Fletcher’s closure of its $15 million factory draws comment, granny flat liberalisation is debated, the beauty of glass, the now-empty ex-Beca building for sale and five Auckland Woolworths supermarkets sold or selling: all covered in today’s Property Insider column.
People in the sector have reacted to Fletcher Building’s plans to shut its Clever Core prefab house-building plant at Wiri.
Shane Brealey of Simplicity Living said off-site house manufacturing would always struggle to be financially viable in New Zealand and he backs building on-site.
When the bad weather hit Auckland last week, Brealey showed how work was continuing in Mt Wellington, building 297 new build to rent homes at Te Reiputa.
“Modern methods of construction to us means building using a system that is more cost effective, faster to build and resilient during and post completion of construction. Today we were down about 20% on productivity as the leading structural works were not comfortable or safe to work on.
“High winds shut down use of our tower cranes. However, we had 80% still going flat out with a Stackcell wall concrete pour, on-site-manufacturing facility spitting out prefabricated modules, fit-out works in full flight inside a dry space protected by the sequence of walls/windows/slabs devised to deal with just this situation,” Brealey said.
“OnSM [on-site manufacturing]... rocks,” wrote Brealey, with Simplicity Living building hundreds of new Auckland build to rent apartments.
Andrew Crosby of Xpect Property Development said Fletcher had “at least given it a good nudge” via Clever Core.
But so-called modern methods of construction were not that modern, Crosby said.
“It’s not the industry’s fault that companies don’t adapt. It simply is too hard to make this stuff more cost-effective than not building in an expensive shed and carting to site,” he said.
Others lauded Fletcher for having a go, saying the company should be commended.
The factory only opened in 2019 but Fletcher admitted plans hadn’t worked out as expected.
“Despite the many benefits, the volumes required to be commercially viable have not materialised, due in part to the challenging market downturn and a reluctance within the New Zealand housing industry to adopt off-site manufacturing at scale,” a spokeswoman said.
A PlaceMakers frame and truss plant would open there next year, she said.
Clever Core staff are being consulted on their roles. The spokeswoman said the aim was to redeploy as many people as possible into other positions throughout the Fletcher Building business.
The business had originally planned for its frame and truss plant to be in the former Winstone Wallboards site in Onehunga.
“Relocating to Wiri allows us to fast-track delivery of the new frame and truss plant by about a year, reduce capital expenditure, and make the Felix St site available for potential sale,” the spokeswoman said.
Fears are held for special character neighbourhoods due to the granny flat liberalisation announced on the weekend.
“The Government has just created a massive cluster f**k. There are no amenity controls in their new law. Outcome is trailer park-style living and granny flats located in front of character dwellings. This is just dumb!” said one planner.
Building and Construction Minister Chris Penk said when asked about this: “Yet to be determined. There will be consultation on this mid-year.”
Others in the sector backed the changes, saying cities would benefit.
Larger granny flats will be able to be built without consents after the Government decided to change its coalition promises after public consultation.
Saturday’s announcement from Penk said the Government had confirmed it would change its planned amendments to building and resource consent legislation to allow minor residential units to be built up to 70sq m, more than the originally mooted 60sq m.
The policy, agreed between National and New Zealand First, was aimed at addressing barriers to building simple dwellings, often preferred by people who lived with older family members or children who wanted their own living space.
The decision to increase by 10sq m came after consultation led by the Ministry of Business, Innovation and Employment, reinforced by Government officials, Penk announced.
Glass panels are making statements on new buildings around Auckland, whether it be on the side of the NZ International Convention Centre in the CBD or a much-awarded building opened in 2022 on a Point Chevalier marae, Te Taumata o Kupe Nuku.
In both cases, the glass panels were imported from Asia.
A glass sector executive said this country makes no glass and all the supply is imported but New Zealand toughens it, cuts it, laminates and strengthens it for purpose.
Big decorative patterns such as on the NZICC could be digitally printed in New Zealand and then baked onto the glass but that process could also be done overseas too, he said.
Price is one of the reasons why Asian printed glass is being used.
Artist Sara Hughes used glass from Singapore for SkyCity Entertainment Group’s NZICC. She has created the sky forest artwork on the building’s exterior.
Those 550 panels, each 9m high, had to be remade and re-installed after the 2019 fire.
Locally owned glass specialist Thermosash of Henderson worked with Hughes on that project.
The bespoke multi-coloured patterned cladding on the front and back of the prize-winning Pt Chevalier building at Te Mahurehure Marae was made in China.
“If you get the glass and a panel is broken or a millimetre out, what do you do?” one person involved in glass panels said.
He encouraged developers to buy locally, not just for quality for also to support businesses, jobs and innovation.
In one case, a business that ordered coloured glass panels said it had saved more than 60% by getting the coloured glass from overseas.
However, the business also admitted it was an extremely difficult process negotiating with an Asian manufacturer, particularly when it came to colour.
Its anchor tenant has left, it is fully vacant and now this substantial commercial office building is for sale.
The ex-Auckland Regional Council, ex-Vodafone building was more recently the world headquarters for Beca.
Colliers and CBRE have been jointly appointed, advertising 21 Pitt St with a net lettable area of 16,635sq m on a 6430sq m site.
Could it have residential uses? The agents cite abandoning it as an office block and mention the build to rent market, student accommodation, a hotel, medical, education or co-living.
The deadline for the private treaty sale is April 30, unless it sells before.
In 2022, the Herald reported the building as being owned by Viewmont Orchards, controlled by Fendalton-based Miles and Peggy Middleton.
Christchurch landlord and earthquake-hit investor Miles Middleton paid $55 million for it.
He took insurance proceeds from Christchurch buildings and poured them into the high-profile commercial investment, a 2012 article said.
His Christchurch high-rises included the Westpac and DTZ buildings in the City Mall, which were demolished. He indicated last decade he was considering investing insurance proceeds in either Auckland or Australia.
Auckland Council lists 21 Pitt St as having a $75m valuation: $37m in land and $38m for the building.
Woolworths Te Atatū, Woolworths Westgate and Woolworths Mt Roskill have all sold recently: the first is to become a New World, the last two are to continue as existing operations but with new owners. Two of those stores went for $45m collectively.
Last week, Blair Peterken of Colliers added a fourth to that list, saying Woolworths St Johns had been sold for $22.9m.
So that’s at least $70m of sales.
“This is the fourth Woolworths supermarket to sell in Auckland in the past six weeks, illustrating that well-located commercial properties with long-term leases to secure tenants are attracting investors,” Peterken said.
That property is at 134-140 and 144 Felton Matthew Ave.
A fifth Auckland Woolworths is now in play. Peterken is advertising Woolworths Lincoln Rd. It has 10 years on its lease to General Distributors and generates $1.5m in annual rent, he says.
Is there any connection between these five sales?
Asked about the sales, Peterken said he alone sold Woolworths St Johns. He and Peter Herdson sold Woolworths Westgate.
What’s his secret? “No secret: Just staying close to the vendors and buyers, understand what the market wants.”
With interest rates falling, private investors were looking for new opportunities and such properties were seen as ideal, he indicated.
“Demand is still there and there will be more of these this year,” Peterken said.
Richard Kirke of Colliers says the five stores have no specific common factors. There are different vendors and different buyers.
But he says it sure is a sign of confidence in the sector and he acknowledged Peterken’s success.
“It looks like a flurry, but over the last two years, it was a lack of sales that was probably more of a story,” Kirke explained.
Anne Gibson has been the Herald’s property editor for 25 years, written books and covered property extensively here and overseas.
Serko shares tumbled nearly 8% after the firm disclosed an impairment.