Rent-to-buy deals in lap of luxury

The developer of the Eleven twin towers building, Rob Donald, has organised rent-to-buy agreements in an effort to sell his remaining luxury apartments overlooking Main Beach at Mount Maunganui.
Dr Donald, who designed and built the 11-storey building at the start of Maunganui Rd, has sold 39 of the 65 apartments and said his funder, Bank of Scotland International [BOSI], was "very supportive" of the development.
He said the bank viewed Eleven as one of its prize investments. "We are going through a difficult stretch in the economy. It's been very slow sledding but we have some good owners," said Dr Donald, who also developed the nearby Hot Spot apartments, and Customhouse apartment, office and retail complex at the Mount.
He said he was doing long-term leasing with "good quality people who are with us for 12 months, and that adds life [to Eleven]".
Four people had taken up the rent-to-buy arrangement, under which they paid weekly rents for up to six months before deciding whether to buy. A purchase price was already decided and the rental paid was deducted if the tenant decided to buy.
Dr Donald said a woman in her 60s from Redcliffs in Christchurch was moving up in early April to rent for two months to get a feel of the Mount. "She's looking for a change in lifestyle." He was also talking to an elderly couple who wanted to spend six months in New Zealand and six months in their 500sq m house on the Malibu cliff in California - where their bedroom was 100sq m.
"They have family here, and what I'm finding is that buyers have changed from being speculative to having more direct reasons like family connections.
"There is interest from Australians with family connections, and with the Australian dollar being strong this is a good deal," said Dr Donald. "I'm confident we will get the right results. We picked up a prestigious [NZ Institute of Building] award - highly recommended for projects between $40million and $70million construction costs."
The bank had extended the Eleven's funding till the end of the year, taking into account the Rugby World Cup when the bank and Dr Donald expected an increase in buying interest. "We will have a lot of international visitors coming through," Dr Donald said. "They are looking for genuine progress and review the situation every three months. I will be astonished if there isn't any upward momentum from the World Cup, and I'm confident there will be another extension in funding. When confidence returns, it can turn very quickly."
BOSI has lately called up two big loans on projects in Tauranga - a $20million first mortgage to Poh Trustee for the 21-apartment Vivaldi complex in Marine Parade, Mount, and Grasshopper Farm's $80million, plus $20million in late payments and interest for The Lakes residential development in Pyes Pa west.
Dr Donald said he sold a smaller apartment in the podium (taking up the second and third levels) a fortnight ago and there were two other settlements last month. From Auckland, he is now spending two-thirds of his time at the Mount managing the twin towers complex and running the sales programme.
He said he had reduced some apartment prices by 10 per cent, while others had increased.
Eleven set a record apartment sale in April last year when the 400sq m penthouse in the southern tower was sold to Auckland car magnate Colin Giltrap. His son had an apartment on a lower level.
On the top floor, the family had the use of a home cinema, barbecue on a large deck, and an infinity swimming pool on the rooftop - all 50m above the street.
The penthouse in the northern tower closer to Mauao was still unsold.
Dr Donald is using the luxury living space for promotional purposes, hosting a Christmas function for the present owners and next month a charity auction for Otumoetai College.
The penthouse in the Marine Parade wing has also not been taken up, and the unsold apartments are selling for between $895,000 and $3.45million, apart from the northern tower penthouse. "We are asking people to part with their life savings and they don't do that readily," said Dr Donald. "So we are going through a process of leasing before they buy."