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Market Valuation Development Site – Achilles Avenue Wakatu Square Nelson

Date: 29 August 2013

Client: Nelson City Council

TelferYoung (Nelson) Limited

TelferYoung (Nelson) Limited

Level 3, 105 Trafalgar Street, PO Box 621, Nelson, New Zealand.

Telephone : 03 546 9600, Facsimile : 03 546 9186

email : [email protected] web site : www.telferyoung.com

+ Ian McKeage + Rod Baxendine + Wayne Wootton + Ashley Stevens

Ref: NEL-21771

29 August 2013 Nelson City Council P O Box 645 NELSON 7040 Attention: Alec Louverdis Email: [email protected] Dear Alec

Market Valuation Development Site – Achilles Avenue, Wakatu Square, Nelson In accordance with your email instructions of 27 August 2013, we inspected the above proposed development site on 29 August 2013 for the purpose of assessing the market value for sale. For your convenience we have provided an Executive Summary which precedes our formal valuation report. This statement details the main characteristics of the property and summarises our valuation conclusions. Our Executive Summary must be read in conjunction with the formal valuation report and with TelferYoung (Nelson) Limited’s Statement of Limiting Conditions and Valuation Policy. This report has been prepared for the purpose stated and solely for the benefit of Nelson City Council and may not be used for any other purpose or by any other party without first obtaining our written consent. Yours faithfully TelferYoung (Nelson) Limited

Ian McKeage Registered Valuer, FNZIV, FPINZ Email: [email protected]

TelferYoung Nelson

Table of Contents 1.0 Executive Summary ............................................................................ 1

2.0 Scope of Work .................................................................................. 3

3.0 Legal Description............................................................................... 5

4.0 Location ......................................................................................... 5

5.0 Land .............................................................................................. 6

6.0 Resource Management ........................................................................ 7

7.0 Environmental Issues .......................................................................... 7

8.0 Development Proposal & Valuation Basis .................................................. 9

9.0 Valuation Methodology ........................................................................ 11

10.0 Sales Evidence .................................................................................. 11

11.0 Valuation Methods ............................................................................. 13

12.0 Conditions of Valuation ....................................................................... 15

13.0 Indicative Value As Carpark .................................................................. 15

14.0 Statement of Limiting Conditions and Valuation Policy ................................. 18

Our Ref: NEL-21771 IM:SW Development Site – Achilles Avenue, Wakatu Square, Nelson

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1.0 Executive Summary

Property Address: Achilles Avenue, Wakatu Carpark, Nelson.

Instructions: To assess the market value of the proposed Farmers development site.

Instructing Party: Alec Louverdis.

Client: Nelson City Council.

Date of Inspection: 29 August 2013

Date of Valuation: 29 August 2013

Interest Valued: Part NL12A/408, being Part Lot 3 DP 17892

NL82/102, being Part Lot 29 DP 132

Basis of Valuation: Market Value – as a vacant site with Consents for the proposed development and surrounding carpark development complete, as per the concept outlined in the Statement of Proposal.

Brief Description: The proposed site is to comprise an area of some 3056 m2 in a rectangular configuration forming the central portion of the current Wakatu Carpark. The land has been valued on the basis of Consent being provided for the development as proposed contingently assuming that the surrounding area is developed for carparking, as shown on the MOAI development plans.

Methodology: The market value has been established by:

+ Market Comparison Approach

Valuation: Two Million, Seven Hundred & Fifty Thousand Dollars ($2,750,000) plus GST (if any)

Conditions of Valuation: + Subject to issue of clear freehold title to the proposed allotment shown as Areas B and C on the concept subdivision plans, having a total land area of some 3056 m2.

+ Subject to all necessary reticulated services being provided to the boundary of the site, as would be provided in a normal subdivision.

+ No allowance has been made for the residual value of the existing site improvements – carparking development – as the full site is to be developed.

+ Subject to the carparking being retained and developed on the surrounding frontages and between the subject development and the current Hunters Furniture property to the west in accordance with the concept plans.


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+ No regard has been made of the proposed conditions of sale under which the developer/purchaser would be responsible for the cost of effecting the changes to the surrounding carpark and the development of new carparking on adjoining land, obtaining Consent or effecting the subdivision.

