World Investor NZ

SIX WAYS TO FRANCHISE A FORTUNE
Issue 222 October 2013 $8.95
LUXURY & ADVENTURE CRUISES HOW TO CASH IN ON COMMERCIAL PROPERTY

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WorldInvestorNZ.com September 2013
BOB JONES
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World INVESTOR September 2013
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FEATURES
5 10 20 30 40 56 Cover Story- Sir Bob Jones King Comm- making money from commercial property Franchising- How to grab part of a $20b industry Historic luxury property Luxury and adventure cruises Investing in Wine
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REGULARS
3 15 18 26 38 46 52 54 62 66 Whats New David McEwen Michael Coote Stock Market Report Investing in Business- Derek Handley Arts and Antiques- leasing art Company Profile- Vaione Gin Wine with Timothy Giles KPMG Watches and Jewellery
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27 Share Talk
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INVESTOR
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INVESTOR
Editor: Darren Greenwood editor@acornpublishing.biz Subscriptions: Call: +64 9 375 6057 Publisher: Acorn Publishing Ltd Art director: Danny Rawlins Contributors: Tom Thomson, David McEwen, Michael Coote, Hone Churchill, Timothy Giles, Sophie McEwen. Advertising: Chris McPhee cmcphee@acornpublishing.biz Call: +64 9 375 6057 Printing: Blueprint Media Ltd (03) 348 0538 ISSN: 2324-2019 Registered Publication Information: For information and correspondence regarding this publication contact: Acorn Publishing Ltd Level 1/56 Brown Street, Ponsonby, Auckland 1021 PO Box 46 290, Herne Bay, Auckland, New Zealand Call: +64 9 375 6057 Email: info@acornpublishing.biz
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Introduction
Investment Risks and Suitability. Published material and advertisements are not intended as personal investment advice or recommendations of suitability to any particular person. Articles and advertisements may include reference to investments which have varying levels of risk and return from speculative and risky to very low risk. It is the responsibility of the reader to assess suitability of any investment advertised or referred to having regard to their own objectives, particular circumstances and investment portfolio. Investors should also read the investment statement and/or prospectus or Product Disclosure Statement (PDS) for any investment which by law requires publication of such documents and satisfy themselves that investments referred to are appropriate for their circumstances and portfolio. Disclaimer: While Acorn has endeavoured to ensure that the material in this publication is free from error, Acorn makes no representation or warranty of any kind for the accuracy, reliability, suitability, currency or completeness of the information, and is under no obligation to update or correct any errors in the information after the date of publication. Past performance is not necessarily an indication of future returns. Acorn and its directors, employees and associates do not accept any liability arising in any way (including by reason of negligence) for errors in, or omissions from, the information and do not accept any loss or damage (including, without limitation, loss of profits, business or data), however caused, which arise out of, or result from any reliance on, or inability to use all access, any information on the website or any other website which is linked to this website. Intellectual property: Acorn, excepting external information suppliers who have expressly retained copyright, owns all copyright and other intellectual property rights in the information contained in this magazine. All rights are reserved. No part of this magazine may be reproduced or adapted in whole or in part without the prior consent of Acorn. Class Advice: All information provided by this publication and its associated website is deemed to be Class Advice under the terms of the Financial Advisers Act 2008. It is not personalised for anyones financial situation or goals. If you require such advice, you should contact an Authorised Financial Adviser. A disclosure statement is available free of charge upon request.
Theres nothing like a person with strong opinions- at least you know where you stand with them. Sir Bob Jones is such a figure, and love him or loathe him, you cannot ignore what he says. Its not only a matter of what he says about New Zealand needing to run itself properly and generate wealth, but also how investors can also generate wealth. Since the 2013 National Business Review Rich List estimates Sir Bob as being worth $550 million, wealth creation is something he so obviously knows much about, so we should take heed at what he says. Sir Bob made his fortune in commercial property investment, so this months issue takes a look at how it is done and what are the opportunities there. It appears New Zealand offers some of the best returns in the world from investment in commercial property so this kind of investment certainly looks like something to consider. Another thing in which New Zealand is a leader is franchising, so to tie in with a major franchising expo in Auckland this month, we look at the opportunities presented by franchising and how some well-known franchises like BurgerFuel and Rodney Wayne make their bucks. Technology entrepreneur Derek Handley also shares a few secrets of his success, too. And if you have plenty of bucks, why not enjoy the trip of a lifetime with an expensive cruise? This months issue takes a look at the cruise market and its not just a matter of finding luxury, but also adventure, with some increasingly exciting and innovative destinations on offer- and modern comforts can still be enjoyed. Indeed, what can be better than sitting on a cruise liner with a drink at hand, so Tom Thomson has found a few top tipples made in New Zealand, for you to enjoy at home and overseas. We have Pacific-style gin from Auckland and a rum from Waiheke, made by a descendent of a real-life pirate. Both are lovely drinks too, so dont forget to enter our competitions to win a bottle. These profiles add to our regular wine column from the esteemed Timothy Giles, plus a feature on investing in wine. There will be some more top tipples from Tom Thomson next month, who has scoured the land to discover more quality Kiwi-made creations for the drinks cabinet. So as well as wishing our readers good fortune, I will also add, bottoms up!
Darren Greenwood Editor
Whats New
Whats new?
Online advisers database
Auckland lawyer and former financial adviser Miles HaywardRyan is calling for investors to help him create a database to compare the performance of investment advisers. and Canterbury still have average values below their 2007 peak.
Meridian bonanza tipped

Analysts say the soon-to-be-floated Meridian Energy could deliver a healthy net dividend yield of up to 6.8 per cent. Deutche Bank/ Craigs Investment Partners and Goldman Sachs have released analysis ahead of a marketing drive by their investment banking arms. Craigs Investment Partners values Meridian at $4.03b-$4.65b with a net dividend yield of 6.2-6.5 per cent and Goldman Sachs values the power company at $3.8b-$4.7b, with a net dividend yield of 5.55-6.83 per cent. However, Craigs Investment Partners warns a Labour-Greens government would slash the value of the company to $2.89b-$3.23b if it regulated the energy sector as planned, with earnings dropping 20-25 per cent. Meridian is due to list on the sharemarket in early November.
Hayward-Ryan says the performance of such advisers and their funds can vary dramatically and the database would help better inform investors. The Investment Advisers Performance Measures website (www.iapm.co.nz) was created with the help of Aon Hewitt Consulting Actuaries, who would have a monitoring role. The service will be free to begin with and it is planned the website will have data on an estimated 1400-1500 authorised financial advisers.
and beverage sector. Marmont Capital Fund is the first of its kind and has secured 20 investors and is looking to invest in five companies. Managing director Matt McKendy is a co-owner of Abes Bagels, along with fund chairman Tony Kerridge, former general manager of Caffe Laffare.
Average Auckland home costs $652,129

