Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Kyoda. I'm Chelsea Daniels and this is the Front Page,
a daily podcast presented by the New Zealand Herald. From
the ongoing downfall of high flying developers to promises of
Swedish meat balls, this year is set to be one
to watch when it comes to property news. Major developments
(00:29):
are getting underway after the passing of the Fast Track
Approval Act, while some projects that have been under construction
for years are close to completion. But after a few
years of a tough lending landscape and issues in the
construction industry, I'll be closer to getting back on track.
Today on the Front Page ends at Herald, property insider
(00:51):
An Gibson joins us to share her property predictions for
twenty twenty five. And let's start with perhaps a big
property story of twenty twenty five that's going to be continuing.
The Deval Group. You've spoken to us about them before.
(01:11):
When are they expected to be before the court.
Speaker 2 (01:14):
So there's a number of dates that are set to
have court appearances with Charlotte Clark, the chief executive of Duval.
And this is action that the Financial Markets Authority and
PwC is taking against them. So ready we've got a
February date that's due for an update on the clerk's
(01:34):
legal position getting legal aid. We've got the receiver's PwC
to provide an update to the court in March, and
it's not till June that we've got the more substantive
three day hearing due. So that's going to be I
think one of the larger stories for this year because
there is so much action on that front, and also
(01:56):
the amount involved. So John Fisk, one of the receivers
PwC said two hundred and thirty seven point six million
OD and the report that PwC issued also expressed concern
about irregular accounting entries.
Speaker 1 (02:13):
I was going to say that about the money. I
saw one story last week about one entity alone owing
four point six million dollars in taxes to IRD. So
is there just a massive paper trail that they're working
through at the moment.
Speaker 3 (02:25):
Oh.
Speaker 2 (02:26):
I think that was really interesting. When John Fisk talked
about the duval entities last year, I think he compared
them to something like spaghetti from memory. He said there
were so many interconnections, there were so many entities. I
think there's more than sixty companies. It's a very complex
where it's a very complicated receivership and statutory management. Nothing
(02:48):
is really clear there yet. At the moment.
Speaker 4 (02:55):
We were looking at the social media, this guy was
saying things like, you know, hates the thing that sharpens
my blade kind of thing, and posting pictures of himself
next to his Rolls Royce with duval one number plate
on it.
Speaker 5 (03:07):
Business Desk property editor Maria Slade has been following Duval
closely since her first article in twenty twenty one raised
concerns this is.
Speaker 4 (03:15):
Not normal behavior for a property developer who's just trying
to get on with the business of building houses.
Speaker 1 (03:22):
You know, are you surprised by how fascinated people are
in this case?
Speaker 2 (03:30):
No, not really, because of the fact that the clerks
were very high profile in terms of the life style
that they were living in the image that they projected
of highly successful property people. It's interesting too that also
we're still getting updates from Kenyon Clark talking about him
not living in fear, finishing his book, wanting to get
(03:51):
his passport back, wanting to hold the FMA and PwC
to account. So it's kind of this battle that's going on,
and I think it's got all the elements of a
store that people are interested in, and the unusual thing
to me is that most property developers are not like
that at all. This does fulfill a certain image that
people may have, but it's not actually the reality. This
(04:13):
is exceptional.
Speaker 1 (04:14):
It sounds like something that could be turned into a
Netflix mini series at some point, doesn't it.
Speaker 2 (04:18):
Well, there was a documentary being made called The Property
Developers and it was going to go into season two.
We haven't seen season one. When I talked to the
producers of that last year, they talked about an international
platform purchasing the rights to that. Seems fairly unlikely at
the stage, but you know, good surprise on the upside.
Speaker 1 (04:39):
Let's move on to developments. The Fast Track Approval Act
passed last year. How many projects are we expecting to
see get kick started from that?
Speaker 2 (04:49):
Well, there were exactly one hundred and forty nine approved
in the legislation that was passed before Christmas. There were
more than three hundred applications made. Now I'm gradually working
my way through the list. It's quite a daunting but
the first two which I found really interesting were a
revelation that there was a project and to develop the
heart of devport for more than four hundred million dollars
(05:09):
by Peninsula Capital, which is headed by Beerige Spencer. And
the second one is a court of a kilometer high
tower on the waterfront the downtown project Nati Fato or
Rachai and also precinct properties together on that so they're
talking about retail, apartments, offices, and a big civic component
of that too. So that's just two of those. But honestly,
(05:31):
when I look at the list, it is a fascinating list.
