A proposed worker accommodation development at Frankton could meet more than 10% of the expected increase in rental accommodation demand over the next 10 years.
Last July, Mountain Scene revealed the government approved fast-track consenting for Australian-based No.1 Hansen Road Ltd, which plans to build desperately-needed worker accommodation in Queenstown.
Scene understands the Environmental Protection Authority’s (EPA) expected to make a decision in about a month.
No.1 Hansen Rd Sydney-based director Eli Shellim tells Scene they’re keeping their fingers crossed they’ll receive approval.
Subject to that, ‘‘we expect to start construction some time this year’’.
The full application reveals the company plans to construct a total of eight apartment buildings, each between 3 and 6 storeys, on almost 3.5 hectares of land bordering State Highway 6, between the Frankton Cemetery and Hansen Rd.
The buildings, comprising a total of 554 residential units — ranging from hostel-style private rooms with ensuites to three- bedroom apartments — have been designed to reflect an ‘‘alpine village, with a parkland setting’’, the consent application says.
The ground floor of each building would comprise commercial/retail tenancies.
Complex to play “significant role” in easing pressure
In all, the complex — which Auckland-based CMP Construction Ltd estimates will cost $115 million to build, employing about 500 people
— would house up to 710 local workers.
Relief in sight: A total of 710 workers would be accommodated in the 554 residential units
It’s proposed the project will be built in a continuous sequence, but that may change down the track.
According to a report from Arrowtown-based regional economist Benje Patterson, that will start to address the rental housing crisis in the Whakatipu.
He says rental bonds data from the Ministry of Business, Innovation and Employment shows the number of rental houses rose by just nine in the 12 months to May last year, from 4125 to 4134.
‘‘Nine additional tenanted rentals is insufficient to keep up with population growth, with health records published by Infometrics indicating there were at least 2248 new residents in Queenstown-Lakes registered with a primary health provider over the March 2023 year.’’
Last August, Trade Me had just eight rentals listed across the district.
Patterson said demand for rental accommodation from workers is expected to grow strongly over the next decade, and developments like No.1 Hansen Rd can play ‘‘a significant role in helping meet that demand’’.
‘‘Population projections from Queenstown Lakes District Council anticipate that there could be 62,500 people living in Queenstown-Lakes by 2032, which would be an increase of 13,000 people from Statistics New Zealand’s estimate of 49,500 people in June 2022.
‘‘With close to 50% of Queenstown-Lakes residents living in a home they do not own, the 13,000 person population increase over the next decade is likely to mean approximately 6582 extra people will be needing to find beds in rented accommodation by 2032.’’
Additionally, Patterson notes the collective labour supplied by future residents at Hansen Rd will generate about $60m of GDP per
annum in the Queenstown-Lakes’ economy.
‘‘To put things in perspective, the Queenstown-Lakes economy was estimated to generate a total of $391m of GDP in the June 2023 year, meaning that workers living at 1 Hansen Rd could help generate the equivalent of 1.5% of all of Queenstown-Lakes’ current economic
output.’’
He also notes the development’s not likely to put a huge amount of additional strain on the clogged state highway network.
Patterson says complex residents are also likely to make less use of private vehicles, instead using active travel.
The backers
No.1 Hansen Rd Ltd has some heavy-hitting financial backing.
In a supporting letter to the EPA, Multiple Capital Investment Partners (Australia) Pty Ltd (MCIP) partner Simon Tozer confirms they’ve already provided a $27.01mn ‘‘senior construction facility loan’’ to the Australian development company to fund the first stage of construction at the site.
MCIP was established in 2017 to provide tailored debt-funding solutions in the commercial real estate market in New Zealand and Australia.
On this side of the Tasman, it’s provided three loans with an aggregate value of $81m to date.
It’s backed by Sun Hung Kai & Co Ltd, a Hong Kong-listed financial services company with total assets of $HK41.4 billion ($US5.3b) as at June 30 last year.
Funding provided to No.1 Hansen Rd to date has gone to wards construction of the 3-level carpark and subdivision of the site into 14 lots.
‘‘We understand from the borrower that it intends to develop the newly-created lots into approximately 20,000 square metres of staff accommodation that will be able to accommodate over 700 workers,’’ Tozer’s letter says.
‘‘The project will be developed over various stages and will help to address a chronic shortage of affordable accommodation for people employed in the Queenstown tourism industry and broader economy.’’
“MCIP believes there is a strong rationale for the proposed development and is pleased to be working with the borrower on the funding for future stages of the project.”
