Millions sought for Auckland rental housing

This housing project by Clarke Group is in Manukau's Plunket Ave and consists of 36 fully-furnished units on four fee simple titles.

Money sought to develop new Henderson rental homes

A housing business wants $20 million from the public as a contribution towards funds to develop up to 500 Auckland units, initially in Henderson.

Dene Biddlecombe, chairman of Stanford Residences, said the money would be used to fund development of units where tenants would share kitchen, lounge and laundry facilities but get a bedroom with full-sized TV and tea and coffee-making facilities.

Biddlecombe said offer documents projected a 9 per cent return. Minimum deposits are $10,000.

Large multi-unit buildings or residential centre complexes could have up to nine individual units, rented out for around $330 per week, he said.

Each unit has an en suite bathroom and the rent includes overheads such as electricity and water. Stanford has an option to buy land at 14-20 Swanson Rd, Henderson, and has a draft scheme to build 100 studios on that site, he said.

Stanford is working with studio housing developer Clarke Group Management Ltd which specialises in building studio units.

Andrew King, NZ Property Investors Federation executive officer, said he was reluctant to comment on any specific business but Stanford's scheme sounded like large boarding houses.

"I'm not quite sure boarding houses are the right answer to Auckland's housing situation because they're basically not for long-term tenancies. The majority of tenants would not want to live that way. We like our own space," King said.

Biddlecombe rejected the boarding house comparison.

"We would like to think it's more upmarket than a boarding house because we have en suites and security," he said.

David Whitburn, a former lawyer turned property investor and developer, thought the concept could be popular.

"We build four- and five-bedroom houses but the demand is for studios. So it's a good idea. It's the area of highest demand. One- and two-bedroom rentals are most popular," Whitburn said.

But he would not invest in the $20m capital raising.

"This investment will probably best suit a person with a lot of spare money, so they can take a sizeable increase in risk [compared] to fully imputed dividend yields offered by listed property trusts or commercial property syndicates," Whitburn said.

Whitburn had diversified into NZX-listed companies and believed the often fully-imputed dividend yields they provided could give a good return, "for example Kiwi Property, Goodman Property Trust, Vital Healthcare, Property for Industry, Precinct, Stride, and the retirement village operators like Ryman and Metlifecare which are essentially property companies".

"These work well for investors not willing or able to do direct residential or commercial property investment."

Whitburn noted that Austen Clarke, managing director of Clarke Group and a Stanford director, had been bankrupted.

Stanford's product disclosure statement said: "Austen was adjudicated bankrupt on March 15, 2010. The bankruptcy resulted from a failed apartment development in Hamilton which was undertaken by Regency House Limited."

It noted that was around 2007 at the time of the global financial crisis.

A spokesman for the Financial Markets Authority said of Stanford's $20m capital raising: "This is a regulated equity offer under the Financial Markets Conduct Act. The issuer approached us with their product disclosure statement. We have provided feedback to the extent that the offer document needed to meet the minimum legal standards before being lodged on the disclose register and going live."