New Zealand's largest private developers, the Auckland-based family-owned real estate specialist Mansons TCLM, has made the year's biggest real estate deal so far by leasing, then selling, a partly-built city office block for more $247 million.
Culum Manson said the business had sold 155 Fanshawe St, new commercial premises on the ex-Caltex service station near the Halsey St corner in the Wynyard Quarter opposite Victoria Park.
The sale to an overseas pension fund came after leasing that building as Kiwibank's new Auckland headquarters and to insurer Southern Cross, he said.
"The sale and leasing was all done via Colliers International," he said.
The building is designed to be six-green star rated and is being built by Manson's own construction workforce.
Work on what will be a seven-level 15,500sq m block in front of the new Datacom House has reached level two and Manson said unlike many other city blocks, the timetable was running three weeks ahead of schedule.
Last year, Manson said the business had a $1 billion-plus of work on or just completed of which 155 Fanshawe St was its biggest job.
"It's the only freehold land in that area," Manson said, referring to surrounding land being owned by Auckland Council and Tramco.
The block was started on-spec, without pre-leasing before construction because unlike other developers, Mansons does not rely on substantial trading bank finance to begin such large jobs.
Steve Jurkovich, Kiwibank chief executive, said it had secured the naming rights and would leave its current national headquarters at 151 Victoria St, on the Hardinge St corner. The bank has leased 2500sq m - all of level three.
Manson said Southern Cross had taken levels one and two and Regus NZ had leased the ground floor for co-working space.
Jurkovich said: "This new building gives us the opportunity to boost our presence and offering in Auckland for both personal and business customers. As New Zealand's largest kiwi-owned bank we have been under-represented in Auckland. This investment in a world-class facility matches our Wellington presence and steps up our Auckland footprint."
The bank would have about a quarter more floorspace than now, he said and the new office was in the right place.
"This will put us near other leading New Zealand companies and in the largest innovation and technology centre in New Zealand," Jurkovich said.
"Kiwibank's new corporate site is about maximising opportunities. The Auckland market is large, the talent pool is rich, and Kiwibank is in a growth phase. We are thinking ahead, and this makes a lot of sense."
The new office came with only 12 car parks but changing facilities, 10 showers and 116 cycle spaces, so Jurkovich said that was in keeping with Auckland's move towards more public transport.
Manson said today the area was "a real kiwi success story, the top corporates in New Zealand all in that one area - Fonterra, Air New Zealand, Datacom and now Kiwibank and Southern Cross. They don't own their own buildings, which is not unusual, because their core business is not real estate and it's a waste of their capital to have it in the property."
"Four of the seven floors are leased. All up, 60 per cent is leased but the top three floors are available. It will be about 18 months to completion," Manson said.
Last year's biggest New Zealand property deal was the sale of seven buildings surrounding the new Kiwibank/Mansons' block: NZX-listed Goodman Property Trust struck a $635m sale of the VXV Viaduct/Wynyard Quarter portfolio to Blackstone and KPMG, Auckland Transport, Microsoft and HP, Datacom and Air New Zealand buildings, Fonterra Centre and Bayleys House were in that deal.
Chris Dibble, Colliers International's research and communications director, said the sale of 155 Fanshawe St was 2019's largest sale.
Last year, around $10b of real estate was sold, he said. Nine of last year's top 10 deals had buyers with strong overseas ties, partly because New Zealand is cheap, Dibble said.
"That $247m is high but we have seen some significant transactions in the past couple of years, so, at this early stage it could be surpassed.
"We are seeing a lot of domestic activity, but offshore activity has been a standout. They are often looking for scale. Putting offshore activity in perspective, in the $50m-plus range of Auckland office asset sales, 85 per cent of the $3.2 billion in deals done in 2017 and 2018 was to offshore purchasers. There are no signs of this interest slowing down, especially given the strong market fundamentals and accommodative interest rate environment," Dibble said.