Two for tea and…

For this development on Mt Wellington, Auckland, I did due diligence, the feaso and was involved in the design and marketing as a development manager.


It’s a live work project with light industrial (warehouse) down below and a 2 beddie apartment up above. Each ‘Duo’ was sold as a package. The initial idea being live above your small business. This concept was exploding north of the harbour bridge -mainly by one developer- but missing elsewhere.

I valued the apartment with comparable sales (plenty of brick and tile units but few apartments anywhere nearby). I ran a rental analysis as well for investors. I got hold of the best small commercial agents in the area to get a cap rate and a commercial rental for the warehouse. No matter how I optimistically ran the numbers and crunched the construction costs the project didn’t stack.

Then my boss had an epiphany -as most big thinking developers do- the punters will pay more for the DUO because they have the option of renting or living above their business and that demands a premium. 1+1=3 so goes the logic.

Anyway, he ended up being right, and with presales the project was bankable and a goer.

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