By Chris Hutching
Friday 24th November 2000
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He said the number of retail developments proposed in the Auckland area would swamp the market and lead to further decline of suburban centres as was evident at places like Panmure.
In Newmarket alone the proposals by Westfield and 277 Mall would more than double the amount of retail space from 50,000sq m to 130,000sq m. Plans to develop or enlarge other malls like St Lukes, Botany Downs, and Pakuranga would exacerbate the situation. "I realise there's a fine line between objecting on the grounds of competition and on the basis of economic sustainability but I think it's something the courts will have to grips with."
Mr Keys said the developments proposed at Newmarket would undoubtedly make it one of the pre-eminent malls in Auckland but would put some pressure on the trust in the competition for retail tenants, at least initially.
The decision this week disallowing the Winstone quarry retail development by Terra Firms was a step in the right direction and showed that the Auckland City Council was no longer hell bent on approving every application that came before it.
Newmarket recently posted its annual result to June 2000, which revealed a 3.9% fall in the portfolio value. The Newmarket assets lifted slightly but were offset by a 13% fall in value of the ASB Centre largely because four of the 17 floors come up for lease renewal next year and because of the low price obtained for a building sold by Southern Capital earlier this year.
Mr Keys said it seemed unfair that values could be affected by the sale of other buildings. The 30% discount on the value of the trust's units compared to asset backing was excessive, he said.
Mr Keys spoke this week at a Property Council seminar where he outlined how major Australian developers and property managers were dominating the New Zealand scene. Speakers such as Greg Whitten, head of investments Tower Asset Management, noted the muted property market prospects but pointed out that returns from property were still around 6%.
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