Average house prices increased 8.5 per cent in the year to August, with Auckland and Christchurch recording double digit growth, according to Quotable Value. Auckland prices rose on average 13.1 per cent to $652,129 and in Christchurch by 11.4 per cent to $436,251. Wellington saw average values of $445,784 (up 2.9 per cent) and Hamilton up 3.9 per cent to $350, 427. QV said many areas bar Auckland
Food and drink fund launched

A new investment fund has been set up, focussing solely on the food
Whats New
Britain still global HQ for entrepreneurs

Lord Bilimoria, the founder of Cobra Beer, says Britain is still tops for enterprise. The businessman said this at the launch of the Sirius Programme to develop young entrepreneurs, which has attracted 170 young people from 40 countries including New Zealand.
through space and time and the border features the finely engraved words Dr Who 50th Anniversary 1963-2013. The gold coin, produced in collaboration with BBC Worldwide Australia and New Zealand Mint, follows the recent release of 10,000 similar silver coins. Overall, the coin collectables market has been estimated at US$1 billion.
half of its vegetable oils production go to make biofuels by 2020. Even greens recognise the folly of biofuels now, with them saying using new land to grow fuel increases carbon emissions. The higher food prices have also been blamed for increasing starvation in poorer countries.
Pound to go plastic
The Bank of England is considering using polymer notes by 2016. It has spent three years studying the impact of switching from cotton paper, saying polymer notes will last 2.5 times longer than traditional notes. The average fiver only lasts a year, the bank says. Furthermore, plastic money is harder to counterfeit, something noted in New Zealand when it introduced polymer money. Around 20 other countries have polymer notes, including Australia, Mexico and Singapore. Britons will be consulted on the move in the next few months, with a decision due in December.
Green energy kills business

European Union industry commissioner Antonio Tajani has warned of systematic industrial massacre as a push for uneconomic renewable energy leaves European businesses unable to compete with those in the USA who are benefiting from cheaper shale gas. His warnings come as consultants IHS say the US will double chemical output by 2020, thanks to natural gas prices dropping 80 per cent, while Europes chemicals output will drop by a third. IHS also said US$250bn in extra US manufacturing will be added by shale in the next six years.
Top 1% get 19.3 %
One of our great strengths as a country is that we have one of the most open economies ion the world. London, even after the crash, is still the financial centre of the world. The UK is the global headquarters of entrepreneurship, he said.
Dr Who Gold Coin

The New Zealand Mint has issued a gold coin to mark 50 years of Dr Who. The coin, issued as legal tender under the authority of Nuie Island, has a nominal value of $200 and comes in a classic wooden box. Only 250 have been minted and each one is expected to sell for $2,500. The reverse depicts the iconic TARDIS used by the Doctor to travel
Green energy kills people

