Property becomes big money spinner at CentrePort
The significance of property development activities to Wellington's CentrePort balance sheet underscores why it will not bow to pressure from private property interests.The 2010 annual report reveals that property development has become a major contributo
Chris Hutching for NBR NZ Property Investor
Tue, 05 Oct 2010
The significance of property development activities to Wellington’s CentrePort balance sheet underscores why it will not bow to pressure from private property interests.
The 2010 annual report reveals that property development has become a major contributor to overall profit.
Core port activities provided revenue of $46.4 million and a profit before tax of $9.2 million, steady on last year. But the property division revenue nearly doubled to $16.9 million, providing profit before tax of $4.5 million.
CentrePort is majority owned by the Wellington Regional Council with a minority stake held by Horizons Regional Council. Its property development arm has developed a handful of commercial buildings on its Harbour Quays site near the railway station and Parliament.
Private rivals
Wellington private commercial property owners and developers are in high dudgeon about CentrePort’s plans to proceed with more developments in competition with them. They say the harbourside developments will drag business out of the nearby central business district (although the harbour is arguably part of the CBD given the short walking distance).
In 2007 this culminated in a deal brokered by the Property Council in which CentrePort agreed to restrict its development activity. Under that arrangement CentrePort has another 25,000sq m of office space to develop. But the agreement does not cover other mixed and retail developments and this where CentrePort appears to be heading.
Secret initiative
CentrePort is currently marketing “up to” 50% of the interest in three buildings on a leasehold arrangement to facilitate further development and for a transport initiative that remains secret.
The three buildings include the soon-to-be-completed Customs building of about 7000m2 (expected to have a rateable value around $30 million), the five-year old Statistics building of 9400m2 (with a rateable value of nearly $30 million), and the recently completed BNZ building with 20,500m2 (rateable value $95 million). Any sales would involve the ground lease and a proportion of the buildings.
During the financial year, property development included completion of building for BNZ and a new Customhouse building.
CentrePort has four classes of investment property – developed properties; land available for development; investment property held for sale; leased assets. The investment property portfolio is valued at $218 million.
Chris Hutching for NBR NZ Property Investor
Tue, 05 Oct 2010
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