Wellington developer swims against the tide

Merge Property Group is progressing  three apartment buildings in the capital.

Next week it will launch a marketing campaign for its latest apartment offering with an official launch to be held at the Metropol showroom on the corner of Leeds and Ghuznee Street at on Wednesday.

At the same time, the property development company is finalising construction and funding for two other Wellington development projects – the $46 million, 11-level, 108-apartment Te Aro Towers near the central city, and the proposed $22 million Twelve Daly Street in Lower Hutt.

Director Campbell Venning said the Te Aro Towers and Twelve Daly Street were 98% sold down and he expected to announce the start date of construction in a couple of weeks.

Resource consents for the Metropol tower in the Cuba St area were obtained in August.

Mr Venning said Merge had directly sold more than $7.5 million worth of unconditional pre-sales contracts over the past three months for the mixed use investment units in the building (a twin key configuration allowing for the apartment to be used by one or two tenants or the owner).

He described Metropol as a $60 million venture with $6 million worth of commercial/retail units on the ground, first and second floors, $15 million worth of mixed use investment units, $35 million of owner occupier apartments, and $4 million worth of car parking.

“To help with the economics the building will be built in stages beginning with the retail/commercial block, the car park, and the residential tower,” Mr Venning said.

If all goes to plan Mr Venning expects completion by late 2011.

When asked about how the development was being funded, Mr Venning said the company was mainly funded by private equity.

He is a director and 50% shareholder in Merge Property. The other 50% is held by Jumierah Trust, which is in turn owned half by fellow director Brent Casey. 

Metropol will feature all the latest green-thinking features such as a wind turbine to generate energy for common area lighting, regenerative lifts, solar panelling, sustainable building materials, solar panels, thermal efficient cladding, and a 10th-level rooftop garden. Mr Venning said it will be one of the first of its kind for the apartment sector in the capital, even surpassing the Meridian building on the waterfront, which has set new green standards.

“Because the Council’s current Green Building rating system only applies to offices, we plan to measure Metropol against another international ranking system,” according to Mr Venning.

The development has been designed by ArcHaus Architect. Its lead architect, Huw Parslow said he doesn’t know of any other apartment development with such integrated sustainable features.

Merge recently abandoned plans for $50 million worth of apartments on the Napier waterfront called Boathaus. Merge had been seeking resource consent for apartments, commercial and retail outlets on the former NJ Price Engineering workshop site on the Napier waterfront. But then Merge learned that the resource consent application would have to be publicly notified, and submissions considered, creating delays. Vendor NJ Price Engineering cancelled the contract and is marketing the property for sale.

Meanwhile, Land Equity says it has secured $125 million from a primary funder for its five star Watermark apartment building on the waterfront and says it is finalising contract pricing and mezzanine finance. Land Equity acquired the Wellington Markets building a decade ago where the apartment tower will be built. The adjoining historic John Chambers building will be retained as part of the boutique hotel.