Dumping biofuel subsidies will halve European food costs by 2020 and lower world food prices by 15 per cent, according to the European Unions own Joint Research Centre. Current EU targets are for more than
The gap between rich and poor in the USA has reached record levels, with the top one per cent pulling in 19.3 per cent of household income. This is higher than the 18.7 per cent the group claimed in 1927, according to economists at the University of California, Berkeley and the Paris School of Economics at Oxford University. The analysis is based on data from the Internal Revenue Service.
Cover Story
Fighting Talk
Bob Jones, the property mogul who abhors leaders, preferring knowledge and individualism, shares a few thoughts with World Investor New Zealand about books, property, the economy and why hed pay for a statue to honour Sir Roger Douglas!
Cover Story
or someone always expressing the bluntest of opinions, Fighting Talk seems an apt title for Sir Bob Jones new book. Sir Bob has been writing newspaper columns since 1966, and has also publishing 22 books, including five novels. Reading seems central to his life too, with a thirst for knowledge that sees him reading 120 books a year, and having two libraries (one in his Sydney home) containing around 20,000 books in total. His latest tome reflects the property investors interest in boxing and his passion for social history. Indeed, Sir Bob earned a Blue in boxing while at Victoria University Wellington, has commented on television on big matches and in 1985, he infamously punched TVNZ journalist Rod Vaughan on the nose, an event that was broadcast on television and can still be viewed online today. In the book, Sir Bob looks at the impact boxing has had on language, noting how the language of boxing dominates contemporary journalism. He also identifies 332 common usage terms and phrases which have boxing roots. The 73-year-old, who grew up in Naenae, Lower Hutt, says there is much kids can learn from boxing today. Boxing is a uniquely good sport for boys as it teaches them independence and self control, qualities which will serve them well in other walks of life. Team sports, by contrast, teach dependence. It also teaches intense concentration, failing which they will receive an unwanted bop on the nose, unlike say one-on-one tennis in which a lapse simply means loss of a negatable point, he said.
debate that and argue it was more passion, energy and purpose that lay at the heart of his accomplishment, he said. Churchill was always described as a great war leader. Its nonsense as he himself argued after the war, rightfully pointing out that it mattered not who was the PM, the war was won on the battlefield.
Furthermore, he was drunk throughout it as his minder Lord Halifax, who never left his side, revealed in his autobiography. Leadership implies followers, the antithesis of independent thinking, he said. After slamming one of the giants of 20th century history, the property developer is not afraid to turn to a major figure of the
Bob Jones on leadership
Such belief in independence and the individual, led Sir Bob to become his own boss instead of working for someone else and being told what to do. He has strong views on leadership, believing there is too much waffle about the subject. In New Zealand, we constantly believe the point about the absence of Maori leadership. In fact Maori woes can be attributed to too much leadership and a lack of independence. Ill wager the highly successful Tamaki brothers never bought into this blarney. To that a critic might say that Bishop Brians accomplishment in building a large and growing church from scratch is directly attributable to his leadership. I would still
Sir Roger Douglas in parliment
Cover Story
thus warming the hearts of every male, he said. But as well, we all know their virtues of study and industry and as our politicians do nothing about the dead mass of welfare-sated, disdainful-of-education and self-help, parasatic lumpen underclass, a direct consequence of welfare excess, we certainly need the Chinese to build the tax base.
Bob Jones on property investment
New Zealand political scene today. John Key is described as an outstanding leader. I dont believe thats necessarily so, rather hes very popular thanks to a natural charm. Ive been described as a good leader regarding my commercial operation which now has $1.5 billion of buildings. I achieved that by thinking, nothing more and (I) only employ thinkers (something) borne out by my New Zealand manager being a historian, Sir Bob continued. He points out that his key staff do not belong to any commercial organisations. They are all readers and thinkers, Ive taken a highly analytical approach about economic trends and patterns which has been at the root of our success. We know everyone in our activity and I have yet to meet one ever, who has a proper comprehension of the business, doubtless a factor in why so many go belly up, he said.
Bob Jones on New Zealand today
Looking at New Zealand today, Sir Bob sees a childish government antagonism towards commercial property, reflected by the removal of depreciation, unique to New Zealand, based on a, doubtless commissioned, Treasury report. Government seeking to impose Loan to Value ratios in mortgage lending is a silly move, particularly by a National government which supposedly believes in the free market. High property prices have arisen from a booming Auckland, he says, with its huge recent years inflow of people. Labour see the problem better, namely
its an issue of supply, which of course, ultimately the market will sort out anyway, as it always has and if left alone, always will. That said, most folk own their own home and seeing prices rise is an enormous confidence booster. As (former Australian Prime Minister) John Howard said a decade back when under attack, regarding rising Australian house prices, Ive been hammered on every subject under the sun from one end of the country to another these past 30 years but no-one has ever complained to me about their home increasing in value, Sir Bob continued. Such rising prices could well boost Auckland Mayor Len Brown and his plans for a compact supercity dominated by apartments, something Sir Bob sees as a necessary move which will work. But the best move by the council is the plan to pedestrianise downtown, as with most other cities in the world. It will lead to a fabulous ambience and a splendid CBD. It would be terrific in Wellington as well but the council is too dreary to see it, he continued. Yet, despite foreign investment being touted by some as a driver of house prices, Sir Bob believes such investment is great and he opposes the Labour Party policy to restrict such investment, claiming the current housing shortage will be a temporary phenomenon. Its particularly bad as its aimed at the Chinese. If I was a dictator, I would bring in ten million of them, especially the girls who hugely enhance the city aesthetically,
Though Sir Bob has built is own $550 million fortune, according to the 2013 NBR Rich List, he admits residential property is an excellent investment for ordinary folk, particularly when compared alternatives such as investment funds. History shows that worldwide and averaged out, long term funds performance is appalling and certainly insufficient to provide a retirement income, he said. Theres a reason for that. If anyone has investment acumen, they will apply it for themselves and not work for a fund. There are always heaps of moneyed people who will back them for a piece of the action. I believe providing a living retirement is a justifiable role for government as it provides necessary certainty which the funds cannot do, he said. Babble about it (government super) is unaffordable is rubbish. Just stop wasting money on grossly excessive welfare and for that matter, the unnecessary armed forces and many other absurdities. Meanwhile people are wise to take decisions into their own hands and not leave it to others to waste their savings. Everyone understands housing which is why it is a good vehicle for the lay investor, he said. Nonetheless, Sir Bob has built a business empire on commercial property. The returns of course are lousy so its essentially a capital exercise.Whats extraordinary is everywhere else in the Western world, governments encourage such mum and dad investment whereas here, theyre pariahs, he said. Despite such criticism, Sir Bob says New Zealand is doing well, relative to other countries, economically, as the country is usually well-governed. We are prosperous. Life is a breeze in New Zealand for anyone who will make the effort, he said. Its a good place to do business compared with other countries as we dont have their appalling, costly and unneces-
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sary bureaucratic red tape. For example, by comparison with New Zealand, Australia is a nightmare, he said.
Bob Jones on politics
Yet, with New Zealand Labour possibly lurching leftwards under a new leader, such a government appears not to frighten this self-styled libertarian who formed his own political party in the 1980s because the National Party was not free-market enough for him at the time. Politicians aspire to power. Once they achieve it, they want to keep it, (something) best done by not instituting silly measures and becoming unpopular. Our three-year term is often criticised but it does have the virtue of keeping nuttiness at bay. I hesitate to criticise the prospect of a Labour government, mindful that since 1960, without exception, every National government has been a time of economic stodginess and every Labour government a time of economic vibrancy. National MPs tend to be pleasant dullards fixed in their ways. Conversely, its been my experience that Labour politicians are usually brighter and more openminded. The greatest politician in our last hundred years was Roger Douglas. Id happily pay for a statue of him. He began as a lefty then saw the light and produced wonderful sweeping reforms, to a degree unmatched anywhere in the Western world. Every New Zealander is hugely indebted to him, he said. Such support for Rogernomics fits in well with Sir Bobs libertarianism.
It means certainly acknowledging many key roles for the state- but thats all. The government needs less busy-bodyism. But with the all-important democracy comes the inevitable burden of constant publicly-demanded government activism. For example, no electorate anywhere has ever voted for a market economy with a minimum state, he said. But such views led to charges of vested interests from Cameron Slaters Whale Oil blog which noted Sir Bobs criticism of government over the depreciation issue and claimed he said government should pay to fix up buildings to code standards. As the largest private office building owner in New Zealand, who better to comment on issues pertaining to it? As for the socialist streak comment, not only is that infantile based on my form (the New Zealand Party et al) but rich coming from a National party zealot (Slater), said Sir Bob. If I concerned myself with such comment, Id be suicidal. Over the years, Ive been branded a fascist, Soviet Spy, a guilt-ridden wife beater (this after I helped establish the Womens Refuge movement here), a possible homosexual notwithstanding my life being awash with women and having numerous children between the ages of 5 and 47, punch drunk, an alcoholic (Ive had two small sherries over the past month), and so on ad finitum. Sir Bob then calls for the blogger to get his facts right. I did not say the government should pay to fix up buildings. Rather I pointed
out that given all the buildings are built to 100 per cent of the code, then if governments subsequently change that code, they ought to meet the cost. That is a logical argument. I further complained that this government doesnt even allow this expenditure to be deductable, this flying in the face of a key principle of taxation, namely consistency. I dont ask anything of the government as much as possible. Ive been entitled to government super for eight years but dont take it as obviously I dont need it, although having said that, Im appalled by wealthy people and I know of some who do, he added.
Property Investment
King Comm!
When it comes to property investment, the commercial sector can offer monster returns, with New Zealand enjoying some of the worlds highest. DARREN GREENWOOD looks at how to get them
e all know that houses are, as it were, as safe as houses, typically generating a healthy capital growth as well as somewhere to live. But investments in shops, offices and factories can deliver more, though the returns are riskier. While residential investment typically means investors letting their own properties, and maybe getting someone to manage them for them, investing in commercial property can be done in a variety of ways. You can invest and manage them as you would a residential home, or there are syndicates, or bonds can be issued too promising a certain return, with the money invested in commercial property. The Oyster Group is a specialist commercial property investment company that manages $600 million of property across all sectors, though it has a focus on retail and it developed the Dressmart chain. The company offers commercial property management, leasing, consulting, asset management, and it also syndicates commercial property investments. From time to time, says CEO Mark Shiele, it will have an offer on the market like 100 Harris Road in East Tamaki. The property aims to raise $11.4 million and is sold in 114 interests of $100,000 apiece. The projected initial return is 8.5 per cent. Typically, returns on commercial property are higher than residential and one of the benefits of syndication, is helping investors benefit from large scale investments, Shiele explained. Returns have varied due to location, but Oyster says they have bounced back following the GFC. Different properties have a different return structure and remember, the building you are investing in has a tenant, which means risk. With income being reliant on that tenant, you need to look at how likely you would get another if the tenant was no longer there, he said.
Law firm offers syndicates
While there are many similar commercial property businesses like Oyster, a relatively unique one is the law firm Glaister Ennor. In 1999, its partners created a property entity called GEK Property offering syndicated properties as investments to its clients. More than 25 properties worth over $120 million are under its syndicated management, with annualised returns often exceeding 20 per cent net, though current returns are 8.25-13 per cent pre-tax. Glaister Ennor joint managing partner Jack Porus says the law firm recognised its clients were seeking investments with higher levels of return an it realised commercial property could offer this. We identify well-located and well-leased commercial properties and we enter into a conditional agreement to buy them. Then we undertake due diligence and canvass our investor database offering our client investors the opportunity to acquire a part of that property, he said. Typically, GEK Property will arrange 30-40 per cent of funding by way of a bank loan, with the balance provided by investors. The aim is to deliver an annual cash return of 8.5 per cent after all management costs and that return is paid monthly. Porus says he tries to minimise the risk in several ways. Firstly, we generally fix the interest rate for at least three years but if possible for the full, likely term of the investment. Secondly, we do careful due diligence on the tenantsto ensure they will be able to perform. Thirdly, we peruse the lease to ensure the return is maintained at the level that we purchased at, he said. We try and fix all other costs including management fees so there is little risk to our clients receiving the monthly payments. We particularly look for rental growth during the investment term and we generally recommend to our investors that the property be sold when there is still a substantial term of lease remaining, Porus
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Property Investment
continued. We dont like to take the risk the property will be vacant. The main risks that exist are tenant default and the market weakening at the time we choose to sell, so there could be a capital loss, he said. At present, GEK Property is selling a BNZ property in Takapuna that it has owned for 12 years. An auction takes place on October 6 and six years of lease is remaining. Other properties GEK Property owns include the Glengarrys main office and its shop in Aucklands Victoria Park. Syndicated property investment can be good or it can be bad. The most important thing to consider is the track record of the syndicator. Returns depend on the skill of the syndicator. In the hands of a good syndicator, syndication allows people with smaller sums to invest directly in commercial property and to spread their risk over a number of properties, Porus explained. People should take particular care to understand the likely term of their investment and the syndicators exit strategy. There are some syndicators who enjoy getting the management fees and hold the properties for too long, he added.
greater commitment of capital compared to residential property investment and because of this the risks and rewards are magnified, he said. Investors can mitigate some of these risks by conducting thorough due diligence on potential acquisitions and engaging the services of a professional management company. It is also worth noting that investors can access the rewards of commercial property ownership through property vehicles which are listed on the NZX. As yet there are very few listed investment vehicles in this country giving real exposure to the residential markets, he added.
Dynamic market delivers
Capital and tenants top risks!
A key concern for investors in commercial property is the strength and quality of tenants, says real estate company CBRE, whose all-round property services last year were expanded to include a Project Management division delivering property projects ranging from $100,000 to $50 million. The risk of a single tenant vacating can be reduced through owning multi-tenanted buildings, or investing in properties that are not over specialised in nature and appeal to a variety of occupants, said CBRE New Zealand managing director Brent McGregor. Compared to residential property investment, commercial property investment lease terms are much longer, typically ranging between 6-9 years. Larger tenants can typically lease for as much as 12 years. Smaller tenants and those on a growth path may sometimes lease for only three years with multiple options to renew, he explained. Another major difference compared to residential property investment, McGregor continues, is the degree of financial leverage that lenders are willing to tolerate. It is much lower for commercial property investment than it is for residential property investment. In general, commercial property investment involves much
CBRE says the investment sector of the market has become the most dynamic part of the Auckland property market over the past six months.A combination of factors; favourable returns from property relative to other asset classes, improving occupancy fundamentals, low cost of, and easier access to, debt, and better capitalised purchasers, has led to a greater weight of capital chasing property from both on and offshore parties, McGregor further explained. At the same time, good quality investment stock with long lease terms to tenants offering strong covenants is generally tightly held. When such properties have come on the market, some of the prices achieved have exceeded expectations and this trend has started to flow onto secondary properties offering better investment properties, he said. The market is increasingly moving from its earlier acknowledgement of the recovery to greater focus on development opportunities. The development sectors positive response to improving market conditions is evident in the supply pipeline. Auckland has nearly 280,000 m2 of office land compared to less than 200,000 m2 six months ago, he said. The first half of 2013 has shown a continuation of transaction volume increases when compared with the first halves of the previous two years. At the same time, transaction volumes have decreased with respect to the second half of 2012 with sales activity being at $1,018 million over 48 transactions. Over the next year, we see increasing emphasis on rent growth and we anticipate a full rental recovery around 2015, McGregor added.
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KIWI STREETS PAVED WITH GOLD

