The New Zealand Property Council has issued a call for the government (taxpayers) to give them money. Why? Because they say, due to the uncertain economic outlook about 60% of all planned (get that; “planned”) construction projects are now at risk. Cancelation they argue, will decimate the construction industry.
Just over a month ago they began this clamour asking the government to “underwrite construction projects of commercial buildings, high-rise apartments, hotels, malls and office blocks”. Note, they’re referring to intended, not started developments.
This is self-serving nonsense. Here’s some interesting background.
The Property Council is part of a world-wide organisation, originally known as BOMA, that is Buildings Owners and Managers Association. About 1990 some institutional building owners, back then mainly Insurance companies, gained consent to start a New Zealand branch. Together with some of the Banks they approached me to be their first President. I demurred but under pressure from a close friend, the late Royce Baigent, who was also on the founding committee, I reluctantly agreed.
Royce, an accountant, was a former President of the Master Builders Association, a deputy mayor, boss of one of our largest construction companies and much more. I was forever teasing him about wanting to move a motion, forming a sub-committee and so on. I prevailed in the end and he dropped all of these activities and became quite a free spirit, sharing offices with me.
Anyway, we duly had the inaugural meeting with me at the head of the table. The then New Zealand AMP commercial property boss, a terribly nice Australian bloke who didn’t have a clue about commercial property, rose and began spouting the most appalling nonsense.
I listened for a couple of minutes and could stand no more. I interrupted the speaker, said I’m terribly sorry but simply have to leave and then fled. Royce, knowing what was upsetting me, quickly stepped in and took over, explaining to the puzzled others present that I wouldn’t be back.
Commercial property has always been notorious world-wide and since the 1920s, for attracting free spirit cavalier types. The New Zealand Property Council puts that history to shame with this bludging overture on specious grounds, specifically to put their hand in your pocket. I’m sure you will find their membership mainly comprise institutions and not the loner doers and shakers who rise and fall with economic cycles, then inevitably re-emerge again.
The next two years will be noted, as always following recessions, for spectacular bankruptcies by building and land developers, plus a lesser number of over-indebted investors. The smart ones, few in number to be sure in this activity, profit hugely from cyclical economic collapses.
But make no mistake, the call from the Property Council is disgraceful and should be ignored by the government.
It’s also ignorant. While some developers may have been caught holding a site they bought for their development and incurred architects fees, they should be grateful that they weren’t already under way.
No-one’s to blame for the virus. In its wake will come a massive depression during which there will be no takers, whether lessees or buyers, for their projects. To want to box on with your money is simply ignorant and a path to ruin. But note it is not they, asking for this, but instead an Association supposedly representing building owners who certainly will not want to see a surplus in supply. You can understand why my company is not a member.