We trust you are all well, staying positive and adjusting to the new normal following the move to Level 1.
It appears that New Zealand is in a unique position versus many parts of the world with the control of Covid 19. The next step will be how the economic impact will unfold and how New Zealand can take advantage of the gains made. Certainly, the flow of kiwis choosing to return home will be interesting to track in terms of New Zealand’s net migration figures in 2020, clearly population growth should assist the housing market.
We’re pleased to report that The Ed is tracking along well and at this stage is back on program to complete in July 2021.
In terms of some detail, fitouts of the apartments are well underway with kitchens and bathroom installation advancing and floor coverings been installed. The bulk of the façade is now complete with some of the scaffolding down on the Eastern and Western sides of the building. The scaffolding is due to be taken down from the Edwin Street frontage in March, which would be a good time to take a look at the project if you’re passing.
From here the finer project details are been worked through from common area fitouts, furniture, fittings and fixtures for Quest and the apartments. We’re also working with Quest on their move-in and operational requirements. The team is organising the final installation details of our customer electrical network, Freedom internet, electric car charging stations, electronic courier locker storage, storage units and our common area co-working lounge.
LEASING – THE ED
As we get closer to the completion of The Ed we will be working on the marketing of the property to provide the rental market with a full appreciation of the 36 apartments available. This will include additional site signage, advertising and potentially some PR. We will also be using carefully selected rental agencies to assist.
You may have noticed some improvements to our website which will be continually enhanced as projects are completed and more information is available. The intention is that the website will provide Residents and Investors with relevant up to date information on the properties and company. If you haven’t had a chance take a look at www.residentproperties.co.nz
The amendments to the Residential Tenancy Act also came into force on 11 February 2021. Our view is that the bulk of the amendments are ok and in line with Resident Properties strategy. The key items we’ll be focussed on are the changes to fixed term agreements and the rights for the landlord to terminate an agreement. For information of the amendments please refer to : https://www.tenancy.govt.nz/about-tenancy-services/news/residential-tenancies-amendment-act-2020-now-in-force/
It’s hard to ignore what’s going on in the Auckland housing market as the media are enjoying publishing the latest housing statistics or the latest government announcement of how they are going to deal with affordability and supply.
It will be interesting to see if the government begins to support the Build to Rent market as another way to increase housing supply, for an interesting article on this topic refer: https://i.stuff.co.nz/life-style/homed/renting/124183905/unleashing-buildtorent-to-solve-the-rental-crisis
In summary the Auckland Housing market from January 2020 to January 2021 rose 14.9% with the median house price rising from $870,000 to $1,000,000. This is clearly more than most were anticipating 12 months ago, however it will be interesting where the market goes to from here and what NZ’s population growth numbers are. Population growth undoubtedly fuels the housing market along with the low interest rate environment. We’re obviously very interested in the impact that the current market is having on rental demand and supply, which we’ll be tracking closely.
For more information on the housing market please refer to: REINZ Monthly Report
As highlighted at the Annual General Meeting we are working on some exciting new projects for the Resident Properties to undertake to provide a larger more diverse portfolio. We are currently completing due diligence and expect to be through this process by the end of March.
Clearly to proceed with the projects further capital and debt will be required. Following the due diligence period we will be providing more information to you on the capital raising program. At this stage this is anticipated to run from April to May 2021. The NTA of the company will be valued as at 31 March 2021 which will include a re-valuation of The Ed.
We hope this has been a useful update, if you have any questions please do not hesitate to contact the Resident Properties team.