MHP Newsletter – September 2017

September 29, 2017


Welcome to MHP’s Q3 newsletter. We’re sure all our readers will be happy to see the arrival of spring, which has been a long time coming. The big issue of course is the election and as we prepare this newsletter the outcome of last weekend’s vote is still unknown. We are watching developments with interest as the major parties get down to business with Winston. Whatever the outcome, let’s hope the new government is formed swiftly.

We hope you enjoy this newsletter – please contact us if you have any comments. We also invite you to follow us on LinkedIn for all our latest news and updates.

Happy reading,

the MHP team.

Comments from Ron Mackersy

As we head in to the fourth quarter of 2017, uncertainty still characterises the markets. The election is over, but the outcome is still to be determined. Globally, the effect of Trump is still a hot topic and hurricanes, weather bombs and earthquakes have caused major damage worldwide.

Where does the New Zealand property market sit? Sales numbers are down but we are yet to see sustained price falls or the loosening of commercial yields. Hot spot Queenstown still bucks the overall trends. The airport numbers defy belief (over 1.8 million passengers in the year ended June 2017), infrastructure is struggling and land prices and development costs are at all time highs. 

The banks now seem to have more available funds in the commercial area. Competition between banks should hold or soften margins. We have also seen an increase in overseas interest in buying commercial property as overseas yields are still very low and New Zealand is seen as a stable alternative. Let’s hope our political situation gets resolved quickly as this could provide a review of how the world sees us. New Zealand was going so well – how things change!

News from Dale Robertson’s desk

Since our last update in June, we have continued to grow the MHP team to meet the demands of business growth. In Christchurch we have recruited Gabrielle Wethey to look after human resources and we are in the process of bringing a new property manager on board in Queenstown.

As is usual for this time of year we are planning for 2018 and beyond. This includes business growth forecasting and making sure that our people, systems and processes are robust enough to cope with ongoing growth. We are also working with Mitchell Mackersy Lawyers on a communications plan intended to keep directors, shareholders and tenants better informed. 

Along with Mitchell Mackersy we are also analysing the results of our recent shareholder survey and looking at how we can improve our systems and processes to address the issues raised. Thank you to all shareholders who filled out the survey – your feedback was very insightful.

New joiners to management portfolio

This quarter we are pleased to have added two significant new properties to our management portfolio, detailed below. Both are owned by groups of investors represented by Mitchell Mackersy Lawyers. We have also seen growth in our private management portfolio, with the addition of an office building in Middleton, Christchurch and a retail and office complex in Dunedin.

Countdown, 24 Medway St, Gore

Leased to Countdown, this 2260m2 building was originally constructed in 1983, extended in 1994 and modernised in 2009. Its seismic strength is significantly in excess of minimum standards at 129% of NBS. The supermarket occupies a prime 5800m2 site with excellent access and parking. 

31 Deveron St and 101 Don St, Invercargill

Business advisors and chartered accountants Malloch McClean occupy this modern, purpose built two-level office building in the Invercargill CBD. Calder Stewart constructed the 1408m2 building in 2012 for the tenant, who requested a high quality build and fit out. The property includes 24 car parks.

Health and safety update

The regulations around working with asbestos changed on April 4 2016.

The Health and Safety at Work (Asbestos) Regulations 2016 state that every building built prior to 2000 must be assumed to contain asbestos, and that no-one can go near it unless they comply with the regulations. PCBUs (people conducting a business or undertaking) with control or influence over a workplace have until April 2018 to develop a plan to manage the risk of exposure. The regulations are consistent with the Act’s intention that there is a collective responsibility to manage risks to health and safety. 

As the duty to indicate the location and presence of asbestos applies to a wide range of PCBUs and activities, we will be reviewing our management portfolio to identify those buildings built prior to 2000 to ensure compliance. For more information, please contact Anita Brosnan, Project & Compliance Manager, email

Guest column from Crombie Lockwood

We are delighted to have been appointed to provide insurance broking and advisory services to MHP across its entire property management portfolio. For those readers who don’t know us, Crombie Lockwood is the largest insurance broker in New Zealand, with around 750 professionals across 26 offices. Our Christchurch office, which is overseeing our work for MHP, has around 100 staff including a dedicated claims team. Internationally we have global reach through our parent company, NYSE-listed Gallagher.

The current property insurance market in New Zealand is best described as “destabilised and uncertain” with premium and deductible increases being imposed. Unsurprisingly this is principally due to last year’s Kaikoura and Wellington earthquake along with a losing hand of floods, fire (Port Hills) and tropical tempests.  New Zealand insurers are particularly impacted as they don’t have the geographic spread of risk or premium volume to offset the claims. In short, the industry’s entire premium income is many times less than the cost of claims. This is creating an unsettled market.

