TelferYoung (Auckland) Limited
Current | 2010 | 2009 | 2008 | 2007 | 2006 | 2004
Auckland Newsletter - February 2006
1 February 2006
Welcome to the TelferYoung (Auckland) Limited February 2006 Newsletter.
PINZ Life Membership Award - Evan Gamby
 Presentation Ceremony |
Special congratulations go to TelferYoung (Auckland) Director, Evan Gamby who was recently awarded Life Memberships of both the New Zealand Institute of Valuers and the Property Institute of New Zealand at a special function attended by Auckland Branch members and notary guests. Life Membership awards are made to members who have rendered pre-eminent service over a long period. Awards of one or both institutes have only ever been awarded to 37 members, and TelferYoung and companies it preceded now have the distinction of five of its valuers having received this honour.
Evan has been very active in the affairs of the Property Institute and New Zealand Institute of Valuers (NZIV) over many years.
Evan began his career 40 years ago and is a highly respected member of the valuation profession. He is a founding director and chairman of TelferYoung (Auckland) Ltd. He is deputy chairman of the Valuers Registration Board of New Zealand, having been a nominee member for 14 years. He is a foundation Fellow of PINZ and has been a chairman of the National Education Committee. Evan obtained a Master of Property Studies (Distinction) from Lincoln University in 1999.
 Evan & family |
Currently, Evan is also a Professor lecturing in the Department of Finance, Banking and Property at Massey University's Albany Campus.
The directors and staff of TelferYoung (Auckland) Ltd wish to congratulate Evan on achieving this honourable award.
Business Zoned Land - When Demand Exceeds Supply
The last few years have seen almost unprecedented growth in prices for Business zoned development land throughout the Auckland metropolitan area. Over that period an expansive general economy and a continuing "drift" of domestic population, commerce and business activities to the Auckland region have driven demand for new premises and sustained significant rental growth at a time when investment yields have firmed significantly. These conditions have stimulated substantial new investment in all commercial and industrial categories and strong capital value growth has in turn translated into strong land value growth.
Over the same period the continuing encroachment into Business zones by high density housing and mixed use development in fringe central City and suburban centres has put further pressure on an already limited suburban commercial land supply.
We have observed several interesting trends and occurrences in the market for development land:
- Growth in land prices in the order of up to two and a half times the levels prevailing in 2001/2002, and in some instances greater.
- Owner-occupiers outbidding developers and investors to acquire land for industrial development. This has further fed price growth and in some cases has been partly motivated by property investment motives rather than solely business operational reasons.
- On a number of recent occasions developers (and owner-occupier purchasers) have opted to on-sell land rather than develop. This is most unusual amongst developers to whom land is the "critical resource". Capital gains have been attractive enough to justify not entering into development and its attendant risks. Tighter development profit margins have been a factor as construction and consent costs have risen faster than rental growth.
- Industrial land previously attracting little or no demand due to inferior location and/or physical problems (fill, contour etc.) has now successfully found a market at enhanced prices.
- High land prices in older industrial locations and preferred "greenfields" locations are forcing developers to promote more commercial type activities eg. offices, bulk retail, mixed-use and small business units, to generate higher rentals to justify the land price.
- Future supply of industrial land is looming as a critical issue to the future economic development of the Auckland region. Local authorities are coming under increasing pressure to rezone peripheral land for business development to redress a potential undersupply.
And the outlook for the land prices... there are signs that the strong recent price escalation has now stabilised in many areas. This trend could be reinforced if the anticipated economic slowdown eventuates. High constructions costs and market resistance to further rental growth are limiting further price growth.
Building Act 2004 - Earthquake Strengthening Compliance
Under the requirements of S131 of the revised Act all territorial authorities (TA's) must have in place, by 31 May 2006, a policy to deal with earthquake prone buildings; being those defined as vulnerable to a moderate earthquake.
It should be noted that the policy will not cover "small" residential buildings such as single or two storey houses.
Under the new regime a TA must first assess the level of earthquake risk within its area, identify earthquake prone buildings and prepare a list of buildings which pose a danger to people's safety. TA's will issue compliance notices setting out strengthening and upgrading works required and timeframes for compliance. In very high risk cases TA's may issue notices requiring urgent strengthening work to be undertaken.
Higher risk buildings are likely to be pre-1935 structures and include buildings constructed in timber, unreinforced masonry and brick veneer. Steel and concrete buildings of more recent decades are less likely to be affected although some buildings between 1935 and 1976 could still pose risk, depending upon their location and structural characteristics.
Although Auckland is considered a low seismic activity area the total cost of earthquake strengthening of the central City's commercial buildings alone has been estimated at more than $250 million. Auckland City Council to date has signalled it will take a commonsense approach to policy setting and implementation. It has suggested that in most cases seismic upgrading would only be required at the time a building owner seeks consent for other structural works to the building. It is anticipated that building owners would have the right to challenge the compliance notices by applying for a Department of Building and Housing determination.
The new regime raises some potentially serious cost implications for certain old buildings particularly any classified as very dangerous and requiring urgent upgrading. Many of the City's heritage buildings are likely to be affected. There are potential market value implications relating to liability for upgrading costs and the presence of an earthquake prone "tag" in a Land Information Memorandum for a property, particularly if seismic compliance was not previously a known issue for a building.
The message for prospective purchasers is to be wary when considering acquiring older buildings of potentially at-risk construction types, consult Council's records and if appropriate take professional advice on structural issues. This advice holds also for prospective purchasers of strata title interests eg. apartments or office floors in older, potentially at risk buildings where upgrading costs might ultimately fall to individual owners through the Body Corporate.
Staff Changes - Introducing...
 Craig McCormick |
Originally from Hamilton, Craig moved to Auckland in 2000 and is a keen sportsman, playing soccer for Mt Albert-Ponsonby and working hard on his handicap after recently taking up golf.
Back issues of the newsletter can be obtained from TelferYoung (Auckland) Ltd
Phone: 379 8956
Fax: 309 5443
PO Box 5533
Auckland
www.telferyoung.com
email: auckland@telferyoung.com
+ Evan Gamby + Lewis Esplin + Trevor Walker + Ian Delbridge + Dave Regal + Phil White + Bruce Somerville + Bob Hawke + Weston Kerr + Arthur Appleton + Sonia Dryden + Yoon Jin Cha + Matthew Straka + Mark Maginness + Aimee Martin
Opinions expressed in this newsletter are of a general nature and should be used as a guide only. TelferYoung should be consulted before acting on this information.