If you are an investor in New Zealand commercial property, you could well be earning the highest returns in the world. Commercial agents CBRE reported healthy yields in the country, which it noted were better than places like Hong Kong and Tokyo. The Property Council of New Zealand also reported returns of up to 14.7 per cent for CBD office space and overall returns back above the long term rate of ten per cent. The Property Council New Zealand/ IPD New Zealand All Property Index Q2 Results released in September, showed a total return of 12.4 per cent for the year ending June 2013. This was made up of 8.0 per cent income return and 4.1 per cent capital growth.
rise above the long-run average return throughout the remainder of 2013 and into 2014. Property Council chief executive Connal Townsend says the latest results shows evidence that the commercial property in New Zealand is performing well. Industrial, retail and office property are continuing to provide returns well worth highlighting. However, the real standout in the latest set of results is the office sector. This time last year, total office returns were sitting at 7.0 per cent. This has steadily increased each quarter, to 12.0 per cent for the year ending June 2013. Looking into total returns, the real performer is in capital growth. All capital returns have increased significantly, recording a combined total of 4.1 per cent- up from 2.5 per cent in the year ending March 2013, he said. New Zealand property investment performance has increased across all sectors since last quarter; with total returns of 13.1 per cent for retail (up from 12.7 per cent), 12.0 per cent for office (up from 9.8 per cent) and 11.5 per cent for industrial (up from 10.6 per cent). This strong performance continues the upward trend seen when comparing June 2013 returns to June 2013, with an increase of 450 bps for offices, 150 bps for retail and 160 bps for industrial.
The June 2013 results beat the previous 11.0 per cent and last years June result of 9.2 per cent. Results were driven mostly by the office sector which is up by 1.2 per cent. More specifically, total return for CBD offices increased from 11.1 per cent to 14.7 per cent, driven by a 2.3 per cent increase in capital return. Over the past 12 months, New Zealand Listed Property vehicles (LPVs) outperformed other asset classes, achieving an annualised return of 15.9 per cent; with the closest competing asset performance being equities at 14.7 per cent. Taking a longer view, over the past five years to June 2013, direct property returned 5.7 per cent, New Zealand LPVs 8.0 per cent, NZ Bonds 9.5 per cent and Equities -0.2 per cent. The Property Council New Zealand/ IPD New Zealand All Property Index provides a broad measure of returns for commercial property investment in New Zealand. The index database is comprised of property assets from 26 participating funds with a combined asset value of $12.1 billion representing 579 investments. Market conditions, it says, have improved with total returns moving above the long-run averag annual return of 10.1 per cent. IPD Australia and New Zealand executive director Dr Anthony De Francesco says these latest results demonstrate that the New Zealand commercial property market continues its recovery post-GFC. The ongoing improvements in returns for New Zealand property investment is consistent with strengthening economic fundamentals, such as employment demand and retail trade. The index suggests that property investment returns should continue to
Relative to the Australian market, New Zealand property is outperforming by 330bps with a 12.4 per cent total return, compared to 9.1 per cent returns for Australian property.
New Zealands healthy returns from commercial property are confirmed by findings from global agents CBRE, who says the
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country has yields among the highest in the world. CBRE Research in New Zealand reported in August that Auckland has office yields of 7.73 per cent and Wellington has office yields of 8.2 per cent, far outshining the 3.5 per cent earned in Tokyo and 3 per cent in Hong Kong. Rents have been stable in most sectors, unchanged in Wellington office and CBD retail for the past year, with recently increases in
Christchurch industrial (+3.1 per cent) and Auckland office (+3.2 per cent). CBRE Head of Global Research Dr Nick Axford says as government continue programs of quantitative easing, hedges against inflation look increasingly attractive. As a result, prime property- a real asset, higher yielding than bonds continues to look attractive to investors, and whilst yields are low the spread between bond yields remains quite high, which should offer some protection from any future rise in the risk free rate, he said. CBRE Head of Research for New Zealand, Zoltan Moricz, says the weight of capital seeking commercial real estate is building in New Zealand. Vacancy has been trending downward in the past two years, even in secondary markets, driving an increasing focus on development opportunities across most sectors. We are seeing greater confidence around short-term economic prospects but the growth spurt is set to be short lived, even though it should translate into occupier demand and absoption. The resultant supply demand balance will lead to vacancies trending below the long term average, he said. Moricz adds that property returns correlate to interest rates but they have a stronger correlation to underlying property performance, supported by rent and yield trends. Property market trends are diverse, which result in a diverging cap rate trends and further but moderate yield firming, although rent growth is likely to accelerate, he said. Looking at Wellington, Moricz says current market conditions are not as bad as many may think. There has been some strong economic growth growth underpinning property demand evident in the last year. In addition, the impact of the siesmic issue is perhaps less than might have originally being forecast, with less than 5 per cent of the stock we monitor facing significant adverse impact, based on our current knowledge of NBS scores, he said. We foresee Government freeing up approximately 100,000 m2 leading up to 2019 as part of its rationalisation programme. However, the impact of this will not be evident to its full extent in the market until 2016, when a number of buildings being vacated will return to the market after refurbishment. As a result, we see stable vacancy over the next three years. However, subsequent tranches of government reorganisation may yet prove to be a demand base for refurbished buildings until the reorganisation runs its course, Moricz added.
13
Comercial Property
A top tourism trio