It's everything from wind farms to power stations, to golf
courses to you name it all in there.
Speaker 5 (05:42):
This is the very spot hundreds, maybe even thousands of
shoppers will flock to every day. That's because it's the
site of New Zealand's first ever I Care constructions finally begun,
with the initial earthworks very much underway, but don't get
too excited just yet, with doors only set to open
in twenty twenty five.
Speaker 1 (06:04):
Now, I'm going to move on to something that I
know a lot of people have been asking me about.
Probably a lot of people have been asking you about
as well. We've been waiting for IKEA for decades and
it's nearly here. What's the latest you've heard there.
Speaker 2 (06:18):
Well, so Ikea have announced that they will open in
the final quarter of the twenty twenty five calendar year,
and it does look very likely in that late last
year they issued an update showing that about a quarter
of the exterior cladding is on this huge warehouse and
just on the other side of the railway lines from
Sylvia Park. So Nayla Love the biggest builder in New
(06:41):
Zealand in terms of workloads. It was, of course working
on the christ Church Cathedral. They are moving at pace
on that site. So let's hope that Ikea does open
in the final quarter of the year. You're right, there's
a huge amount of interest in it. It will be
fascinating and it will bring a new concept to New Zealand,
that concept of the themes and the rooms where you
(07:02):
kind of go into another zone, don't you when you
walk through an ik shop. Don't I had this experience?
But you know, oh, could my bathroom look like that?
Could my kitchen really hum in that way?
Speaker 1 (07:12):
Wow?
Speaker 2 (07:13):
Look at that bedroom design. I could change mine around
and you know, so they're really good at that kind
of experiential aspect and we get what the meatballs as well.
Speaker 1 (07:22):
Which is very pod That was going to be my
next question, and the Swedish meatballsolutely so there is an
Ikea in Adelaide. Actually I can't remember when we got
that when I was growing up, but the meatballs were
obviously a massive draw card. And you're right that experiential
kind of shopping experience as well. There are literally arrows
(07:43):
on the floor to guide you through each and so
even if you're not looking at kitchen appliances, you will
be seeing them as you make your way towards the meatballs.
Speaker 2 (07:53):
I had a fascinating experience with the ike executives a
couple of years ago when I was interviewing them and
they wanted to ask me about I care experience, and
you know, said, look, I have been to a number
of overseas because it's very interesting from a property perspective.
In fact, I have visited that one Adelaide. It's beautiful.
And they wanted to know from me what did I buy,
and I said, well, look, to be honest, to things,
(08:13):
piller case, you know, internal linings that are really cheap
and really good, and pigs. Because I was traveling internationally
so it was like these things could fit in the suitcase,
no useful. Hey, you know what, we're still using those things.
Speaker 1 (08:39):
Are there any other big brands making a move our
way this year? I have been personally advocating for something
like Audi to enter the market, but I know that
my wishes are probably not going to be cast.
Speaker 2 (08:50):
Wow, very good question. There is the second largest retail
development in Auckland at the moment after I Care. Actually
is the new Tesla showroom at Westgate mark Gunton's development.
Now that is huge. The Mecky Center is eighteen thousand
square meters. Are drove past it this week, unbelievable. You
go for a long way down the street before you
(09:13):
finish passing that building. So the building is up, it
will open this year. I know we already have Tesla outlets,
but this is a whole new level just down the
road from Tesla really quite absolutely opposite the Costco is
a twenty four to seven kmart, the biggest in New Zealand.
That's going to be opening. So you know, these sorts
of things. It sort of shows also a level of
(09:34):
confidence in Westgate, but also in that economy, people still
spending buying the electric vehicle, you know, going into kmart
kind of like one end of the retail experience to
the other. But I think Westgate is a really good
example with all the new data centers going up there
of growth and confidence in the economy.
Speaker 1 (09:52):
On the other side of the equation, there's the developments
that have flopped or gone stagnant. Let's start with c
Skate without a part building on Auckland's Customs Street that's
essentially abandoned. Is there any movement there?