In this environment, our role as MHP’s insurance broking and risk advisor is to insulate the property portfolio from these influences. We will be providing further market updates in future issues of this newsletter, so watch this space.

Guest column from ANZ

While the impacts on the economy of the election are still unknown, we did note some interesting currency movements in the lead-up to the election. 

The graph below shows the currency drop sharply (first yellow line) following the first poll with Labour’s new leadership and growing popularity. The second yellow line shows the sharp rise (almost 1 cent across the board) after a later poll showing an increase in National’s popularity. We all know the polls are what they are, but the impacts on the NZ dollar are very interesting.

On the interest rate front, bank funding pressures have eased somewhat but not disappeared. The gap between household lending and deposit growth has narrowed, which would suggest less competition for attracting domestic deposits. However, with the external borrowing constraints persisting (more scrutiny from regulators and credit rating agencies), lending growth is unlikely to increase unless deposit growth keeps pace. With the latter being somewhat of a restraint, tighter lending conditions are likely to remain for some time. This is likely to provide some stability around interest rates and credit margins at current levels, however the lag effect means a number of borrowers may face margin increases as facilities renew or extend to get to current levels.

Team member profile

Sonia Adams-Richardson

Sonia joined MHP’s Christchurch office in March 2017 as Property and Facilities Manager, looking after MHP’s management portfolio in Show Place Business Park, Addington, Christchurch. She is also Property Manager for Cardinal Logistics’ new facility at Waterloo Business Park, Christchurch; and the Countdown supermarket in Gore. 

Sonia is of Brazilian-German descent and has lived in Christchurch since late 1990s, apart from a recent five-year stint in Auckland. Her recent roles include working as a body corporate manager and commercial and industrial property manager in Auckland. Sonia holds a Bachelor of Property degree from Auckland University.

MHP Newsletter June 2017

June 22, 2017

It’s hard to believe we are already half way through 2017. So far this year is as busy as ever for MHP as we continue to recruit new team members, move to bigger offices and bed down new properties into our management portfolio.

In our last newsletter we outlined our increased focus on health and safety across our management portfolio. As part of this focus we are pleased to have gained Site Safe New Zealand membership, demonstrating our commitment to improving and promoting a culture of health and safety in the New Zealand construction industry.

We hope you enjoy this newsletter, please get in touch if you have any feedback.


the MHP team

Comments from Ron Mackersy

As I mentioned in MHP’s March newsletter, the availability of bank funding has tightened over the course of this year, particularly for property developers. Banks have experienced such high demand over the past few years that they have reached (or nearly reached) their lending limits determined by the Reserve Bank. This is affecting developers, many of whom are now struggling to get the finance required to get new projects off the ground.

With most of our product coming from developers, this will have an impact on the availability of new stock. If developers are having difficulty securing funding, they will defer the commencement of projects and we will have fewer assets to buy.

In this environment, we are still aiming to provide investors with a reasonable number of opportunities over the coming months. We are being offered more purchasing opportunities off-market, which will change pricing dynamics in some cases.

The other major factors affecting the market over the second half of this year – in particular interest rates, President Trump and the NZ general election – are all resulting in a heightened mood of uncertainty. We will be watching with interest as it all unfolds.

News from Dale Robertson’s desk

We have welcomed several new tenants into our management portfolio around the country so far this year. One of the latest additions is NZ Sotheby’s International Realty, which has signed up to take a retail unit in the ground floor of the TradeMe building at One Market Lane, Wellington. Fit out works are currently underway and we look forward to welcoming Sotheby’s into the building next month.

Minor earthquake damage to the building is in the process of being repaired and this is expected to be completed without any interruption to the tenants’ businesses. The building is an excellent asset with a good mix of tenants which also includes TradeMe’s national headquarters and Mojo Coffee Cartel, which operates one of its flagship cafes in the building.

With health and safety an ongoing area of focus, our Project and Compliance Manager, Anita Brosnan, is now finalising a list of preferred contractors covering our entire management portfolio. This in-depth process has involved thorough scrutiny of each contractor’s health and safety processes. As a result, two companies are no longer being engaged to provide services due to an insufficient level of compliance.

We are also working with a small number of contractors which are in the process of updating their health and safety protocols to ensure compliance. These contractors have expertise that is valuable to us in certain locations, so we are aiming to work with them to bring their processes up to our stringent standards.

We are also pleased to welcome Vicky Barke who has joined our Queenstown team as Assistant Property Manager. Vicky joins us following eight years in the tourism industry, where she worked in various accounts and administration roles.

 Cardinal Freight facility joins management portfolio

We are pleased to welcome Cardinal Freight’s impressive new building at Waterloo Business Park, Islington, Christchurch, to our management portfolio. This is a large-scale, modern warehouse facility with floor area of nearly 14,000m2. The building was completed in November 2016 and includes a 14m high stud warehouse, expansive canopy area, 48 car parks, yard space and offices.