Three of New Zealands most exclusive freehold, boutique hotels in the South Island have been put on the market for sale, writes TOM THOMSON
istinction Nugget Point Spa Resort Hotel in Queenstown, Peppers Awaroa Lodge in Abel Tasman National Park and Portage Resort Hotel in Kenepuru, Marlborough Sounds. Managed by Peppers and Distinction on behalf of the vendor, the three hotels are being marketed for sale together or separately by leading property experts, Jones Lang LaSalle. These three top end resorts represent some of the finest properties the New Zealand hospitality and tourism sector has to offer. Each has their own uniqueness and individuality and they offer potential investors many appealing opportunities, said local director sales John Binning, who is responsible for the sales. Distinction Nugget Point Spa Resort, built in 1988, is located above Queenstowns famous Shotover River, with Coronet Peak as its stunning backdrop. It offers 40 luxurious suites and facilities include a new health spa opened in 2010, a full gymnasium, tennis courts, squash court, a wine tasting cellar, library and home theatre. The resort enjoys a distinguished clientele. Sitting on 8,043 m2 of prime land, the property is fully unit titled for future sale. Forty of these are the individual accommodation units and accessory units with the remaining unit titles holding interest in the common facilities. Adjoining the resort, a further 11,840 m2 of special tourism zoned land forms part of the hotels total estate offering development opportunities to enlarge the current hotel or possibly develop separately. Peppers Awaroa Lodge is situated in New Zealands beautiful Abel Tasman National Park (The number one walking park in tourist popularity). In 1991, a group of locals built the first buildings on freehold farmland and nowadays this 26 guest roomed lodge is the only provider of luxury accommodation allowed in the park. With no roads in the national park, the lodge can only be accessed via aircraft, by sea in water taxi or sea kayak or on foot. This four star lodge is well known for its advanced ecological principles and has recently been awarded Silver status by the world renowned Earthcheck organisation. The large organic gardens feed the lodge with fresh herbs and vegetables. Set back 250 metres from the beach in Golden Bay and also offering a separate pizzeria cafe bar and budget accommodation, it is a prized luxury Lodge with wider appeal for hikers and kayakers. The site encompasses almost of 19,941 ha freehold National Park wildlife land and is the largest freehold land holding within the park. Peppers Awaroa Lodge sits on the north-easterly portion of the land, with 85% natural forest remaining protected for nature. 14
Peppers Portage Resort Hotel has a stunning setting directly on the beach in Kenepuru in the clear, clean waters of the Marlborough Sounds. Originally built in 1886, today it offers 41 boutique luxury suites all situated on the waterfront with spectacular views and a great restaurant. A small walkers lodge adjoins the hotel. The hotel is at the midway point of the famous Queen Charlotte walking and cycling tracks that follow the Queen Charlotte Sound skyline and this creates the perfect base for any adventurer. In quiet times, the hotel caters extensively for meetings and incentive groups. The hotel has a separate locals pub, aptly named the Snapper Bar and an adjoining adventure centre for the hire of kayaks, boats, mountain bikes and adventure fishing gear. This resort is the jewel of Kenepuru. A short tar sealed road connects the hotel to the Picton ferry operators. In 2012, $1.4million was invested into new infrastructure works and the hotel itself had a substantial upgrade. The property is fully unit titled for future sale and part of the land by the sea edge is Queens chain conservation zoned and licensed accordingly. All three properties are situated in some of the best geographical areas in the world. These sales offer a potential investor the opportunity to buy into some of New Zealands most beautiful and breathtaking areas, we are anticipating a serious amount of interest. And with so many unit titles on offer, there are so many options, concluded Chris Harding, who is working with John Binning on all three sales. The closing date for all expressions of interest is November 5 2013, unless sold prior.
McEwens VIEW
Dont inflate the bubble

