Central city investors head north

17:00, Aug 08 2014

Capital flight from Christchurch continues, with a family group of central city investors spending $84 million on an Auckland office tower.

The investors, operating through Cristo Ltd, are members of the Smith and Bell families who own the partly-demolished former BNZ House and old Press building sites, both in Cathedral Square.

After abandoning $150 million worth of plans to rebuild on the properties with insurance proceeds, they have now bought the 10-storey Chorus House in downtown Auckland.

This week The Press reported that the syndicate of owners from Christchurch's damaged Forsyth Barr House has spent $45.75m of insurance money on a West Auckland shopping mall.

Both groups of owners have had insurance payouts for their office buildings, but are still attempting to sell the sites they are on.

Mark Macauley, head of realtor CBRE, who handled the Chorus House sale, said he could not discuss the deal but it was part of a pattern in Christchurch.


Not all owners losing buildings were equipped or prepared to become developers, which in Christchurch was "a tough environment, not for the faint-hearted."

"Developing is a long process of finding tenants, going through the design and build process, working through costs.

"For those who want to buy something else instead, there aren't the properties to buy in Christchurch".

Most of those owners developing were replacing lost assets so their buildings would not be for sale, Macauley said.

He believed the silver lining was that Canterbury owners opting out were making way for new developers.

He expected some investors taking cash north would reinvest in Christchurch when more buildings were finished.

Auckland has been the main destination for big Christchurch commercial property investors taking their cash elsewhere, while smaller investors have bought into cities including Nelson and Timaru.

Cristo decided in 2012 to replace BNZ House with a 13-storey building, then made an unsuccessful bid to house government departments there, and later tried to sell the property instead.

The investors bought the old Press site after the earthquakes with development plans, before deciding to sell that land too. It is now under contract.

Company spokesman John Smith did not wish to comment on either their Auckland purchase, or progress with selling their Cathedral Square properties. The company has already sold a nearby property on Hereford St, but retains ownership of some other properties in the city including the new Press House.

Other Christchurch commercial landlords who have sold up to invest elsewhere include Miles Middleton, who sold two City Mall properties and bought a central Auckland office tower, rich lister Simon Henry, who put his large Christchurch portfolio up for sale and moved to Auckland, Michael Ogilvie-Lee who sold the Triangle Centre to invest in Wellington and Auckland, and long-standing Christchurch developer Angus McFarlane who sold central city development sites to invest in Texas.

The Press