+ The site is noted as being potentially contaminated, however no site investigations have been made. The valuation reflects that a developer would incur costs of site investigations on development. The valuation has been assessed subject to determining that any residual contamination is not at a level that would require remediation and that the site could be used for commercial activities at the paved standard. Accordingly, a nominal allowance has been made for extraction of contaminated materials that may be required to develop foundations for the proposed development. The valuation is therefore subject to expert verification in regard to the level of contamination and the nominal allowances made.

Valuer: Ian McKeage, FNZIV, FPINZ


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2.0 Scope of Work

2.1. The Valuer

The valuation has been undertaken by Ian McKeage who provides this objective and unbiased valuation. Ian has no material connection with the instructing party and has the appropriate qualifications and experience to undertake the valuation.

2.2. Our Client

Nelson City Council. This valuation has been prepared on specific instructions from Alec Louverdis of Nelson City Council for the purpose of market value of the proposed Farmers development site. The report is not to be relied upon by any other person or for any other purpose. We accept no liability to third parties nor do we contemplate that this report will be relied upon by third parties. We invite other parties who may come into possession of this report to seek our written consent to them relying on this report. We reserve the right to withhold our consent or to review the contents of this report in the event that our consent is sought.

2.3. Purpose of Valuation

Market value of the proposed Farmers development site.

2.4. Asset Valued

The land and site improvements contained in ‘Areas B and C’ shown to comprise the development site totalling an area of 3056 m2.

2.5. Basis of Valuation

Market value as if complete. Market value is defined in International Valuation Standards 2011 as: “The estimated amount for which an asset should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties have each acted knowledgeably, prudently and without compulsion”.

2.6. Valuation Date

29 August 2013, being the date of inspection.

2.7. Extent of Investigations

We have carried out a visual inspection of the site. This report has been prepared for valuation purposes only and is not a geotechnical or environmental survey. If any defect is found, including structural defects, this information could impact on the value of the property. No allowances are made in our valuations for any expenses of realisation, or to reflect the balance of any outstanding mortgages either in respect of capital or interest accrued thereon. We have not been provided with an environmental audit of the property. We refer you to the Conditions of Valuation in regard to potential contamination and the provisional allowances made in this valuation.


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We have not conducted a land survey of the subject property and assume all improvements lie within the title boundaries. We have not sighted a current Land Information Memorandum for the subject property during the course of this valuation. Our report is subject to there being no outstanding requisitions or adverse information affecting the property.

2.8. Nature and Source of Information Relied Upon

We have been supplied with the following documentation with your instructions:

+ Aerial plan – potential sale of land for commercial development dated August 2013

+ Council report – potential sale of land for commercial development report 1547583 dated 6 August 2013

+ Statement of proposal – potential sale of land for commercial development dated 6 August 2013

+ Council governance report 1583628 dated 27 August 2013 – potential sale of land for commercial development Wakatu Square

+ Concept design presentation WHL Farmers Development Nelson – MOAI dated 27 July 2013 including prospective elevations, site plan and parking

+ Email advice from Alec Louverdis dated 29 August 2013 in regard to the potential contamination and minimum ground and floor levels relating to the Inundation Overlay and Condition 4.

2.9. Assumptions and Special Assumptions

Special assumptions are detailed in our Conditions of Valuation which outline the scope of the valuation and underlying contingent assumptions. General assumptions are detailed above and in our Statement of Limiting Conditions and Valuation Policies later in the report.

2.10. Reporting Format

We have been instructed to provide a formal valuation report meeting all appropriate standards. This report must be read in conjunction with TelferYoung (Nelson) Limited’s Statement of Limiting Conditions and Valuation Policy.

2.11. Valuation Standards

Our valuation has been prepared in accordance with International Valuation Standards 2011 and Australia and New Zealand Valuation Guidance Notes including:

+ IVS Framework

+ IVS 101 – Scope of Work

+ IVS 102 – Implementation

+ IVS 103 – Reporting

+ IVS 230 - Real Property Interests

+ ANZVGN 1 – Valuation Procedures – Real Property

+ NZRPGN 1 - Valuation of Contaminated Land


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3.0 Legal Description

The land is to be subdivided from two existing titles as follows. + NL12A/408 – Lot 3 Deposited Plan 17892 + NL82/102 – Part Lot 29 Deposited Plan 132

The portions of land are shown on the attached aerial plan comprising Areas B and C. Our valuation has been assessed on the basis that a single clear freehold title will be issued to the proposed site, having a combined area of 3056 m2. Further, that the title will be free from the current Building Line Restrictions.