DAVID MCEWEN shows how to avoid paying too much for assets during investment bubbles
ver since the US Federal Reserve turned on the money spigot in the late 1990s, there has been a series of investment bubbles, in stocks, property, bonds and commodities. Property is again hot right now, thanks to record low interest rates but there is a danger in buying assets that are expensive, unless the best possible outcome occurs. If a nasty surprise comes along, expensive assets can revert to their normal valuation and give the investor a substantial loss. Here are some ways to avoid getting trapped in buying assets during a bubble.
However, armed with the knowledge of how manias develop - and eventually always pop smart investors tend to sell assets that have gone up in value and buy those that have fallen in price. This is the exact opposite of how the majority of investors act, time and time again.
Focus on value, not price
Successful investment is all about getting the maximum return on your investment. Some people are prepared to pay a high price for assets that deliver little or no earnings now in the expectation that the asset will appreciate rapidly and produce an attractive return in the future. During investment manias, people pay so much for an asset that there is no chance they will ever achieve a worthwhile return on their investment.
Compare returns against other options
The key to successful investment is to find the most attractive return while minimising the chances of sustaining a large capital loss. One way to do this is by using the price:earnings ratio. This is a measurement found by dividing an assets value by its earnings. For example, a $20 share in a company generating $1 per year in earnings has a price:earnings ratio of 20. A house worth $1 million that generates $50,000 a year in rent has the same ratio. However, it can be more instructive to turn that calculation around and divide earnings by the asset price. For example, $1 divided by $20 or $50,000 by $1 million provide an annual return of five per cent. This figure can then be compared with other investments, such as risk free, government stock. If that is yielding three per cent and an alternative asset offers the same, then investors have to decide whether it is worth taking the extra risk.
Ignore popular opinion
It can be very difficult for investors not to get caught up in a mania when everyone they know is participating - and generating substantial, rapid short term profits.
15
Insurance
Homes on shaky ground

Recent earthquakes have changed how insurers will base their payouts, warns SIMON KEMBER
or most homeowners in New Zealand, their home insurance has always been an unspecified replacement cost based on the floor area of their home. However, following the Christchurch earthquakes, insurers are now adopting a new home insurance policy whereby all home insurance policies will be based on a sum insured. The policy change is a result of major reinsurers (the insurance companies who insure our local insurance companies) requiring greater clarity on risk and the maximum costs to rebuild the homes they insure. Many insurers claim that the changes are about providing certainty and managing affordability for homeowners, and that the cost of premiums for home owners will not change. The result is that the onus is now on homeowners to get their home valued correctly as the sum insured will be the maximum amount the insurers will cover in the event of a claim. The Insurance Council of New Zealand and the majority of insurance companies have published information online, and provided fact sheets and valuation calculators, to inform homeowners and assist them to calculate the insured sum for their home. In order to determine the sum to be insured, homeowners must determine the cost of completely rebuilding their home. Accordingly, it is paramount for homeowners to be aware of the unique features of their home. These include: Structural features (floor area, number and types of rooms and levels, the style and standard of construction of the home, the material used to build the home) Exterior structures associated with the home (decking, paving, driveway, garage) Recreational features (swimming pools, tennis courts) The slope of the land the home is built on and whether there are retaining walls, and Additional special features near the home (bridges, dams, private wharfs).
and keep their insurers updated upon renewal of their insurance policy. It is crucial for homeowners who complete renovations or changes to their home to ensure that those works (and the possible increase in value) are covered by their insurance policy. Obviously, this is a significant change to the duties of the insurer and insured, and it shifts the onus to the homeowner to correctly value their home and the sum insured. Homeowners need to be proactive, as many insurers have already transitioned all new home insurance policies to the sum insured base, and all existing policies are likely to change at the time of renewal. One of the main consequences for homeowners, if they fail to adhere to the new policy, is that a default sum for the home will be calculated by the insurers which may not reflect its true value or the costs likely to be incurred in replacing the home. For most people their home is their most valuable possession, consequently homeowners need to be aware of the changing terms of their insurance policy, and be proactive in ensuring their home is adequately protected. If you have any queries regarding your home insurance policy you should contact your insurer immediately. If you have any issues regarding insurance claims, it is prudent to obtain legal advice. Simon Kember is a partner for Glaister Ennor, and a commercial and industrial property, trust and real estate specialist.
Homeowners should also include professional fees and costs e.g. fees for architects or engineers, demolition costs and removal of debris etc. The sum insured does not include the value of the land on which the home is situated, or what it would cost to buy your home. Therefore the purchase price, rates valuation, or other similar estimate cannot be relied upon to determine the homes value or insured sum. In addition to calculating the value of the sum insured, each year homeowners must also determine the adequacy of the sum insured 16
Company Profile
Boxes of delight
SmokeFree legislation makes it a tough job to sell tobacco, but TOM THOMSON reveals how The Humidor Company overcomes such restrictions to become New Zealands top supplier of cigars, pipes and related products.
hief nub master Grant Ovenden says it is hard working in a dark market, where he cannot directly market brands and display the products on his website. Still, in the three years The Humidor Company has operated, the Christchurch business has grown to become New Zealands largest retailer of cigars, humidors, pipes, pipe tobacco and accessories. It sells their stock online, being one of the few legally still able to sell tobacco online. The business has also developed a successful wholesale operation supplying bars, restaurants, resorts, golf courses, barber shops and liquor stores. Grant created the business to open up New Zealand to the finest range of cigars possible, with him forging relationships with suppliers throughout Central America. We proudly represent the top Premium cigar manufacturers (also known as the new world of cigars) whom make up the top of the cigar world today from the likes of long-standing and highly respected families such as Padron, Arturo Fuente, J.C Newman through to newer makers who are considered the next generation of cigar producers such as Drew Estate (the hottest cigar maker in the USA), La Flor Dominicana, My Father Cigars (currently the number one cigar brand in the world) through to smaller boutique makers such as La Jugada, Fratello, RoMa Craft Tobac and Viaje, who all produce small-batch, extremely high quality and very sought after cigars, he said. As its name implies, The Humidor Company also stocks the largest range of humidors - a specialist storage box made of Spanish cedar which store cigars at 70% humidity. The Humidor Company also stocks many Cuban (Habanos) cigars, plus a growing range of domestic (machine made) and flavoured cigars. It is also the countrys only retailer for Xikar- the number one cigar and pipe accessory maker in the world. Grant says his connections have helped him access some of the rarest cigars in the world like the Alec Bradley Fine and Rare (only 20,000 are produced each year) and the Liga Privada range from Drew Estate, almost impossible to find in the USA, let alone in New Zealand. Currently, the trend is for larger and fatter cigars, but this is extremely prohibitive in New Zealand, which imposes excise duty on the weight of tobacco rather than face value or the number of cigars. Currently, this is $612 per kilo of tobacco or $11-$19 per cigar depending on size.
Grant says there is also growing demand for dark-Maduro cigars from Nicaragua and Honduras and his recent visits to partners and suppliers means he can get the latest hot brands from the USA almost straight away. I am the most passionate and quite possibly craziest cigar aficionado in the country, investing a significant amount of money and effort in this old-world, artisan product in an endeavour to ensure aficianados of New Zealand have the best possible choice of cigars, pipes, humidors and accessories possible, he added.
Grant Ovenden at IPCPR 2013, Las Vegas (the worlds largest cigar tradeshow)
17
Business Advice
Ending of funny money gives markets the shivers

