, all facing west.

The Hilton is in Shed 21 at the northeastern tip of the wharf.

Suess said he wanted other unhappy owners to speak out but said they feared publicity would hurt the value of their apartments.

"From what I hear, we could not even get enough rent for the unit to cover the outgoings without any mortgage anymore, so right there from an investment point of view these apartments are worthless."

He and his family moved to New Zealand from California in 2002 and he now lives in Kerikeri, while a family member lives in the Princes Wharf unit.

He had lived in England and assumed New Zealand land leases were like British ones.

"Well, I was very mistaken and am sorry we ever bought the place. If anyone ever asked me, I would strongly suggest they do not purchase leasehold land in NZ."

As outgoings go up and rents do not keep up, the returns go south and investors are advised to sell out and leave, which collapses the price of the apartments, he said.

"Couple this with the apparent and utter lack of any control over costs on the part of owners and, in our case, a lack of expenses transparency on the part of those in control and, well, the confidence to own such apartments evaporates," he said.

"I suspect the next step is that new developers will realise that apartments are too cheap along the Auckland waterfront and thus will not be able to build new ones at a profit and the waterfront development so desired by the council will come to a halt."

He wants the Government to provide the framework for what he says should be a fair and equitable relationship on leasehold land..

Gary Bottema of Colliers International, which manages the wharf complex, said he could not answer questions about fee rises at the wharf and referred questions to Docklands.


Princes Wharf

*Six 'sheds' designed by Colin Leuschke

*More than 300 apartments

*Cruise-ship theme in building design

*Developed by David Henderson's Kitchener Group

*Hilton Auckland just sold for about $40m

*Weathertightness repairs have been needed

*Managed by Colliers International Property Management

Colliers works for Docklands Holdings


What they said

"... from an investment point of view these apartments are worthless."
Stephen Suess, Shed 23 apartment owner

"These apartments are leasehold which doesn't always appeal to everyone investing in the property market but ... generally owners are happy."
Mark French, director Docklands Management

- NZ Herald

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