See Appendix A for copies of the individual Computer Registers.

4.0 Location

Sourced from Google Earth The proposed site is located in Wakatu Square, occupying the majority of the developed carpark between Achilles Avenue and Wakatu Lane. The Wakatu Carpark currently forms one of the three main carpark precincts in central Nelson providing public carparking servicing the central retail area. The prime retail area is located on Trafalgar Street, between Bridge and Hardy Streets, approximately 200 m to the southeast.

Development surrounding the proposed site includes the Strategic Developments two-storey retail and office building on the Trafalgar Street frontage, the Nelson City Council offices on the corner of Halifax and Trafalgar Street, with the former Telecom Exchange, a bulk retail outlet recently redeveloped for Kathmandu and Hunting & Fishing and a medium format retail development housing NOOD and Lighting Plus to the northern side of Achilles Avenue. A range of commercial properties are located along the southern side of Wakatu Carpark


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including the former State Insurance building, several small retail buildings and the Nelson Bus Depot and Nelson Mail. Commercial development west of the proposed site is mixed, including service-commercial and retail showrooms.

Vehicular access to Wakatu Square is currently obtained off Trafalgar Street, Wakatu Lane from Haven Road and the primary access from Achilles Avenue to the northwest. Several pedestrian accessways also service this area, with a principal accessway from Trafalgar Street between the Strategic Developments property and the Nelson City Council.

5.0 Land

Area: 3056 m2 (more or less) – subject to survey.

Frontage: Yet to be determined, but estimated at 96 m to Achilles Avenue and Wakatu Lane by a depth of approximately 32 m.

Shape: Rectangular.

Contour: Broadly level, graded for stormwater drainage.

Services: Stormwater shown to service the site, with water and sewer services in both Wakatu Lane and Achilles Avenue. The valuation has been assessed conditional upon all reticulated services being provided to the boundary of the site.

Site Improvements: The existing site improvements comprise the formed carparking comprising sealed and marked carparking, with pedestrian accessways and a feature brick pedestrian crossing through the centre of the site. Such improvements have some, but limited added value to the potential value of the site from a


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development perspective. In the case of the subject development, the full land is to be occupied and therefore no allowance has been made for any residual value of the existing site improvements. Nor has any regard been made of the proposed conditions of sale under which the developer would be responsible for the cost of effecting changes to the surrounding carparking and development of new carparking on adjoining land.

6.0 Resource Management

Territorial Authority: Nelson City Council.

Plan Status: Operative in part.

Zone: Inner City – Centre.

Zone Description: The Nelson city Plan is an effects based plan providing for a wide range of activities under the Inner City – Centre zone, subject to performance standards. Development of land in the Inner City – Centre zone is permitted to 100% of site coverage without provision for carparking.

Comments:

The District Plan Maps also show the subject and adjoining land to be noted as a Public Carparking Square and Place. Under Rule ICr.27 buildings are not a permitted activity and are a controlled activity if the total gross floor area of all the buildings in the Square does not exceed 200 m2 and the height of any building does not exceed 4.0 m. The valuation has been assessed on the basis that the development as proposed will be approved and therefore, the restrictions placed on Wakatu Square in terms of the controls on building will be overridden by the Consent approval.

The Planning Map Overlays also show the land to be subject to a Flood Hazard Inundation Overlay.

7.0 Environmental Issues

We have not sighted a Land Information Memorandum for the property and therefore our valuation is subject to there being no outstanding requisitions or adverse information affecting the property, other than outlined in this report.

Appended is a copy of the Nelson City Council General Property Information printouts for both portions ‘B’ and ‘C’ of the proposed site, which note the site to be subject to the following conditions:

Site ‘B’ Condition 4 This site is low lying possibly subject to flooding. Floor levels shall be to Nelson City Council requirements.


