Sale of quake hit apartments reflects trend

A Christchurch inner city block of earthquake damaged unit titled apartments is being sold by auction on August 27 'as is where is.'

This reflects a growing trend among body corporates, according to Courtney Doig and Paul Vining of Colliers International.

The 34 apartments span 224-242 Salisbury St, with dual access from Peterborough St and have been temporarily strengthened so that 33 of the three bedroom units can remain occupied.

"This development is strategically positioned within walking distance to the thriving Victoria St precinct and the heart of Christchurch's newly forming CBD. The complex is situated diagonally opposite Briscoes and a site earmarked for supermarket use," Doig says.

"It offers significant holding income which will enable sufficient time to plan and develop surplus land."

In the past 18 months, Colliers has transacted more than $25 million in sales of unit title apartment blocks in Christchurch. They all have a common theme - no shortage of interest. Cranmer Court is the best known, followed by 14 apartments in Rhodes St, a three level apartment block at 36 Park Tce, and a 42 unit development in Bealey Ave.

Vining said the predicament of the Salisbury St body corporate is similar to many body corporates which have seen their buildings suffer extensive earthquake damage.

"We're finding that many body corporates are battle weary from prolonged insurance negotiations, and are increasingly considering selling their damaged apartment blocks once settlement comes through. The prospect of extensive repairs can be daunting, making an 'as is where is' sale an often attractive solution."

He says there is high demand for the properties with developers are often buying for the land with all the above properties being in premium locations. "Or they see value in repairing remaining buildings."

Doig says there are a myriad of issues for unit owners to work through so that they have a clear consensus, which enables the sales process runs smoothly.

"For instance, all owners need to agree and commit to the process; unit owners have to weigh up the best financial outcome for all parties; and the timing of repair and vacancy costs should be compared against a potential immediate result.

"That decision making process is crucial to ensure a harmonious way forward. We usually recommend that the unit owners form a company from which someone is legally appointed to represent all unit owners of the body corporate," Doig says.

"Apportionment of funds must be agreed before starting the marketing campaign so that everyone is on the same page along with full disclosure of all due diligence documentation. Everything must be readily available to all potential buyers."