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CDL Investments unfazed by changes to law changes for foreign buyers

Thursday 8th February 2018

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Listed-residential property developer CDL Investments New Zealand, controlled by hotel operator Millennium & Copthorne Hotels New Zealand, isn't overly concerned by planned law changes for foreign buyers, although it warns the tweaks may block the consenting pipeline. 

In its annual report, Auckland-based CDL said demand for housing sections remained steady in 2017 despite lending curbs imposed by the Reserve Bank and tighter credit criteria weighing on the property market. Chair Colin Sim said changes to the Overseas Investment Act to classify residential housing stock as sensitive land targeted demand, and as a housing development company CDL has consistently shown its commitment to increasing supply. Still, Sim said the changes proposed in the current form may have unintended consequences. 

"These include the number of consent applications and time required to process them," Sim said. "Both measures are expected to increase with significant delays and costs to the housing industry." 

CDL reported a 19 percent gain in net profit to $32.2 million, or 11.6 cents per share, in calendar 2017 on a 5.6 percent gain in revenue to $78.7 million. As at Dec. 31, its development property was valued at $124.7 million, up from $117.8 million a year earlier. 

"CDL will continue to drive sales activity of its existing housing sections in 2018 with the aim of delivering another year of growth in 2018," Sim said. "The board and management will also continue to progress consents and future development approvals for projects in the pipeline as well as continue to seek to acquire additional land for future development."

The board declared a final dividend of 3.5 cents per share, payable on May 18, and up from 3 cents a year earlier. 

Millennium, which controls CDL, posted a 6.6 percent gain in annual profit to $43.1 million, or 27.25 cents per share. Revenue rose 8.9 percent to $187.3 million as New Zealand's booming tourism sector underpinned its hotel operations and it benefited from positive sales from its development subsidiary. 

"We expect 2018 to be another positive and exciting year for MCK. With the addition of Grand Millennium Auckland and M Social Auckland in particular, we expect to benefit from the growing number of tourist and business visitors," Millennium chair BK Shiu said in a statement. "Being different hotels that appeal to different market segments, Grand Millennium Auckland and M Social Auckland will assist MCK in attracting a diverse variety of visitors."

Millennium's board declared a final dividend of 6 cents per share, payable on May 18, and up from 5 cents a year earlier. 

Millennium shares rose 2.5 percent to $2.90 while CDL shares gained 1.1 percent to 96 cents. 

(BusinessDesk)

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