KEY POINTS:
Leasehold land parcels are dotted all over Auckland and, indeed, New Zealand. More leasehold titles are being created out of freehold land in a move some regard as permanently disempowering property owners and removing their rights to own the land on which their houses stand. Others regard the
move as creating a never-ending revenue stream.
Albany
Rick Martin's Cornerstone Group converted 44ha of land from freehold into leasehold title after he bought it from Neil International. Then, he leased the block to Symphony Group which has in turn sub-leased large parcels to other entities including financiers St Laurence, Progressive, ING and Australians Valad.
Princes Wharf
The 299 residential and serviced apartments are leasehold in tenure and are the subject of a 50-year terminating lease except for certain apartments in Shed 24 which have lease terms up to 96 years. Each apartment owner pays a ground rental. Kitchener Investments bought the leasehold interest but has since sold its interests to other parties. The lease is to Ports of Auckland until 2095.
Quay Park
Waterfront area around Vector Arena and the former Railway Station. Land owned by Ngati Whatua O Orakei Maori Trust Board and leased for 150 years on a terminating basis to many developers, investors, retailers and apartment owners. The high-rise Scene One, Two and Three apartment blocks and the Foodtown supermarket are on these terms.
Parnell
Ngati Whatua leases. Much of The Strand is due for a rent review around 2011 when a battle is expected.
Queen Street
David Henderson's Kitchener Group developed apartments on leasehold land. Now, apartment owners pay to rent the land their buildings stand on. Kitchener bought the leasehold interest in land in 2001 from Regina Properties, associated with Mainzeal, which bought it from the Methodist Church in the 1980s.
Viaduct
Basin Prime CBD waterfront strip owned by Viaduct Harbour Holdings which bought 18ha from Ports of Auckland for $73 million in the late 1990s.
Newmarket
Large strips alongside the railway line owned by Tramco, closely associated with Viaduct Harbour Holdings. Wide variety of commercial, residential and retail uses.
Suburban areas:
Various churches and organisations own parts of Kohimarama, St Johns and Mission Bay.
One Tree Hill
Housing land around Cornwall Park owned by Cornwall Park Trust Board, perpetual leases. In 2005, proposed rent increases of up to 750 per cent left some residents distraught and others suffering mortgagee sales. The board reviewed ground rents on 27 of its 119 properties around the Campbell Rd and Maungakiekie Ave area which backs on to the park.
Britomart
Land owned by Auckland City Council, leased to heritage developer Bluewater which pre-paid the ground lease for 75 years from the first review in 2011. The ground lease expires in 2154, one day earlier than the head lease over the whole precinct, a factor which, in other leasehold developments around central Auckland, is said to have not been given much weight in pricing.
Elsewhere
Large parts of New Zealand are in leasehold tenure, particularly South Island high country along the eastern spine of the Southern Alps from Marlborough to Blenheim. Port areas of Auckland, Wellington, Lyttelton and Otago and provincial areas in Taranaki, Tauranga, Whangarei, Nelson and Wanganui are leasehold.
PROPERTY GLOSSARY
Lessor: Party who owns the land.
Lessee:Party who leases the land.
Leasehold land: Land owned by the lessor, rented to the lessee.
Freehold land: Land owned by the same party who owns the improvements (buildings).
Ground rental: The amount of money the lessee pays the lessor for occupation.
Perpetual lease: Term of tenure infinitely renewable, for example Albany.
Terminating lease: Lease term expires at a set point, for example Princes Wharf in 2095.
Rent review: Time when the lessor reviews the amount charged for leasing land.
Glasgow lease: Perpetual leases on a 21-year rent review, for example houses around One Tree Hill.
Ratchet clause: Allows the ground rent to remain static or increase but never decline.
