Kiwi chief executive Clive Mackenzie talked about three topicsafter today’s half-year result, which was a significant turnaround for the landlord with $3.3 billion of real estate.
Mackenzie is coy on Ikea’s 34,000sq m store, saying building progress is for that business to talk about.
But he does acknowledge what a huge impact the store’s opening could have, particularly on his company’s Sylvia Park investment, where Kiwi owns New Zealand’s largest shopping centre.
Ikea is due to open later next year on Clemow Dr, across the railway line from the mall.
On the $458m now-ditched Shortland St office tower sale to a Hong Kong China-based conglomerate, Mackenzie said: “Clearly, we were disappointed at the time the transaction didn’t take place. But we’re developing this building. We’ve begun upgrading the lifts, the lobby and end-of-trip facilities.”
He could not put a price on what Kiwi would spend on the building.
Kiwi Property had announced that an unnamed Hong Kong-Chinese buyer was on the hook for the Vero Centre, subject to Overseas Investment Office approval. Photo / Michael Craig
Milford Asset Management has left two floors of the Vero Centre for the top floor of the new 12-level 50 Albert St.
In May, Kiwi suddenly announced that deal but weeks went by and that never progressed till August, when Mackenzie said Kiwi had terminated the contract for the conditional sale.
The purchaser failed to meet key terms of the agreement.
Auckland's Vero Centre. Photo / David White
The company had “worked hard over a number of months to successfully complete the transaction and was disappointed by the outcome. Despite our best efforts, the purchaser has now missed the deadline for milestones such as paying the deposit and seeking Overseas Investment Office approval for the deal and, as a result, we’ve made the difficult decision to terminate the conditional sale contract”, Mackenzie said.
Today, Mackenzie reiterated how important Vero was to Kiwi, which has its HQ there.
“We developed this building so have a very strong link to it. Now, we’ve moved on,” he said of talk of the non-sale.
Ikea, opening late 2025
Back in August: a drone aerial view of the new Ikea store at Mt Wellington. Photo / Jason Dorday
On progress at Mt Wellington’s under-construction Ikea, which will be New Zealand’s first store for this brand, Mackenzie said that was not for him to comment on, but for Ikea.
But the global chain’s arrival in this part of the world was a milestone, he indicated.
Its development was part of Kiwi’s strategy in planning the Sylvia Park community under the live/work/play banner.
“They’re a really strong, powerful retailer. It adds strength to the precinct,” Mackenzie said.
Kiwi Property Group CEO Clive Mackenzie speaks at the opening ceremony of the Resido apartment complex in Mt Wellington. Photo / Jason Oxenham
Ikea has bought the 3.2ha site where Naylor Love is building the new store. Naylor Love also built Resido and other offices at Sylvia Park.
Mirja Viinanen, Ikea Australia and New Zealand chief executive and chief sustainability officer, said in a statement in April that the business was “investing a projected $407m to establish and commence business in New Zealand. The projected $407m is made up of the cost of the physical Ikea store land acquisition, site development, construction and fit-out. The figure includes the cost of creating the digital capabilities required to offer a seamless online shopping experience to New Zealanders. Also included are costs to set up a local supply chain with customs, freight, transport and warehousing”.
The eye-catching common area outside the three-tower Resido apartments, which was opened in June by Prime Minister Christopher Luxon. Photo / Jason Oxenham
Pet-owning Resido renters
On the new $200m Resido apartments next door to Sylvia Park at Mt Wellington, Kiwi said today the renters’ average age was 34, residents earned above Auckland’s average income and 31% of them have pets.
Cats or dogs? Mackenzie couldn’t say.
But he’s happy with half the complex now being full after June’s opening by Prime Minister Christopher Luxon.
“It’s getting a lot of interest and the importance of pets in people’s lives and we’re happy to welcome pets into our community. We’re not seeing any issues as a result of that strategy. People love it,” Mackenzie said.
On his view of half the 295 units being rented, Mackenzie harked back to Kiwi’s initial statements that it expected full occupancy to take a year to 18 months.
“That is a lot of apartments,” he said of the 295, “and it’s a soft residential market at the moment.”
But he is clear that Kiwi won’t go it alone next time when doing build-to-rent. It will seek a capital partner to enter a joint venture to help fund construction at LynnMall.
“It’s very capital-intensive so we will need a capital partner to sit alongside us,” Mackenzie said.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