Fears that the US Federal Reserve will reduce the rate at which it prints money to buy bonds has sent shivers through financial markets. Reports MICHAEL COOTE
o far this year, the Fed has been printing $85 billion per month to buy US Treasury bonds and asset-backed securities issued by mortgage lending agencies such as Freddie Mac and Fannie May. The Fed purchases these assets in the open market and pays for them by crediting newly-minted electronic cash to the sellers bank accounts. Where government bonds are being bought, the programme is called quantitative easing (QE). Where asset-backed securi-
ties issued by agencies are being purchased, the programme is termed credit easing (CE). Together, QE and CE are intended to reduce long-term interest rates, particularly the rates at which corporations and home buyers can borrow funds. In theory, QE and CE should benefit the real economy by increasing demand for cheap credit, although in practice credit has been tight in the US domestic economy since the global financial crisis struck regardless of the Feds interventions. The only reason the Fed resorted to
QE and CE was that the US economy was so sickly, but with the economy apparently on the mend, the central bank has signalled that it wants to taper or progressively diminish its money printing. Talk of tapering has roiled financial markets. A side effect of QE and CE is that financial markets get puffed up, especially markets for risky assets like shares and lower grade corporate bonds. The mechanism is called portfolio substitution. As the central bank be it the Fed,
18
the Bank of England, the Bank of Japan, or despite denials the European Central Bank prints money to buy bonds, its purchasing activity removes bonds from the market and replaces them with new cash. This cash earns next-to-nothing because alongside QE and CE, the central banks are also running near-zero overnight cash interest rates. Bond sellers left holding unremunerative cash then search for yield by seeking better-paying assets to spend their sale proceeds on. Their choice typically settles on risky assets like shares and lower-quality bonds that feature reasonable yields from interest or dividends and prospects of capital gain. Increased demand from bond sellers undertaking portfolio substitution pushes up prices of risky assets. QE and CE are thus monetary conveyer belts for new cash to be applied to buying risky assets, regardless of the fact that the underlying economy has to be in such very poor shape that the central bank has to print money in order to bail it out. These risky assets can be bought from the domestic economy within which QE and CE are applied, or abroad in other markets such as foreign developed economies and emerging markets. Notably, the Feds QE and CE binge has triggered portfolio substitution pricing effects on risky assets worldwide. Under portfolio substitution, markets for risky assets can detach or decouple from the circumstances of the real economy, wherein goods and services are produced for consumption. This has in fact happened in the US, where the real economy crawled along while shares and lower-quality bonds rocketed away in market value. Sooner or later, however, there comes a day of reckoning, as at some stage prices for risky assets must reflect the true outlook for the real economy. After all, prices for shares and lower-quality bonds should reflect the future prospects for companies paying interest and dividends earned in normal times from real economic activities. Ironically, QE and CE programmes are no longer needed when the real economys prospects are looking better, as has now occurred in the US economy. But if QE and CE arent needed, and can be tapered by progressive diminution, then the funding for portfolio substitution dries up. Here a gap opens out between where market prices for risky assets have been inflated to by portfolio substitution, and what lower prices should be paid for the same assets based on realistic assessment of economic prospects and the likely dividends and interest payments to be expected. The width of this gap determines how much prices for risky assets must be adjusted. The US economy is recovering, and so risky US assets should fare better than those from weaker economic regions once tapering gets into full swing. Other economies, such as the recession-plagued Eurozone and emerging markets struggling to maintain high growth rates are likely to suffer a lot more from the withdrawal of QE and CE because their economic prospects are gloomier. The market discounts everything, and so without tapering even having started, the expectation that it will happen has caused longer-term interest rates to rise, defeating the purpose of QE and CE. The funny money effects of QE and CE are starting to wear off, meaning risky assets will undergo an often volatile period of correction and readjustment in returning to normal pricing criteria.
19
Franchise
HOW TO GRAB A SLICE OF A