Cardinal is one of NZ’s leading logistics companies, specialising in distribution and storage solutions with a strong focus on grocery products. Its site at Waterloo also includes additional land to accommodate possible future expansion of the business. 

Queenstown market at cyclical peak: Colliers

Colliers has released its annual Property Market Review and Outlook Report for 2017. The report details Colliers’ key predictions on various sectors of the Queenstown property market, along with sections on the Wanaka and Dunedin markets. 

The report is available to download on the Colliers website here.

MHP and MML move to new office in Queenstown

MHP has moved (along with Mitchell Mackersy Lawyers) to new premises at Five Mile, Frankton, Queenstown. MHP and MML can now be found in their new office space above ANZ in the new retail centre. 

British & Irish Lions Live Site, Christchurch

Throughout June and July, a Live Site is operating in the new public space outside the Vodafone building in Christchurch (managed by MHP).

Fronting Poplar Lane, the Live Site features a big screen for watching the Lions take on the All Blacks and Crusaders, along with entertainment and food vendors. Just across the road is the newly-opened Little High Eatery, an international-standard food emporium featuring eight licensed food outlets which are already well-known around Christchurch, from their presence at farmers markets and the Re:Start container mall.

If you’re in Christchurch, it’s a great chance to head down and check out this newly-rebuilt corner of the CBD.

Team member profile

Anita Lee-Smith

Anita joined our Christchurch-based accounts team in early 2017. She has significant experience in the accounting field, having worked in accounts roles for several organisations and corporates since the early 1990s. Her most recent role was with body corporate and commercial property managers Thompson Wentworth Ltd, where she gained significant experience managing extensive day to day accounts, EQC repair cashflows, general insurance claims and liaising with committees and owners.  

Anita brings this strong experience in body corporate accounting to MHP, where she assists Financial Controller Julie Elliott with accounting and financial management across our portfolio.

Colliers releases 2017 Queenstown Market Report

June 20, 2017

The Queenstown property market is at a cyclical peak. However, the medium term outlook remains very positive, with some very strong trends continuing to drive the market.

That is the key finding of Colliers International’s 2017 Queenstown property market review and outlook report, released this month.

Download the report at the link below:

Wellington bounces back following earthquake

May 17, 2017

Wellington has bounced back following November 2016 earthquake, according to Colliers’ latest commercial property confidence survey.

Two prime commercial buildings in Wellington – the TradeMe building and Clyde Quay Wharf – are owned by groups of investors represented by Mitchell Mackersy Lawyers and managed by MHP.

Read the DominionPost article here.

MHP Newsletter December 2016

December 7, 2016

As 2016 draws to a close and we wind up an extremely busy 12 months, we are left wondering (again) where the year has gone.

2016 will of course be remembered for the devastating earthquake which has dealt a major blow to towns and rural communities in the South Island, as well as Wellington’s CBD, just six years after the first Christchurch earthquake.

It has also been a year of surprises with Brexit, Trump’s election, John Key’s resignation and the Irish beating the All Blacks thrown in for good measure.

We hope you enjoy reading our final newsletter for 2016 – please get in touch if you have any questions or comments. We would like to wish all our contacts a restorative summer break and a successful year in 2017.

Comments from Ron Mackersy

The commercial property market has continued to strengthen over the course of this year and researchers agree that this expansion is likely to continue over the medium term at least. In this high-demand, low-supply environment, cap rates on top quality properties are now at a premium – near or under 6% in many locations.

With interest rates and margins firming, initial returns around the 6% mark will become the norm. While this is lower than the levels investors have become accustomed to in recent years, it is worth noting that it still represents a solid premium over bank rates.

The keys to achieving strong returns when starting with low yields are long lease terms and built in rental growth. When looking at new investment opportunities, we are encouraging investors to consider where returns are likely to be in three to five years’ time as a result of income growth.

We are looking forward to bringing two significant offerings to the market in the near future: the Hoyts entertainment centre being constructed on a site bordered by Colombo, Tuam and Lichfield Streets in Christchurch CBD; and Steel & Tube’s new facility being built at Glassworks Industry Park in Hornby, Christchurch. Both will have long initial lease terms and rental growth which are essential in the current market environment.

News from Dale Robertson’s desk

One of my key areas of focus recently has been the safety of tenants in our management portfolio in Wellington following the 7.8 magnitude earthquake. My team and I have spent time with tenants inspecting properties and we were pleased to note that the buildings we manage do not appear to have suffered any damage. We are continuing to work with tenants to monitor any issues that may arise following the earthquake.

Here in Christchurch the central city rebuild is gathering pace. Shops are open in the new ANZ Centre and BNZ Centre fronting Cashel St and there is a real buzz in the area in the lead up to Christmas, as well as the announcement of a new central-city farmers market and food precinct (pictured).


