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  1. #61
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    Quote Originally Posted by JBmurc View Post
    yes correct -http://chalmersproperties.co.nz/portfolio/dunedin/

    something wrong with them ?? looks like they own the vast bulk of the commercial land close to CBD/PORT
    of course they will continue to lift lease of the land reviewed every 7 yrs
    They will and have been quite harsh at times. However I genuinely wish you luck. Be aware that value will rise and fall largely related to proximity of next rent review. Tenants will pay rental based on same per square metre rate as freehold, meaning that when ground rent rises they may be paying too much and therefore your next rental review might be disappointing. It depends a bit when review dates fall. The other downside is if you want to sell you will find a smaller pool of buyers. Some investors simply will not consider leasehold purchases and lenders used to limit mortgages, although that may have changed a bit. . I have owned a couple of these back in Port Otago days, and have been involved in leasing and managing others as well as DCC and Otago Foundation trust leasehold. These days I would not touch leasehold at all unless it was a 21 year term with no reviews and in the first year or so of the new term, and even then - probably not. There aren't many of these left, most having taken up the bait when 7 year ground review were offered at lower initial rents; a few years ago most were 21 year reviews. That's just me though, and others will have different ideas.
    Yes, they do own the bulk of land east of CBD. Remember most of that land was reclaimed from original harbour. There is a plaque outside the John Wickliffe house in the exchange marking where the first settlors' ships landed.
    It has often been cited as a reason for Dunedin's slow progress in industrial development as little freehold land with industrial zoning was available, although I have my doubts that that is the sole reason; even though I have met many industrialists, developers, and tenants who are not interested in leasehold. However it doesn't seem to have been as much of a problem in Wellington which has a lot of leased land.
    Best of British.

  2. #62
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    Quote Originally Posted by fungus pudding View Post
    They will and have been quite harsh at times. However I genuinely wish you luck. Be aware that value will rise and fall largely related to proximity of next rent review. Tenants will pay rental based on same per square metre rate as freehold, meaning that when ground rent rises they may be paying too much and therefore your next rental review might be disappointing. It depends a bit when review dates fall. The other downside is if you want to sell you will find a smaller pool of buyers. Some investors simply will not consider leasehold purchases and lenders used to limit mortgages, although that may have changed a bit. . I have owned a couple of these back in Port Otago days, and have been involved in leasing and managing others as well as DCC and Otago Foundation trust leasehold. These days I would not touch leasehold at all unless it was a 21 year term with no reviews and in the first year or so of the new term, and even then - probably not. There aren't many of these left, most having taken up the bait when 7 year ground review were offered at lower initial rents; a few years ago most were 21 year reviews. That's just me though, and others will have different ideas.
    Yes, they do own the bulk of land east of CBD. Remember most of that land was reclaimed from original harbour. There is a plaque outside the John Wickliffe house in the exchange marking where the first settlors' ships landed.
    It has often been cited as a reason for Dunedin's slow progress in industrial development as little freehold land with industrial zoning was available, although I have my doubts that that is the sole reason; even though I have met many industrialists, developers, and tenants who are not interested in leasehold. However it doesn't seem to have been as much of a problem in Wellington which has a lot of leased land.
    Best of British.
    Yeah thanks for that... so much to go over ....so hard to find a good investment in property at the moment(only looking at southland / Otago) ....trying to get a decent NBS 67% + or no bank will lend the fund or get insurance ....and with pretty much 80% of all the commercial property I'm coming across(with decent yield) is below this amount it was good to finally find one that was above and was in a great location all costs taken care of ... 6% nett income after AISC (0% deposit,4.5% interest rate)

    Right got some docs on the lease dunedin property ...looks like a ground lease of 21yrs started in 2011..but reviews been changed to 7yrs like you were saying .. didn't seem like a lot of money at the RV of the land only round 5% but of course this could change ....but surely with hundreds of businesses on these lease lands they could just ramp up rates to much ???

    Building/improvement value is just higher than asking price
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  3. #63
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    Quote Originally Posted by JBmurc View Post
    Yeah thanks for that... so much to go over ....so hard to find a good investment in property at the moment(only looking at southland / Otago) ....trying to get a decent NBS 67% + or no bank will lend the fund or get insurance ....and with pretty much 80% of all the commercial property I'm coming across(with decent yield) is below this amount it was good to finally find one that was above and was in a great location all costs taken care of ... 6% nett income after AISC (0% deposit,4.5% interest rate)

    Right got some docs on the lease dunedin property ...looks like a ground lease of 21yrs started in 2011..but reviews been changed to 7yrs like you were saying .. didn't seem like a lot of money at the RV of the land only round 5% but of course this could change ....but surely with hundreds of businesses on these lease lands they could just ramp up rates to much ???

    Building/improvement value is just higher than asking price
    There have been a few battles over ground lease reviews over the last few years. Talk to your valuer and get an idea of where the current rent on that property sits compared to other similarly zones properties in area.
    Improvement value being just higher than asking price indicates your interest in ground lease is of low value and lessors' is high. IOW if the ground lease was $ 1 per annum for next hundred years improvement value would be the same, but asking price would be through the roof. (Lessors' interest in land would be low and lessees' would be high) So price just over improvement value does not necessarily make it a bargain. I have seen some that cannot achieve improvement value. Like I said before, it can depend on how tenants' rent reviews and ground rent reviews align. (N.B I'm not criticising the deal - just pointing out what to consider)
    You are right that it's hard to find a good investment. I don't bother looking anymore. My personal circumstances mean LPTs are far better for me.

  4. #64
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    yes LPT would be a far safer investment but can't see the bank loaning me all that much to buy them ...going keep looking over Dunedin way ...think its a better bet than Invercargill (larger population 120k vs 50k) ...of course got the smaller rural towns ,,,but so much risk ...
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  5. #65
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    Quote Originally Posted by JBmurc View Post
    yes LPT would be a far safer investment but can't see the bank loaning me all that much to buy them ...going keep looking over Dunedin way ...think its a better bet than Invercargill (larger population 120k vs 50k) ...of course got the smaller rural towns ,,,but so much risk ...
    I know exactly what you mean, yet the most hassle free property I have ever owned is in Gore.

  6. #66
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    Quote Originally Posted by fungus pudding View Post
    I know exactly what you mean, yet the most hassle free property I have ever owned is in Gore.
    right yes have spotted a few there ...my wife comes from Gore ....
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  7. #67
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    In checking the REA.nz search engine and there is some 800+ commercial property listings avaiable in dunedin(leases+land+buildings) ....thats a right scare off ,,right there ..
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  8. #68
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    Quote Originally Posted by JBmurc View Post
    In checking the REA.nz search engine and there is some 800+ commercial property listings avaiable in dunedin(leases+land+buildings) ....thats a right scare off ,,right there ..
    Just had a look at that site. It's horribly disorganised. There are some residential properties and businesses thrown in, but mainly leases, many of which seem to be spaces in office buildings etc.
    Hopeless site to wade through looking for anything actually for sale. Anyway- I hope you're as pleased with your Gore deal as I am with mine, and that it's equally trouble free. .

  9. #69
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    Yes mostly trouble free
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  10. #70
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    many of the PGG Wrightson properties up for sale in the deep south 6yr fixed lease 5+5 rights

    ticks most of my boxes .....what you reckon F.P ??

    http://www.trademe.co.nz/property/co...1080115099.htm
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

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