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Condition 18 Due to the type of use this site has the potential to be contaminated. Refer Potentially Contaminated Site Register. Condition 1403 This property may contain a domestic open fire that falls under the rules set out in the Council’s Air Quality Plan. Under rule AQr.24.1, within the Urban Area, the use of open fires is allowed to continue up until 1 January 2008 (except that any ‘Jetmaster’ type open fire (including Warmington brands) may continue until 1 January 2013). Discharge to air from open fires is prohibited after that date. This is necessary to meet the targets imposed by the National Environmental Standards for air quality. The Air Quality Plan states that within this airshed (Airshed C) no discharge from domestic-type open fires may occur after the cessation date below. Type of heating appliance Disused by Open fires (‘Jetmaster’ type open fires)

01/01/2008 (01/01/2013)

Site ‘C’

Condition 4 This site is low lying possibly subject to flooding. Floor levels shall be to Nelson City Council requirements. Condition 25 This site may have issues relating to the use or storage of Dangerous Goods. Refer to Dangerous Goods Inspector. Condition 1403 This property may contain a domestic open fire that falls under the rules set out in the Council’s Air Quality Plan. Under rule AQr.24.1, within the Urban Area, the use of open fires is allowed to continue up until 1 January 2008 (except that any ‘Jetmaster’ type open fire (including Warmington brands) may continue until 1 January 2013). Discharge to air from open fires is prohibited after that date. This is necessary to meet the targets imposed by the National Environmental Standards for air quality. The Air Quality Plan states that within this airshed (Airshed C) no discharge from domestic-type open fires may occur after the cessation date below. Type of heating appliance Disused by Open fires (‘Jetmaster’ type open fires)

01/01/2008 (01/01/2013)

Condition 4, relating to inundation and the Inundation Overlay under Rule ICr.59 relates to low lying ground susceptible to localised stormwater ponding or tidal inundation, provides that the erection of any building or extension of the ground floor of an existing building by more than 20% or earthworks are controlled activities. Nelson City Council staff advise that the minimum finished ground level and floor levels are 15.35 m and 15.5 m respectively, on the Nelson City Council datum. Further, that existing ground levels in this area are around 15.0 m and all new developments (NOOD and Kathmandu etc) comply with the minimum floor level requirements. Therefore, some filling of the site would be required to achieve minimum ground levels and minimum floor levels on development.

Condition 18 relates to potential contamination. Nelson City Council staff advise that all the land between Achilles Avenue and Wakatu Lane from Trafalgar to Rutherford Street used to be an automotive precinct (garages, service stations, car dismantlers etc), and the types of activities involved mean the land is subject to the Hazardous Activities & Industries List (HAIL) as well. As the land is subject to HAIL any change of use, soil disturbance or subdivision triggers assessment. Further, that there have been no environmental assessments of the potential contamination on the site and therefore, whether actual contamination exists and whether remediation is required is unknown and will not be known by the Council or


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purchaser at the point of sale. We understand the National Assessment Standards will therefore require site investigations to be undertaken at the time of development. In assessing the market value of the site our valuation is contingent upon the following condition.


Condition 25 relates to the prior use of the land and is understood to be no longer relevant.

Condition 1403 relates to domestic heating and therefore is also not considered to be relevant to the valuation.

The General Property Information printout for the part site shown as ‘B’ notes a Resource Consent was obtained in 1997 to utilise the land for public carparking.

8.0 Development Proposal & Valuation Basis

The valuation has been based upon the subdivision and development proposal supplied with your instructions and in particular, the following information.

+ Items 2.1 – 2.5 of the Statement of Proposal dated 6 August 2013 namely, -


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+ The land plan referred to as Attachment 2 and the Concept Plans referred to as

Attached 1 in the Statement of Proposal are appended to the report in Appendix C.

Copied below is an outline of the footprint of the proposed development on the subject site and the adjoining reconfiguration of access and provision of carparking in Achilles Avenue and the adjoining land to the west.

In summary, our valuation has been undertaken on the basis that –

+ The development will be Consented in accordance with the concept plans. + The site will comprise a separate 3056 m2 title with all services to the boundary. + The surrounding access will be reconfigured and carparking developed in accordance

with the proposed plan including that on the land between the subject development site and the Hunters Furniture site fronting Rutherford Street. Such carparking will remain as public carparking, including the provision for a loading bay adjacent to the western side of the development site.

