Willis Bond buys former Deka site
31 October 2012.
Source: Fairfax NZ News
A former Terry Serepisos-owned property described as one of the city's most valuable development sites has been sold for about $12 million.
Mark McGuinness, managing director of Willis Bond, confirmed yesterday that he had bought the former Deka property at the bottom of Cuba Mall.
He plans a major redevelopment of the 4000-square-metre block that runs from the north end of Cuba Mall and along Dixon St through to Victoria St, but he has not ruled out demolishing it.
He said the price was confidential, but market sources report it went for about $12m.
That is $5m more than Mr Serepisos paid for it in 2002, but a lot less than he borrowed against it.
Mr McGuinness said that the heritage-listed building was an earthquake risk and needed redevelopment. Plans had not yet been worked out but he expected it would include a mix of shops and offices. ''We may or may not demolish the Deka building," but whatever happened it was important the character of the area was not lost. Only low-level development is allowed at the Cuba St corner but council rules allow for buildings up to 10 storeys or 40 metres towards the Victoria St end of the site. Tenants, including the Wild Pair shoe store, Rodney Wayne hairdressing and the Penny Farthing Cycle store, had a year or more to go on their tenancies and realistically it was going to take 18 to 24 months to work up plans, Mr McGuinness said. "We see it as a great piece of land… it's like buying the worst house in the best street."
The Cuba Mall area had a lot of potential and Willis Bond could be looking at other opportunities in the area, he said. The company has been involved in some of the city's largest new developments in recent years, including Chews Lane and the Clyde Quay redevelopment of the old Overseas Passenger Terminal.
The former Deka property and the neighbouring Farmers department store building were put up for sale earlier this year by receiver David Ruscoe with tenders closing in June. Mr Serepisos paid $7m for the Deka building in 2002 and had plans for an ambitious $60m retail and apartment block. Since his bankruptcy last year with debts of about $200m, many of his properties have been sold on the instruction of mortgagees and receivers. The Farmers/Deka block was owned by Mr Serepisos' Century City Holdings, which owed the Bank of Scotland and South Canterbury Finance $59m, more than twice the block's 2009 rating value of $28m. Colliers International agent Bill Leckie said a number of parties put in bids for the two buildings.
The Farmers building was still under negotiation. It has been assessed as being more valuable than the Deka block, because it is leased to Farmers on a long-term tenancy and returns a net annual income of $1.65m. Mr McGuinness said he did not bid for the Farmers building.