Chinese backers fuel plans for Karaka Centre

By Bob Dey
Property Editor

Resource consent will be sought in a few weeks for a $200 million-plus centre at Karaka, on the southern outskirts of the Auckland metropolitan area.

Next to New Zealand Bloodstock's Karaka sales centre on the western side of the southern motorway, the mixed commercial and cultural development will be a privately financed project led by Auckland-based consultant Roy Mottram.

Construction is intended to be completed 18 months from the start of the project, which depends on the speed of the consent process.

Mottram has organised a range of major projects around the country, mostly bringing in Asian finance, and his latest scheme is a continuation of that.

His company for this venture, Right Point Investments, will use finance from one major Chinese backer and a number of smaller Chinese investors.

The staged project is to have about 45,000 sq m of retail space in a series of buildings at the centre of the 56ha site, with a cultural centre on the Manukau Harbour side and a business centre on the northern corner next to the bloodstock centre.

Mottram says a 200-bed hotel would take the total project cost to $250 million. There would also be an extensive entertainment area, including a muliplex cinema and interactive entertainment space.

The site was earlier considered by ProMall, a group which has been trying for several years to put together a chain of huge out-of-town retail centres. Mottram says the Right Point proposal, now on the outskirts, has one of Auckland's high-intensity development neighbourhoods around it, on the Hingaia Peninsula.

That area, in the Papakura district, has been signalled as the future home of 25,000 people in the regional growth forum's strategic outlook.

It is also not so far from "town" - 25 minutes down the motorway from the Auckland CBD and 20 minutes from the international airport.

Unlike most urban malls, which are purely retail-based, there is a move toward provision of wider community facilities in some of the new regional centre plans.

Mottram says the Karaka Centre will be "green-screened," with a park around the perimeter, and the aim will be quality.

"We're looking at an emphasis on entertainment as well as shopping. The city doesn't have concentrated shopping or entertainment after hours, which Asian tourists are used to. It will be a destination," Mottram says.

The Karaka Centre design is by Peter Zillman of the Buchan Group, which has become a leading designer of large retail centres in Australia and New Zealand.

Mottram is not disclosing who has been lined up as tenants, but says they will include some major American and Australian retailers not yet seen in New Zealand, and one or two operators of large department stores.

"There are three majors who want to be there. Two offered to put money into it to reserve their space," Mottram says.

The office component is small, perhaps two buildings, but Mottram says small South Auckland manufacturers have expressed interest in getting head office space near the motorway.

Mottram, a former Bay of Plenty dairy farmer who was on the Bay Milk Products board, got into packaging projects with overseas finance 10 years ago.

His first, in 1989, brought Hong Kong ownership of Salvation Army property near Putaruru and he followed that with several dairy farm and forestry transactions involving Singaporeans, Taiwanese and Hong Kong investors.

All have been greenfields projects. "Capital has been brought here and something significant has happened as a result," Mottram says.

Many of these ventures have brought foreign capital to small centres such as Oamaru and Gisborne.

The sources of finance change from year to year. "In 1995 we had quite a run from the US. Our main emphasis now is from Asia, but the US is rising again because of the America's Cup and the Sydney Olympics."