If anyone has faith in Queenstown, it’s former Southland dairy farmer Les Keeper.
Last year the relatively unknown 50-year-old poured tens of millions of dollars into the Queenstown CBD.
In a single transaction he became one of the resort’s biggest and most influential developers, taking a half-share or more in the CBD’s Steamer Wharf complex, The Mountaineer building bordering Beach, Rees and Shotover Streets, Outside Sports, the 45 Camp St building across the road from The Station, and finally The Junction centre in Gorge Road.
Prior to this large swoop, Keeper’s Queenstown portfolio already included two historic buildings in The Mall and the Tiki Coroner complex across from The Mountaineer on Rees Street.
Not bad for a self-confessed “very conservative” bloke who says: “I’m a lone operator, I prefer farming, I’m not a great networker.”
Till 1999, Keeper’s interests were in the North Island.
Apart from a year in rural banking, which he didn’t like, he farmed.
However, he sold off his farms and resigned from farming boards after a Dairy Board-funded trip “scared the hell out of me”.
Keeper found New Zealand had a battle on its hands to sell dairy products against many other competitors.
“We’d been told we were number one in the world and all of a sudden you realised what a cat fight it is.”
Keeper relocated to Southland, and after he started with sheep, acquired three large dairy farms.
In 2007, he won a $35,000 Nuffield farming scholarship.
Meantime, he’d bought a substantial pad at auction in Queenstown’s Kelvin Heights.
Wanting to learn about commercial real estate, he bought a prime Sydney shop “with a very experienced landlord who taught me all the rigours of leasing”.
A little later, he learnt even more when he bought three Queenstown buildings – spending $13 million to buy the National Bank and Tatler in The Mall and a big sum to acquire Tiki Corner from Irish billionaire Eamon Cleary.
Keeper accepts he paid top dollar but says that was the price of entry.
“I’ve still got burn marks down my back from Eamon – he extracted full value,” Keeper says.
Last year, Keeper was introduced to the Westwood Group Holdings company, spearheaded by local landlords Tony Butson and John Stevenson, who were keen to sell down their weighty CBD portfolio.
“Queenstown was a great place to buy in because prices were 20 to 30 per cent off their peak and we couldn’t get a more prime portfolio,” Keeper says.
His “appetite” increased as he sold his Southland farms, after earlier quitting his Fonterra shares.
Keeper – who put his Tiki Corner building into the joint venture – enjoyed negotiating with Westwood: “Neither party was looking to come in and scalp the other guy, the market had already done that with values.”
However, he threw his cornerstone philosophy about diversifying out the window.
“[But] it’s not a gamble – how often do you get the opportunity to buy such a list of prime assets?
“This is a wonderful asset to have as you’re growing old because you can get professional people to run it, it has a lot of organic growth, and it’s not something that when you get to 70 or 80 you can no longer do like farming or Formula 1 racing.”
The growth of Frankton retail doesn’t worry Keeper.
“The more successful the outskirts of town can be just puts more value on the CBD.”
What might change is the tenant mix, with more high-end-type operators: “You go along the High Street in London and those guys all of a sudden want a presence.”
Keeper retains just one rural holding – a grain and grazing farm on the outskirts of Christchurch.
“I’d go nuts without it,” he says.
Les Keeper on…
“Night flights is a no-brainer. Queenstown is a tourist town – for people that don’t want them, I would really urge them to think about relocating. With that huge Australian market, to not be able to fly in on Friday night for the weekend is criminal.”
“As we see more Asian tourists, that will be a stabilising effect. You don’t see a lot of Asians getting drunk and yahooing, jumping off balconies and running down the street naked.”
“You go to Singapore and Malaysia at night-time, middle of the week, it’s all lit up. You come to Queenstown and there’s not a lot there. Queenstown should be lit up at night like a Christmas tree.”
Outdoor dining’s 10pm curfew:
“Some of the thinking going on in the council is pretty woolly. For Asians, for instance, food is the key to their whole tourist trip and they all eat at all different hours of the night.”
Tough times for CBD traders:
“They are, but you don’t see the tenants looking to move out, and if a tenant does move on, there’s always lots to come in behind, so that speaks for itself.”
“The one thing that would make me the most concerned right at the moment is the east coast of Australia, but the nice thing is the Aussies have priced their own skifields right off the map.”
Out-of-town developers coming a cropper:
“No conservatism, all debt, pie-in-the-sky type of things. My interest bill has to be met. I always like to have a little safety net so if something goes wrong, you’ve got a little bit of a backstop.”