New Zealand’s biggest property sale so far this year is an Auckland transaction for $275 million, although a separate $160m sale was revealed yesterday.
Those two deals brokered sales of $435m in what is seen to be a fairly flat real estate market.
But life is not quiet at the larger industrial real estate end of town, where transactions were both in the South Auckland region.
Zoltan Moricz, research head and executive director at CBRE in Auckland, said today the $275m sale was particularly significant.
“By our records, the largest transaction that concluded this year was Fisher & Paykel Healthcare’s purchase of 105ha of land in Karaka for their future campus. This was transacted by CBRE’s Bruce Catley with Paddy Callesen of Savills,” Moricz said today.
Colliers’ industrial sales and leasing national director, Greg Goldfinch, yesterday announced that second $160m sale. That is an unconditional deal of stage one of the Cardinal Logistics building at Drury Crossing, although he told the Herald it was a little historic: “The deal was struck quite some time ago in 2021, but only settled two weeks back on completion of the building. So it will register as a 2023 sale, yes, but in reality, it was agreed way back.”
On the $275m sale, the Overseas Investment Office clearance decision was made on April 23 and involved the Finance and Land Information Ministers. Properties sold were 300-328, 350, 370 and 458 Karaka Rd.
Karaka Meadows was the vendor on the $275m deal, the OIO said.
A title search showed one of the properties was previously owned by Van Den Brink Meadows. Part was previously owned by Karaka Road Estate whose directors include tomato supplier Brett Wharfe of NZ Hothouse.
Companies Office records show Karaka Meadows was incorporated in 2021 and has registered offices at a Nelson law firm Royds Legal. Lawyer Chris Royds is its sole director. Ultimate ownership is disguised because shares are owned by OTQ Trustees, also of Nelson, which traces back to the same law firm and the same lawyer.
Asked who the ultimate owner of that land sold for $275m is, Royds said: “That’s confidential to my client. They won’t want to talk about it.” NZ laws don’t demand ultimate ownership be declared.
CBRE’s Bruce Catley said of his involvement in the Karaka land deal: “This was a once-in-a-generation transaction for Fisher & Paykel Healthcare, achieved through long-term trusting relationships, resources and collaboration internally which helped provide our client confidence they could acquire the land they wanted.”
The brief stemmed from continued growth that meant the company’s existing East Tamaki site would be full by 2025, meaning a second campus was necessary.
The process began in 2020, with a considered, meticulous and expansive search for the right location options that would shape the next 30-plus years of development, Catley said.
The mandate was to find a large piece of land initially, 40ha to 50ha within Auckland, “so we knew the options were going to be limited”.
The location needed to offer the space for future growth, but as Fisher & Paykel Healthcare is one of the largest employees of graduate engineers, it also needed to attract and retain current and future employees, Catley said.
CBRE Research helped with the search using third-party datasets and GIS systems to form a shortlist, which was then narrowed to three viable options in South Auckland.
As work engaging vendors and agents began, the options were presented to the Fisher & Paykel Healthcare board, which approved the undertaking of a full due diligence process on several sites, Catley said.
A planning expert from Barker and Associates was introduced to deliver confidence and expertise around the prospects of re-zoning the identified sites from urban to industrial.
During this process, the preferred location was identified but was ultimately unavailable at the time, shifting the focus to two alternatives, Catley said.
But the original site became available again and a decision was made to not only engage with the party that controlled a portion of that, but also investigate amalgamating more land to create a 105ha landholding.
Due to the size of the land, zoning and classification of the owner, more work needed to be undertaken to meet Overseas Investment Office requirements, he said.
The 105ha of future urban land was put to market through Bayley’s, with Fisher & Paykel Healthcare required to bid. When tenders closed, its offer was accepted.
Development of the new campus will be during a 20-to-30-year period, with a focus on earthworks and core infrastructure over the next five years.
The site is 25 kilometres south of the company’s existing campus and approximately 40km south of Auckland’s CBD, Catley said.
It is also next to a major rail line and a short distance from State Highway 1. A new train station is being built at Drury. The new campus will bring up to 16,000 workers into the area.
Catley said secrecy surrounded the deal: “The level of confidentiality was high as we worked to amalgamate the sites together ready for purchase. If it hadn’t been for relationships and our collective experience, we may not have found them the right site. For us, it was two years of high-risk work, but this was a better outcome for Fisher & Paykel Healthcare than even we anticipated.”
Since buying the land, the company has raised alarm about its ability to build, saying Auckland Council’s proposed planning strategy doesn’t accommodate its innovation park, which could create thousands of jobs.
Fisher & Paykel Healthcare supply chain, facilities and sustainability vice-president Jonti Rhodes made a strongly worded written submission on the proposal to limit new development to brownfields or only previously developed sites.
That’s called the future development strategy, but the corporation’s Karaka site is a greenfield - the very type of holding where the council proposes to restrict development.
“Fisher & Paykel Healthcare’s Karaka campus is a major development opportunity, and it will provide national and regional economic, social and environmental benefits. The future development strategy has significant implications for our plans for our growth in New Zealand,” Rhodes’ presentation to the council said. The Herald reported that on August 4.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.