The Innovation Precinct is also developing quickly around the new Vodafone and Kathmandu buildings (managed by MHP). More details on the Innovation Precinct are elsewhere in this newsletter.

In October we were pleased to welcome Harvey Norman to its new premises in the former Mitre 10 building which MHP manages at Remarkables Park, Queenstown. A full update on the new store, which has been trading well since opening, is later in this newsletter. We also look forward to welcoming French bakery Ma Boulangerie to the renovated building this month. The French couple running the bakery were profiled in the Mountain Scene recently: read the “France comes to Frankton” article here.

Elsewhere in the South Island we are bedding in several new additions to our management portfolio including:

  • Progressive Engineering’s warehouse in Invercargill
  • Asmuss Steel’s facility at Izone in Rolleston
  • Concision Panelised Technology’s warehouse (also at Izone)
  • the Southern Hospitality showroom just off Manchester St in central Christchurch.


Changes to Civil Defence Amendment Act

Parliament has passed a 2016 Amendment Bill to the Civil Defence Emergency Management Amendment Act. The bill includes new powers to require building owners to undertake damage assessments of buildings in a civil defence event, and to share information with certain parties including local councils and owners & tenants of neighbouring buildings. The bill is available to view here.

MHP would like to reassure shareholders that we have procedures already in place that will be implemented in the event of a Civil Defence emergency. This includes routine building inspections following earthquakes. We also have considerable experience to draw on following the Christchurch earthquakes, to help ensure the safety of our tenants, neighbours and the public should an emergency occur.

MHP Capability Statement

MHP has produced a Capability Statement outlining our key metrics, management services, expertise and a selection of properties under management. An electronic version is available to download below in PDF format, or if you would like a printed copy please email Anita Brosnan:

Click here to download the MHP Capability Statement (PDF).

Harvey Norman opens in Remarkables Park Town Centre, Queenstown

Building work on the former Mitre 10 premises at Remarkables Park is now complete, with Harvey Norman Computer & Electrical open and trading well in their new store.

The store, which opened on October 17, will feature a commercial kitchen display area showcasing high-end commercial appliances available to commercial customers and developers of hotels, apartments, rest home businesses and the like. We understand this commercial kitchen display is one of only three in New Zealand.

In addition to the Harvey Norman tenancy, three additional smaller tenancies were developed within the former Mitre 10 premises. One of the tenancies has been leased to Ma Boulangerie (French bakery) and they are currently undertaking their fit out work. The bakery anticipates trading prior to Christmas. A lease deal is being finalised for Harvey Norman to occupy a further unit for storage, and Colliers International is currently sourcing a tenant for the third unit.

Read more about the store’s opening on the Remarkables Park website.


Harvey Norman’s new Queenstown store at Remarkables Park

Colliers International’s top 10 predictions for 2017

Colliers International has released its top 10 market predictions for 2017. In the report, Colliers researchers look at what will be the major trends and moves across the property sector for next year.

The Top 10 Predictions 2017 report is available to download on the Colliers website

Christchurch Innovation Precinct continues to take shape

The first public outdoor gathering spaces in the Innovation Precinct were completed in October 2016. The area is located directly outside the new Vodafone and Kathmandu buildings (managed by MHP). They are planned to cater for public events such as markets, food stalls and outdoor dining.

The new development behind the restored McKenzie and Willis building facade on High St, opposite the Vodafone building, is also proving popular with tenants. Josh Emmett’s Madam Woo restaurant will open on the ground floor and Telstra is in discussions to take part of the office space vacated by Wynyard.


New Innovation Precinct square, Vodafone building and restored McKenzie & Willis facade

Proposed University of Waikato campus to boost Tauranga CBD

By 2020, the Bay of Plenty will have a new, University-led tertiary campus in the heart of Tauranga city. The site of the proposed development is opposite the new TrustPower headquarters on Durham St, Tauranga – which is part of MHP’s management portfolio. The development is expected to provide a boost to Tauranga’s CBD, which is facing ongoing competition and challenges from several convenience retail centres and malls in and around Tauranga.

Read more about the proposed development on the Bay of Plenty Times website.


An artist’s impression of how the new Tauranga CBD university campus will look

MHP website and LinkedIn page

Throughout 2016 we have boosted our digital presence through our new website and LinkedIn page. We are using both these channels to share the latest updates about MHP, news about tenants in our management portfolio and other relevant links. We’d like to encourage you to follow us on LinkedIn and feel free to comment on the posts and discussions.

Team member profile

Emily Dennison

Emily joined MHP in January 2016. Prior to joining the team she spent six years working for Stride Property Limited in a support role to the Centre Manager at Remarkables Park Town Centre in Queenstown.

Emily’s primary role with MHP is acting as Property and Facilities Manager for Terrace Junction, one of the key properties within MHP’s Queenstown portfolio.