+ Regard has been made to the notation for potential contamination on the site subject to the Conditions of Valuation contained earlier in the report.

+ No account has been made for the conditions of sale in regard to contributions to offsite development or effecting Consents and subdivision.


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9.0 Valuation Methodology

The market value of the property has been established using a market comparison approach. The market comparison approach considers sales of vacant land or underdeveloped properties in order to establish a land value which is then analysed to a ratio relative to area, or frontage and depth, and applied to the subject property.

10.0 Sales Evidence

Sales of commercial land in the central commercial core and fronting the ringroads of Rutherford, Halifax and Collingwood Streets and Selwyn Place have been researched. These are scheduled below and include large development site sales over the last six to seven years, and smaller site sales recorded over the last three years in this area.

Nelson Commercial Land Sales

(LSP –Land Sale price)

Address Date Sale Price LSP Area

(m2)

Overall LSP/m2

Zone Comments

220 Hardy St 03/06 $6,050,000 $5,550,000 5807 $960 IC- C Former Mitre 10 - sold partially tenanted site split by Morrison St. Morrison St land 863 m2.

130 Collingwood St

07/06 $2,600,000 $2,200,000 2523 $872 IC- C Former BJ's Gym. Highly developed site corner Selwyn and Collingwood St.

135 Rutherford St

05/07 $4,000,000 $3,500,000 3662 $950 IC -F Former Nelson Bays Holden. Purchased by adjoining owner. Remnant bldg with potential for bulk retail conversion. Three street frontages.

105 -111 Collingwood St

02/08 $2,300,000 $2,000,000 2277 $878 IC -F Shone & Shirley sold with partial tenancy. Three titles. Funeral home and three dwellings & flat. Corner site with rear access.

53 Halifax St 05/10 $774,000 $616,000 770 $800 IC - F Character pre-war bungalow on ringroad commercial site. Potential for zone change under Heart of Nelson Strategy.

89 Collingwood St

07/10 $450,000 $435,000 508 $856 IC – F Vacant site adjoining Wakatu Hotel with office development proposal. Narrow site with rear access from Harley Street.

81-101 Achilles Ave

02/11 $3,160,000 2,100,000 2176 $965 IC – C Three adjoining properties, Hunters Furniture, Hunting & Fishing and a carparking lot. Three titles totalling 2176 m2.


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Good frontage and exposure to Rutherford Street, Achilles Avenue and Wakatu Lane. Strategic purchase by NCC.

18 Montgomery Sq

-/11 $295,000 $235,000 297 $774 IC – C Old warehouse purchased by adjoining owner for Rebel Sport development. Narrow frontage to Montgomery Square.

23 Wakatu Ln 09/11 $240,000 $210,000 130 $1,615 IC - C Small site of narrow 6.1 m wide frontage with small relocatable building at sale. Demonstrates small parcel premium.

137 Bridge St 03/12 $425,000 $415,000 607 $684 IC – C Former Phat Club site. Building in poor condition and of limited added value. Eastern portion of the site subject to right-of-way reducing effective area to 493 m2.

94 Selwyn Pl 04/12 $458,000 $418,000 431 $970 IC – F MATZ Architects site comprising old dwelling converted for office space of circa 110 m2 of site with potential for redevelopment.

89 Collingwood St

05/13 $425,000 $422,000 508 $810 IC – F Vacant site with part concrete surface used for carparking adjacent to Wakatu Hotel. Rear access from Harley Street.

We have also considered commercial sales in the Inner City – Fringe area west of Rutherford Street, including the following recent sales. Address Date Sale Price LSP Area

(m2)

Overall LSP/m2

Zone Comments

19 Haven Rd 03/07 $950,000 $950,000 1640 $580 IC -F Former Lost Breed MC club, now redeveloped for Ministry of Education offices.

1 St Vincent St 08/12 $561,000 $525,000 860 $610 IC – F Globe Hotel site on corner of Haven Road and St Vincent Street sold to Nelson City Council to effect road widening. Improvements on the property affected by fire damage.

