We sincerely hope that you are well during the NZ Lockdown and these uncertain times as a result of the Covid 19 Pandemic.
At this stage it is impossible to gauge how the impacts will play out in the medium to long term, however there is no doubt that we are in for some turbulent times in the short term. We will keep a close eye on the impacts as they evolve and keep you informed as much as we can. Clearly, Covid 19 is a topic of conversation and concern with everyone at present.
In terms of an update on our first project, the site team has been able to stand the majority of the ground floor precast panels with most of the first floor now formed and concrete poured.
The site team has prepared the first floor at the front of site and the second floor at the back. Both lift shaft structures are being formed quickly and are easily identifiable as they are taller than the rest of the structure on site.
You can now get an appreciation of the scale of the building and the fact that the project will effectively complete the re-development of Edwin Street which had numerous projects and/or refurbishments completed over recent times. We have attached some recent construction photographs for your review.
Prior to lockdown, the site team continued to keep the neighbourhood informed of activity on site and upcoming progress. We believe this is an essential undertaking particularly as Resident Properties is a long-term owner of the project and will be contributing to the neighbourhood through the introduction of a Quest Hotel and 36 residences. We’re also keeping in close contact with Quest to stay updated on how they are tracking in the current environment.
The Haydn & Rollett team was well prepared for the changes been brought about by Covid 19 in terms of Health and Safety and will re-program the project as a result of the lock down. Prior to the lock down, there had been no evidence of supply chain issues for our project, however time will tell.
The Management team is continuing to work on creating robust apartments which will appeal to the wider rental market. Kitchen designs are now complete and selection of flooring in the bedrooms and living areas are now finalised.
We have also designed hard wearing finishes in the foyer areas to withstand furniture movement that will be more regular in the rental market.
Other items we are working on include standardised lease documentation, potentially the creation more interactive common spaces, multi-use storage lockers and electronic keying systems to avoid the obvious problem of hundreds of separate keys and security issues.
We are also working on the implementation of a user-friendly property management system which provides relevant access to tenants and service providers along with Resident Properties and Area Management.
The Auckland residential market had been full steam ahead with many agencies reporting high sales activity. We were monitoring this closely as it may have simply been a catch up from a relatively slow period during 2019 or genuine market momentum. Once again, we’re expecting changes as a result of the Covid 19 impact.
On the positive side the reduction in the OCR by the Reserve Bank should reduce the impact of interest costs for many property owners and you may have noticed that the government has reversed its rules of limited depreciation tax benefits which will also assist investment property returns. Clearly, there have been a number of stimulus packages announced by the government as a result of the Covid 19 Crisis, which we will continue to monitor the impact on Resident Properties.
RESIDENTIAL TENANCIES ACT 1986
The Government has announced proposed changes to the Residential Tenancies Act.
The proposed changes seek to:
Remove the ability for landlords to end a periodic tenancy agreement with no cause. The legislation will instead provide for a range of justified reasons to end a periodic tenancy, including new provisions to respond to antisocial behavior.
Require that fixed-term tenancy agreements must become periodic tenancy agreements upon expiry unless: both parties agree otherwise, the tenant is not meeting their obligations, or specified grounds for the tenancy to end apply.
Increase financial penalties and give the regulator (through the Tenancy Compliance and Investigations team) new tools to take direct action against parties who are not meeting their obligations.
Allow for identifying details to be anonymised in situations where a party has been wholly or substantially successful when taking a case to the Tenancy Tribunal
Prohibit the solicitation of rental bids by landlords and limit rent increases to once every twelve months.
Ensure that tenants can add minor fittings such as brackets to secure furniture and appliances against earthquake risk, baby proof the property, install visual fire alarms and doorbells, and hang pictures.
Our view is that a number of the changes are targeting individual property owners rather than companies such as Resident Properties. Therefore, at this stage we do not believe they will negatively impact Resident Properties.
There have been a number of further changes announced by the Government as a result of the Covid 19 Crisis some of which may have long term impact on the residential rental market. Again, we will keep track of these as they arise and consider the real effects on Resident Properties.
We are continuing to work on other potential projects for Resident Properties and will advise you of details as these evolve. These will only be considered if they fit in with Resident Properties key objectives of providing solid investment returns though building and owning good quality residential accommodation buildings.
Our absolute priority remains to successfully complete 34 Edwin Street, Mt Eden.
We wish you well, keep safe and if you have any questions, please contact the Management Team.