Barfoot takes on the big boys

By COLIN TAYLOR

Barfoot and Thompson's appointment of Peter Churchill from AMP Henderson to head its corporate transactions signals the "big boys" in the multimillion-dollar corporate property market that the company is taking them on.

Churchill, former manager projects for AMP Henderson Global Investors, has taken up the position with Auckland-based Barfoot after 20 years with various AMP companies, including AMP Asset Management NZ and AMP Investments.

During that time he held several senior property positions: manager retail property, manager of property assets, northern area property manager and southern area property manager.

He was involved with the development of the Botany Town Centre and adjacent retail development the Hub, the Manukau Supa Centa, the extension and refurbishment of Lynnmall and the development and leasing of the PricewaterhouseCoopers Tower. And he managed the AMP Property Fund, which is worth more than $700 million.

Churchill says he moved after two decades with AMP because he needed a change and was attracted by a challenge.

"In the past I've been the purchaser or vendor and the lessee or lessor. Now I'm the middleman, which is a change of emphasis."

He says the commercial property sector of Barfoot and Thompson has grown from a staff of 15 to 40 during the past two years.

He sees his appointment to focus on corporate transactions as building on that momentum.

"There's been a sizeable market share achieved by Barfoot and Thompson in a relatively short time and they've had some pretty significant sales. What I want to do is build on that to gain more of the corporate market."

The "significant sales" have included the Millennium Centre in Greenlane for $42.6 million, the Airpark 1 & 2 blocks of industrial land at Auckland International Airport, which sold for $12 million and $16.5 million respectively; the Papakura Military Camp for $14.2 million, Calans Health Care Centre in Hamilton for $11 million, Landmark House in the Queen St CBD for $9.5 million and the St James Theatre in Queen St for $8.5 million.

Churchill defines the corporate or institutional sector of the commercial property market as transactions of $5 million and upwards. The middle level is from $1 million to $5 million.

"What I hope to bring to the table through my range of contacts is to tell the institutional market that Barfoot and Thompson have done the hard yards. They've created a critical mass and now they have a professional corporate team which can look after them."

Churchill says he also chose the company because it has "an ethical reputation" in the property market.

Barfoot and Thompson's commercial manager, Layne Harwood, says: "Peter's appointment doesn't mean we are going to stop doing the $100,000 commercial property deals in Mt Wellington and Panmure.

"His appointment means that we want to provide a full service in a market we haven't traditionally been in, which is the corporate or institutional market - especially the $10 million-plus market."

While the company is already "participating", it has not strongly marketed itself to the corporate market.

Harwood says that previously the company's commercial and industrial work had been "on a kind of ad hoc basis - although we have been doing it since 1923". Traditionally, commercial property services were an adjunct provided for residential clients. The commercial property division was set up just six years ago and was brought into the head office structure only two years ago.

"The residential and general commercial property we sold in Auckland last year represents 38.5 per cent of the market. Our goal now is to achieve a similar market share in the industrial commercial and corporate markets."

Churchill says the high-end property market has changed dramatically over the past 10 years.

"Players such as National Mutual or AXA are almost non-existent in the commercial property market, AMP Henderson now manage three separate property portfolios and Colonial's portfolio was listed - significantly changing its presence in the market."

A few years ago commercial property was always regarded as a defensive stock when compared with the high-performing international equity markets, but the big institutions were badly burned with the downturn in those markets. Some of them had only 5 per cent of their portfolios in commercial property but many have increased that ratio to 7.5 per cent and more.

The latest development is the emergence of big overseas players.

Most come from Australia where huge retirement funds are available for property investments because of compulsory superannuation.

The cross-border activity between Australia and New Zealand makes investing much easier than in the US or Europe. The Asian market "comes and goes". There was heavy corporate investment 10 years ago but now it is mainly individual investors.

An interesting recent phenomenon is the increasing UK investment - possibly owing to a number of New Zealand investors coming back from Britain at the lower end of the market.

"All these people are coming into the market place and they've all got different needs," Churchill says. And he believes there's adequate capacity in the Auckland market for another major player.