24 Vanguard St

11/12 $610,000 $610,000 852 $716 IC-F Ex-Nelson Equipment Centre. Purchased by adjoining owner for expansion purposes.


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2/4 Vanguard St

08/13 $925,000 $775,000 873 $890 IC-F Developed car yard site on corner of Vanguard Street and Haven Road. Elevated site sealed with office and workshop building.

In applying the land sales evidence and analysis to the valuation of the subject property adjustments are required for premiums such as adjoining owner, or strategic purchases and variations in the zone, site dimensions and characteristics, land area and location.

Notably the schedule includes the purchase of the three properties west of Wakatu Square running through to Rutherford Street. The properties were a strategic purchase by Council. Deducting for the value of existing improvements provides an indicated land sale price equating to $965 /m2 over the 2176 m2 and a land value of circa $1,000 - $1,100 /m2 for the land parcel fronting Rutherford Street and $850 - $900 /m2 for the two land parcels fronting Achilles Avenue. This analysis includes any premium for the strategic purchase.

The key sales, albeit now somewhat dated, comprise the larger parcel sales. The former Mitre 10 site, now Fashion Island, analyses to an average land sale price of $960 /m2 for the 5807 m2 and has the benefit of main retail street frontage to Hardy Street but with additional frontage to Morrison Street and rear frontage to Selwyn Place. The site is seen as being the most comparable to the subject in terms of retail potential, apart from the greater retail exposure.

The sale of the former BJ’s Gym site at 130 Collingwood Street indicates an overall land sale price of $872 /m2 for a 2523 m2 site. The site has the benefit of wide frontage and corner profile to Selwyn Place. It is considered to have inferior retail potential to the subject site.

Both the former BJ’s Gym site and former Mitre 10 site are zoned Inner City – Centre not requiring the provision of onsite carparking.

The sale at 135 Rutherford Street, comprising the former Firestone property, was purchased by an adjoining owner. Making allowance for this factor reduces the analysed land sale price to circa $850 /m2 for a 3662 m2 site with wide frontage to the main arterial route of Rutherford Street and exposure to two corners. The former Shone & Shirley site at 105 Collingwood Street again has the benefit of wide frontage to Collingwood Street and also corner profile to St John Lane and a rear service access. The site also comprised three titles. The indicated land sale price being $878 /m2 for 2277 m2.

Adjusting the above four sales for site characteristics such as corner profile, excess frontage and rear access provides an indicated land value for a standardised site ranging from $671 /m2 to $735 /m2 before adjustments for size and location.

The remaining smaller site sales within the central core and ringroad area show a range of land value from $760 /m2 to $970 /m2, again to a standardised site excluding premiums for corner influence, excess frontage and access.

11.0 Valuation Methods

11.1. Market Comparison

The sales have been analysed to provide a basis of a land value application on a depth table approach and on an area basis. The depth table approach analyses the residual land value to a unit metre frontage after allowing for the depth of the site. The residual analysis is after adjustment for other factors including the likes of corner influence and rear access. The area approach applies a base land value to which adjustments are made for the factors relevant to


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the subject property such as frontage, access and corner influence. On this basis, the market comparison approach is applied as follows.

11.2. Unit metre frontage

Area 3056 m2 Frontage - estimated 96 m Depth – estimated 31.8 m Depth percentage Sommers Cleveland 101.8% Frontage & access +17.5% ______ Sommers Cleveland factor 114.83 Street unit - UMF $26,250 __________ Land value $3,014,000 Less size adjustment -10% ________ Indicated land value $2,713,000 Less nominal allowance for contamination -$50,000 _________ Indicated market value $2,663,000 11.3. Area Approach

Base land value $725 /m2 Adjustment for frontage, rear & side access +27.5% Indicated land value /m2 $924 Land area 3056 m2 _________ Indicated land value $2,825,000 Less nominal allowance for contamination -$50,000 __________ Indicated market value $2,775,000

The two above approaches provide an indicated value range of $2,663,000 to $2,775,000. Prior to the adjustment for the potential contamination, the analysed land value under the area approach of $924 /m2 is slightly above the analysed land sale price for the four key comparisons, apart from the former Mitre 10 – Fashion Island site at $960 /m2. Having regard to the foregoing analysis we accordingly adopt the market value for the development site subject to the Conditions of Valuation as follows. Market Value As Development Site $2,750,000 The above value is assessed plus GST (if any).


