Property Insider: $150m Victoria Lane developer Richard Kroon’s success; Indigo Hotel to open in August; when will Kiwi start New Lynn build-to-rent?

Kroon on Victoria Ave, Remuera when his project was advancing. CMP Construction built Victoria Lane which has now been completed. Photo / Jason Oxenham

When it comes to construction, bigger is “uglier and harder”, according to luxury apartment developer Richard Kroon. So how has he set the ambitious Victoria Lane project on a path to success? Meanwhile, a sleek and tall addition to Auckland’s skyline is nearing completion and we get the latest on Kiwi Property Group’s build-to-rent homes.

Completion has been achieved of Victoria Lane, one of Remuera’s most luxurious new apartment buildings, clad in stone and aluminium, and now developer Richard Kroon has reflected on that $150 million project in the village heart.

He hit the market at the right time, selling high-end apartments before the recession really took hold.

This is a big project and places came with matching price tags: apartments were marketed from $3m to $18m each for the five-level 23-unit block with 52 basement car parks running the full length underground.

Richard Kroon on Victoria Ave, Remuera last February when his project was advancing. CMP Construction built Victoria Lane, which has now been completed. Photo / Jason Oxenham

“Bigger is uglier and harder, not better when it comes to construction. Small is great, easy,” said the experienced developer, now in his early 70s.

Victoria Lane was one of the few projects where the presence of a tower crane by builder CMP Construction sparked a High Court ruling, issued in August 2021 by Justice Edwin Wylie.

Being in such a built-up area, the boom of the giant crane had to swing over 31 people’s and entities’ properties, directly under the slew path of the main boom, so Kroon approached everyone seeking consent. Some agreed, but others were opposed or were silent.

So Victoria Lane sought a court order authorising it to enter and re-enter the neighbouring properties’ airspace with CMP’s crane to build the apartments.

Neighbours Harry and Christine White and Anthony Sandlant of 6 Victoria Ave were opposed, saying half their house lay under the crane’s path. The neighbours wanted a $1m bond from Kroon’s company.

Evidence was presented that the site was 100m long. If the crane was placed in the centre, it had to be capable of lifting 5.6 tonnes at a distance of 50m from the tower. The requirement dictated the size of crane that is necessary, the court heard.

Andrew Moore, CMP Construction commercial manager, gave evidence supporting the need for such a large crane on the Victoria Lane site. Photo / Jason Oxenham

In evidence, Andrew Moore of CMP said that mobile or crawler cranes couldn’t be used because of the site. A mobile crane wouldn’t have been able to lift the weights needed.

The judge ruled in August 2021 that “the terms of any order and the conditions for the proposed entry into air space require further thought and perhaps evidence”.

But a decision the next month said the parties had indeed reached an agreement.

So the crane went up and Victoria Lane rose and has been a big success for Kroon.

Its name came from being on Victoria Ave but backing on to a narrow paved walkway or lane leading from the building directly to Remuera Rd via that laneway. The building is nicely positioned to capture the sun on the ridge, facing north.

The building's reception, as envisaged at Victoria Lane. Photo / Jason Oxenham

A porte-cochere with a grand 7m internal height connects two parts of the building and reception and dual lobbies lead off that.

Minimalist details like cream stone cladding create a strong visual statement. The block is near the corner of Remuera Rd and Victoria Ave, one commercial/retail building back from the main street. The design is by Leuschke Group Architects and the interiors are by James Doole.

Around 40 per cent of the building is already occupied, Kroon said last Thursday. Some buyers are yet to return from overseas.

The new Victoria Lane apartments, facing a laneway which leads to Remuera Rd.

So what has he learned of developing 4 and 4A Victoria Ave and how does he see the market?

He notes big change, including at that top end: “You’ll do well if you have built stock. You won’t do well if you are trying to float an apartment.”

Asked about prices achieved, Kroon said some buyers did their own internal fit-outs so the amounts paid reflected that.

His project has been highly successful in terms of sales, with only two of the 23 apartments unsold: a 100sq m unit for $3.8m and a 260sq m northwest facing place for $8.85m.

On those two last sales, he notes some air of caution: “Some people are looking but you can tell how much the market has changed. People are very nervous about selling their own homes even at the higher end of the market. You are just not getting a lot of confidence.”

A lower level of debt than many other projects carry was another key to success, Kroon said.

“If you get caught, sometimes the problems are complex so you have to have a higher equity ratio. You can’t afford to do something like this like a house where you have 70 per cent debt. My debt was not that high. All funding facilities are fulfilled,” he said.

Victoria Lane got funding for construction from First Mortgage Custodians.

So, will Kroon do it again? He does have another project in mind, he admits, also understood to be in Remuera, but he isn’t giving any details away, including the location.

$250m Indigo Hotel and Residences nears completion

The new Indigo Hotel and Residences at 51 Albert St, Auckland CBD, pictured some months ago. Completion is now close. Photo / Alyse Wright

Icon is nearing completion of Auckland’s new 41-level $250 million Indigo Hotel and Residences at 51 Albert St, a tower which also backs on to St Patrick’s Square.

Dean Rzechta, managing director of Melbourne-headquartered 94 Feet, which developed and owns the building, said he would visit early next month.

“Icon is rapidly approaching the code compliance stage. That is expected to be achieved in late June and we’re looking forward to the opening of the hotel shortly afterward,” Rzechta said.

Hotel rooms and apartments, including a penthouse, are now completed although the foyer, reception and restaurant are around two months behind, he said.

Rzechta expects the opening to be around August, depending on the building programme’s finalisation.

The tower rose on the site of the heritage Macdonald Halligan Motors building near the Wyndham St intersection, opposite Manson TCLM’s $650 million 50 Albert development, where Spark and Milford Asset Management are moving once that’s finished.

51 Albert is a hotel/apartment scheme: a 225-room Hotel Indigo and 30 upper-level or “sky” apartments in the tower, funded by Australian private lender Merricks Capital.

New Lynn build-to-rent

This interior image of a new Resido apartment was released today. Photo / Kiwi Property Group

Expectations are high that Kiwi Property Group will start planning another build-to-rent project in New Lynn, following success in completing and opening its first scheme beside Sylvia Park in Mt Wellington.

Simplicity Livings’ Sam Stubbs said the only three scale builders of build-to-rent (BTR) were Kiwi, New Ground and his business.

“Why only three? Because construction costs make it devilishly hard to build to rent, so I’m left asking – why do retirement housing and student accommodation builders pay no GST, but long-term build-to-rent developers have to?

“Seems a bit bonkers to me when New Zealand needs many more homes. My prediction? GST relief would open the floodgates of KiwiSaver money into BTR, and we need some competitors!”

Shane Brealey of Simplicity Living said Australia only had around 5000 BTR units, although another 5000 were under construction.

New Zealand only had around 1300 BTR units.

“Why is Kiwi Property not flying into New Lynn and the next BTR project?” Brealey asked.

A Kiwi spokesman confirmed on Friday that the company’s plans to build new rental apartments in New Lynn were indeed concrete.

“We have resource consent for our mixed-use tower at LynnMall. Our initial focus is successfully launching Resido and proving up the concept, after which we’ll look at new opportunities,” he said.

Anne Gibson has been the Herald’s property editor for 24 years, has written books and covered property extensively here and overseas.