In early 2002, leading Auckland based development group McConnell Property Limited (“McConnell”) approached CapitalGroup to consider financing one of New Zealand’s largest residential developments being proposed for South Auckland.
McConnell had spent several years accumulating a large strategic block of land (approximately 74 hectares)
including the Auckland Racing Club’s training facility at Takanini, South Auckland. While the land had
been designated for future residential development, McConnell spent several years seeking a Private
Plan Change for the land to allow large scale development of
the site.
McConnell’s vision for the land
was innovative, involving a comprehensive master planned
community. McConnell engaged international urban design consultants to ensure the development was planned using international best practice. The project had significant front end risk. Firstly, fully master planned housing developments, while common overseas, are unusual in New Zealand – would the buying public understand the concept and buy into Addison? Secondly, Takanini was a lower socio-economic suburb making it extremely difficult to convince the market that higher value product would work.
McConnell were looking for a financier to understand their vision and support this large greenfields master planned development.
CapitalGroup’s experience was a perfect match for the project; key criteria were:
McConnell’s primary resolve was to find a stable and long-term financial partner. They required an organisation that would understand the project goals, and a financier with sufficient capital available to support one of New Zealand’s largest residential developments.
Furthermore, they wanted a financial partner who could add value to the project but would not get involved in unnecessary day to day details.
They also wanted a financier with strong relationships with senior lenders and who could arrange and manage the significant senior debt facilities also required for a project of this size.
CapitalGroup delivered on all these criteria. It has provided a large, long-term, structured facility to the project. It has also arranged and managed a large senior debt facility provided by a leading bank. Furthermore, it has supported the developer in its endeavours and focussed on strategic issues.
The Addison project has established itself as one of the most successful master planned environments in New Zealand. To date, approximately 800 sections have been released to the market making this one of the largest and most successful developments in Auckland