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12.0 Conditions of Valuation

+ Subject to issue of clear freehold title to the proposed allotment shown as Areas B and C on the concept subdivision plans, having a total land area of some 3056 m2.

+ Subject to all necessary reticulated services being provided to the boundary of the site, as would be provided in a normal subdivision.

+ No allowance has been made for the residual value of the existing site improvements – carparking development – as the full site is to be developed.

+ Subject to the carparking being retained and developed on the surrounding frontages and between the subject development and the current Hunters Furniture property to the west in accordance with the concept plans.

+ No regard has been made of the proposed conditions of sale under which the developer/purchaser would be responsible for the cost of effecting the changes to the surrounding carpark and the development of new carparking on adjoining land, obtaining Consent or effecting the subdivision.


13.0 Indicative Value As Carpark

Subsequent to your initial instructions, you have requested that we provide an assessment of the value of the proposed site as a carpark, as opposed to the site for commercial development. As there is no market evidence of the value of land constrained for carparking it has been necessary to model the value from potential returns and capitalise the returns to provide an indicated value. The value as carpark has been assessed under the basis of the existing zoning as Inner City – Fringe but also taking into account the restrictions imposed under Rule ICr.27 restricting buildings to an area of 200 m2 and 4.0 m in height. The Rule in relation to buildings primarily being to provide for amenity facilities. The valuation as a carpark has been explicitly assessed therefore on the following basis. + The land is restricted to use for carparking only and no cognisance has been made of

the potential for other development. + The existing carpark development has been recognised providing approximately 90

formed carparks on the proposed 3056 m2 site. + The value as a carpark has been assessed having regard to current revenues from the

Council carpark operation, together with potential revenues from private carparking.


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Council revenues and direct expenses, relating to ticketing machine operation and maintenance are as follows. Year Revenue Direct Expense Net Revenue

2010/2011 $111,920 $5,784 $106,136 2011/2012 $139,501 $5,226 $134,275 2012/2013 $144,455 $6,065 $138,390 The expenditure is prior to consideration of other expenses such as electricity, maintenance, management and administration. The revenue relates to the total 169 carparks in Wakatu Square and therefore the relative portion to the subject 90 carparks of some 53% indicates a revenue stream after ticketing machine expenses of some $71,000 - $74,000 pa.

The alternative has been to consider the potential revenues and returns from private longterm carparking. The site provides 90 carparks in its current configuration. Optimising for private parking may provide potential for further carparks in the areas occupied by the pedestrian accessway from Wakatu Lane to Achilles Avenue and within part of the carriageway currently occupying area ‘C’. Further potential exists for parallel carparking along the southern bounds of the site and therefore, we have made an allowance for a potential total of 118 carparks. Within the time constraints of providing the valuation it has not been possible for us to test the potential demand and we note that there is currently longterm carparking in this area and further carparking in New Street, but not on this scale. In order to provide an indicative value for carparking it has therefore been necessary to assume that there would be sufficient demand for longterm carparking however we have made provision for vacancies.

The potential revenues have been assessed following analysis of recent longterm carparking rentals and a broad estimate of operating expenses, together with an allowance for management and vacancies, has been imputed to provide an indicative net return.

The resulting net potential income has then been apportioned to a return to the site development as carparking to provide a residual to the land. These returns have then been capitalised at appropriate yields to provide an indicated market value as carparking. The assessment is as follows.

Revenue assessment - Optimised potential carparks 118 Weekly rent including bulk leasing discount $26 _______ Gross income $159,536 Less expenses - Rates -$29,300 - Maintenance, power, insurance & marketing (estimate) -$6,000 - Management 10% -$16,000 - Vacancy 5% -$8,000 ________ Net potential income $100,236 Adopt net potential income $100,000


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Apportionment of income and capitalisation - Net potential income $100,000 Return to site development Carpark development – replacement cost $244,000 Less depreciation -$61,000 ________ Indicated value of improvements $183,000 Return to improvements 11% ________ Apportionment of return to improvements -$20,100 ________ Residual return to land $79,900 Return yield 6.25% __________ Indicated underlying land value as carparking $1,278,000

Therefore, the indicated market value as carparking is summarised as follows.

