Iwi flipped Wellington’s Dixon Street flats for just over $3 million, less than three weeks after buying the block from Kāinga Ora for almost a third of the price.
Good on the iwi – they made $2 million. Bad on Kainga Ora for being stupid.
Both sale prices were significantly below the property’s market value of $4m and the RV of $18.9m.
So they sold other for one quarter of the market value. Why?
He told OneRoof that when Kāinga Ora first offered the Dixon Street Flats to iwi under the Right of First Refusal (RFR) process in their Treaty settlement, Taranaki Whānui Limited had initially offered to pay a lot less.
“The opening offers they made on the property were low. We negotiated with them to bring the price up. While the $1.04m price we settled on was nearly $3m lower than the market valuation we had obtained, there was no guarantee we would get a higher price if we put the property on the open market, given its challenges and the scale of investment needed.”
Of course there is no guarantee. But you don’t need to be Einstein to work out that if the market value is $4 million, there would be no shortage of companies willing to pay much more than $1 million for it.
A right of first refusal is not a commitment to sell at any price regardless.
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders
4 comments:
Where is the SFO now? Probably still looking at NZF.
Words fail me!
Blatant corruption here. Why did KO not just invite Tenders but give iwi an opportunity to buy at the highest price bid? Facilitating the theft of $2M from taxpayers should land someone in prison for a considerable term.
K O don't care; it's only taxpayer money after all. I can't imagine there wasn't kickbacks involved. Seems very dodgy that the place onsold in three weeks. Obviously collusion between iwi and developer prior to first sale. Maybe the Iwi should be up before the Waitangi Tribunal for defrauding the Crown . Sorry forgot that only works in one direction. It's only not ok if Crown defrauds Maori
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