Speaker 2 (10:05):
Yes, it's really unfortunate. At the moment, we had an
article about a young person scaling the crane of seascape
at night and hanging by one hand from it. So
August two, China Construction. Actually the builder there won their
building disputes tribunal ruling when they demanded thirty three million
(10:27):
from Shundi Customs. That's the developer. So we've had no
work on that site for many months, or the trades
businesses have pulled away from there, taken their tools with them.
We're just hoping at the stage that will resume, that
the impasse between the builder and the developer will be
resolved and that the people will return to the site
(10:49):
and finish it. It's clad up to I think somewhere
about level thirty five and you know it's fifty seven
levels tall. It is a terrible thing for Auckland to
have a building that big sitting idle for that long.
It's also very bad for the structural components on the
site to be exposed to the weather for that length
(11:09):
of time. Buildings are made to be closed, and they're
made to be used. They're made to be worked and
lived and they're not designed to be left open to
the elements like this. And what is it about construction
Because I'm looking at the liquidations.
Speaker 1 (11:25):
Construction as an industry leads all industries.
Speaker 3 (11:28):
Why yes, where the canary and the coal mine. Unfortunately,
because essentially as soon as interstrates start going up to
consume it, confidence comes down. Therefore people stop investing. People
haven't spending the money. So private investors who are building
the likes of shopping malls, retail restaurants and are like
those projects immediately dry up.
Speaker 1 (11:52):
And there's been a lot of woes in the construction
sector in the last few years. A lot of builders
and developers have gone under. You report it on another
apartment developer declaring insolvency just last week. Where are things
at now? Are we seeing some stability or even to
pick up in new builds yet or do you anticipate
that will happen this year?
Speaker 2 (12:11):
I said in a column about the future twenty twenty five,
zero powers to predict what I do see every day
as a number of insolvencies on the company's office. Now,
these are usually the shareholders themselves calling in the liquidators,
Unable often to pay tax bills, unable to repay big loans.
You know, it's a really serious situation. Often what's occurred
(12:34):
is the is the building has been finished and been sold,
but the financial fallout may still mention COVID man that
has a tale that is just unbelievable, the COVID lockdown
and the pandemic. It's in virtually every receiver's liquidators report
that I'm reading at the moment. And the worst thing
(12:56):
is too I think that in land revenue they talked
about going full throttle, but also in land revenue are
often a creditor, and the building suppliers are often creditors,
as are many consultants and trades, and that is really concerning.
That really does hit hard, and I don't see any
let up at the stage. I wish I did what.
Speaker 1 (13:17):
Do you think will be the big property trends this year?
Speaker 2 (13:22):
In Well, I think the focus will really be on
a number of things. One will be that seascape tar
that is a very unusual situation, both parties out of China,
very little control by New Zealand authorities to do much there.
I do think dval will be interesting because of the
number of court fixtures, dates, hearings, callovers whatever you refer
(13:43):
to them as. I think that will be ongoing. There's
actually a tremendous amount of development going on in Auckland
at moment despite the downturn in the economy. If you
look at the skyline you see a lot of cranes,
so what expect continuation of quite substantial amounts of work
and when it when it all comes down, Really a
lot of people are talking about the decline and interest
(14:04):
rates and that giving the economy, you know, a bit
of a follow up really, I'm yet to see that
hugely in the market at the stage. I think for
me it's very much a projects based year and I'll
be really interested to look out for new projects. Walworths
has announced although I've applied for a huge expansion of
(14:25):
a distribution facility at Woodie, which I'm yet to write about,
but you know that shows, you know, an agglomeration of
their distribution operations, so Supermarket's really doing well. You know,
those will be the sort of themes that I think
we'll see this year.
Speaker 1 (14:38):
Thanks for joining us, Ann, You're welcome. That's it for
this episode of the Front Page. You can read more
about today's stories and extensive news coverage at enzadherld dot
co dot MZ. The Front Page is produced by Ethan
Seals and Richard Martin, who is also our sound engineer.
(15:00):
I'm Chelsea Daniels. Subscribe to the Front Page on iHeartRadio
or wherever you get your podcasts, and tune in tomorrow
for another look behind the headlines.