Land Value $1,280,000 Site Development $180,000 __________ Indicated Value As Carparking $1,460,000 The indicated value as carparking has been assessed plus GST (if any).


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14.0 Statement of Limiting Conditions and Valuation Policy

Purpose

This valuation report has been completed for the specific purpose stated. No responsibility is accepted in the event that this report is used for any other purpose.

Responsibility to Third Party

Our responsibility in connection with this valuation is limited to the client to whom the report is addressed and to that

client only. We disclaim all responsibility and will accept no liability to any other party without first obtaining the written consent of TelferYoung (Nelson) Limited and the author of the report. TelferYoung (Nelson) Limited reserves the

right to alter, amend, explain or limit any further information given to any other party.

Reproduction of Report

Neither the whole nor any part of this valuation and report or any reference to it may be included in any published

document, circular or statement without first obtaining our written approval of the form and context in which it may appear. Our report is only valid when bearing the Valuer’s original signature.

Date of Valuation

Unless otherwise stated, the effective date of the valuation is the date of the inspection of the property. This valuation

is current as at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a

relatively short period (including as a result of general market movements or factors specific to the particular property). We do not accept liability for losses arising from such subsequent changes in value.

Without limiting the generality of the above comment, we do not assume any responsibility or accept any liability where this valuation is relied upon after the expiration of 3 months from the date of the valuation, or such earlier date if you

become aware of any factors that have any effect on the valuation.

Legislation

We have not obtained a Land Information Memorandum (LIM) or Property Information Memorandum (PIM) for this

property which, unless otherwise stated, is assumed to conform to all requirements of the Resource Management Act 1991, the New Zealand Building Code contained in the First Schedule to the Building Regulations 1992, the Building Act

1991, the Building Act 2004 and any Historic Places Trust registration. Our valuation reports are prepared on the basis

that properties comply with all relevant legislation and regulations and that there is no adverse or beneficial information recorded on the Territorial Local Authority (TLA) property file, unless otherwise stated. Legislation that may be of

importance in this regard includes the Health & Safety in Employment Act 1992, the Fire Safety and Evacuation of

Buildings Regulation 1992, and the Disabled Persons Community Welfare Act 1975.

Registrations

Unless otherwise stated, our valuation is subject to there being no detrimental or beneficial registrations affecting the value of the property other than those appearing on the title. Such registrations may include WaahiTapu and Historic

Places Trust registrations.

Reliability of Data

The data and statistical information contained herein was gathered for valuation purposes from reliable sources and

is believed to be correct. All reasonable attempts have been made to verify the authenticity of this information but we cannot guarantee its accuracy.

Assumptions

This report contains assumptions believed to be fair and reasonable at the date of valuation. In the event that

assumptions are made, based on information relied upon which is later proven to be incorrect, or known by the

recipient to be incorrect at the date of reporting, TelferYoung (Nelson) Limited reserves the right to reconsider the report, and if necessary, reassess values.

GST

When analysing the sales and/or leasing evidence relied upon for this valuation, it is noted that we have attempted

to ascertain whether or not the sale price/rental is inclusive or exclusive of Goods and Services Tax (GST). The national property database of sales evidence does not always identify whether or not the sale price is inclusive or

exclusive of GST. Where we have not been able to verify the matter of GST, we have assumed that the national

property database record of sale price is inclusive of GST (if any) for residential properties and plus GST (if any) for

non-residential properties. Should this not be the case for any particular sale or rental used as evidence, we reserve the right to reconsider our valuation.


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Land Survey

We have made no survey of the subject property and assume no responsibility in connection with these matters. Unless otherwise stated, it is assumed all improvements lie within the title boundaries.

Unless otherwise stated, we have not undertaken investigations or been supplied with geotechnical reports with respect

to the nature of the underlying land. Unless otherwise stated, we have assumed the land to be firm and suitable ground for the existing and/or potential development, without the need for additional and expensive foundation and retaining

work or drainage systems.

Yours faithfully TelferYoung (Nelson) Limited

Ian McKeage Registered Valuer, FNZIV, FPINZ Email: [email protected]

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