New Zealand's largest private developer, Auckland-based family-owned real estate specialist Mansons TCLM, has made the year's biggest real estate deal so far by leasing, then selling, a partly built city office block for more than $240 million.
The business had bought 155 Fanshawe St, a commercial premises in the Wynyard Quarter opposite Victoria Park in early 2017 for just over $23m. It was sold to an overseas pension fund, and on completion will house Kiwibank's new Auckland headquarters, insurer Southern Cross and co-working space operator Regus.
Last year, the firm had more than $1 billion of work on, of which 155 Fanshawe St was its biggest job. It also settled for $142m the Mercury building in Newmarket, which is now leased to Mercury, Tegel and Avanti Finance, as well as the partial sale of the former NZ Herald site on the corner of Albert and Wyndham Sts. Australian company Pro-Invest Developments intends building a 37-storey hotel on the land, alongside an office building Mansons plans for the rest of the site.
In addition, Mansons has leased two dozen smaller tenancies in retail, small office space and carparks.
Not surprisingly, the company believes the outlook for commercial property is strong, and the demand for blue-chip commercial buildings with long leases to blue-chip tenants has “never been stronger”, it says. It believes there are still many large blue-chip tenants who are keen to move into buildings with a top environmental rating (six green stars), which is now the norm for its commercial buildings.
The company is now so successful its main challenge is simply dealing with its huge construction workload, and the mountain of legal and financial documentation that goes with this. Its monthly accounts are regularly over $15m.
Patriarch Ted Manson, who grew up in a state house, has nevertheless handed over much of the day-to-day running of the company to his sons while he explores a new direction — creating social housing.
His four-year-old philanthropic Manson Foundation has dived in boots and all, building $160m of social housing, including two Glen Eden 10-level projects and an 18-level central city tower. A $60m block in Avondale is a potential project for next year.
The goal is to build more than 300 apartments by 2022 to help those who are struggling and give them a leg up for a better future.
The foundation has also helped to fund new ambulances for St John, and is in the second year of a five-year sponsorship with Auckland City Mission to help it establish new headquarters being built now.
It’s a major sponsor of the Westpac Rescue Helicopter in Auckland, helps fund a youth housing programme in West Auckland, and makes a substantial commitment to the New Zealand Housing Foundation for research and promotion of its 50/50 home ownership scheme.
It has also backed Sir Ray Avery’s first batch of Amigo Bars, intended to help provide essential nutrients for schoolchildren in low decile schools.
According to Ted Manson, the secret to the family’s success is having every aspect of the development process covered, from buying land to finding tenants for its buildings and the final handover of the building to its new owners.
“With the individual skills of all the Manson family directors, along with the specialised skills of all Mansons’ staff, I don’t believe this model will ever be replicated again,” he says. “I’ve never seen it once before in my 45 years in the business.”
2018: $815 million