TWENTY BILLION DOLLAR
INDUSTRY
Franchising represents an opportunity to be your own boss, while benefiting from the success of an established enterprise, writes DARREN GREENWOOD
cDonalds, BurgerFuel, Subway, Cash Converters, Robert Harris and more. All are well-known brands who operate as franchises- an increasingly popular kind of business. Franchising is a method of marketing and distribution where a company (called the franchisor) expands nationally or internationally by granting a person or a company (called the franchisee) the right to operate a copy of its business in another geographic area. The right will usually include the ability to use the brand name, the business system and the know-how of the franchisor. The franchisor gains its income from initial and ongoing fees paid by the franchisee. In return, it must provide a variety of services to encourage the continuing profitability and growth of 20
the franchisees business. Franchisees invest in setting up the business in their own areas and are owners of their own businesses. They receive their income from successfully marketing their products and services under the brand name of the franchisor. The Franchise Association of New Zealand says franchising has proven to be one of the most dynamic business methods of the past 50 years. It enables companies that have a desirable product or service to expand faster because they are using the capital, local knowledge and commitment of individuals who are in business themselves, said the associations website. It gives those who wish to be selfemployed the ability to go into business properly trained and equipped, with the security of a well-proven product and system behind them. Franchising is a major part of daily
life in New Zealand. Many of our bestknown brands are actually franchises: NZ Post, Lotto, Bakers Delight, Robert Harris, Cash Converters, Paper Plus, the $2 Shop and, of course, McDonalds. Franchising should not be confused with pyramid selling or network marketing.
How big is franchising?
The Franchising New Zealand 2012 survey by Massey University estimated the franchising sector contributes $20 billion to the New Zealand economy, with 22,400 franchisee businesses employing 101,800 people. Since the last survey in 2010, the franchise sector has seen turnover levels increase but size and profitability fall slightly, due to the continued economic tough times and the Canterbury earthquakes, the survey said. Franchise businesses make up 5
Brett Rodgers six ways for success.

per cent of New Zealands small and medium-sized businesses but the number of actual franchisee units fell marginally over the past two years, with retail franchises suffering. However, the number of franchise brands has grown slightly to 446, of which 90 per cent are home grown. Its an extremely competitive environment at the moment, and 60 per cent of franchisors said they were forced to spend more on marketing to attract dwindling levels of business. Although 80 per cent said their franchisees were operating profitably, that still leaves a significant number of strugglers, said Massey Universitys Dr Susan FlintHarte. Dr Flint-Harte says there are ways the sector can improve itself, such as how franchisees are selected. Franchisors are always complaining that their major issue is getting good people as franchisees, but they dont always appoint suitable people with at least some proven business skills and management experience. They choose people for their passion, or their integrity, which is understandable but it doesnt always translate into running a business successfully, she said. Franchisees are also all too often chosen for their ability to conform, when instead, franchisees should be encouraged to innovate in areas like online sales and social media marketing. Nonetheless, the size of franchising in the New Zealand economy cannot be ignored. Franchising remains a very effective way of growing a business and offers many people a chance for supported self-employment so we cannot underestimate the role it plays, she added.
1-Do your research
Turning a business into a franchise
Helping develop the franchise sector in New Zealand is Win Robinson of Franchize Consultants. His business assesses existing franchise operations and sees how they can be bettered. It also looks at which existing businesses might be suited to a franchise model. Robinson says firms looking to franchise their business need professional help in developing the structure and format of such franchise operations, as even a half a per cent on the royalty can cause disaster. Franchising is not taught in any of our universities, unlike Australia, and generally executives dont know much about it, he continued. Franchising is used in just about every kind of business nowadays, including doctors and lawyers. Every business that has branches can be franchised. The business also has to be profitable. It has to be taught to others in a reasonable time. It has got to be able to be systemized so you create efficiencies and be transferable and marketable, he said. The business also has to appeal to people so they want to be in the franchise and can afford it. It also needs longevity. Its not a fashion or a fad. When franchising first appeared in the 1950s, it tended to be in food, but now covers about 90 different business types, with the service sector increasingly popular. Fast causal restaurants like Mexicalis is a recent arrival to New Zealand with four outlets, following trends in Australia and the USA. But Franchize Consultants recently helped debt collectors EC Credit Control take its business concept to the UK and develop franchisees there. Its got a lot of potential and people are starting to wake up to that, he said.
Find out a little bit about the exhibitors on franchisingexpo.co.nz. Check out their websites and articles that have been writtenfind out what they offer and where they are looking to expand. Have a list prepared of what franchises you want to visit and what specific questions you want to ask. Although it may be too time consuming to research all exhibitors, itd still be a good idea to have a few in mind before attending the expo.
2-Ask questions
Every individual is different, so you want to ensure the franchise you choose best fits your specific lifestyle. Important factors to inquire about include: investment and royalty costs, hours of operation, as well as training and support. If a certain franchise appeals to you, but you havent had experience in the specific industry you should ask about training procedures. Also keep in mind that there are home-based franchisesthis may be the best option for a family with young children. If you feel as though you still dont have a thorough grasp of the franchise, ask to interview existing franchisees.
3-Dont get distracted
With many exhibitors vying for your attention, make sure you dont get diverted by a delicious slice of pizza or an awesome give-a-way. In addition to press materials, franchisors will often distribute gimmicky-type items to draw you towards their boothdont let it keep you from staying focused on the task at hand. Remember why youre attending the show. If you are serious Continued pg 24
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Franchise
How to be a franchisee?
People looking for franchises for sale, business and franchising opportunities in New Zealand, could look at the options available at this months Business Opportunities & Franchise Expo in Auckland, which expects to attract 80 different franchised companies. It allows people to meet experts and talk to business owners face to face in one place and on neutral ground about how to start, how to grow or how to franchise. This is information that could take days to collect, interview appointments, meetings and discussions can be researched in a matter of hours, said Brett Rodger, managing director of the Franchise Expo company, who is staging the Auckland event and a similar expo in Christchurch. Talk to the experts and learn to minimise any risk. There are new franchising opportunities launching for the first time plus mature business systems with franchising opportunities available nationwide. Look for business ideas to suit your lifestyle and budget. There is a wide range of price points from under $50,000 to over $500,000, he said.
BurgerFuel fires up across New Zealand and the Middle East
prospering in international markets, the company says there remains much opportunity locally for growth in New Zealand. The company operates out of two separate headquarters in New Zealand, BurgerFuel Worldwide and BurgerFuel New Zealand. They sit across the road from each other, with BurgerFuel New Zealand running their own local operations team to support franchisees. Additional offices also operate in the Middle East. BurgerFuel CEO Josef Roberts says a key factor in building BurgerFuel as a global New Zealand brand is the opening of new stores and expansion into new markets in New Zealand and across the globe. This is being achieved through a business model of Master Franchisees internationally and local franchisees on the ground in New Zealand. This model allows BurgerFuel to use the knowledge of key partners in New Zealand and overseas to run stores, while BurgerFuel Worldwide concentrates on the broader strategic goals and objectives of the business as well as supporting franchisees. For BurgerFuel, being able to reduce intense capital expenditure requirements in territories under
Master License Agreement, allows us to support our expansion strategy with more resources both locally and globally. This in turn creates a sustainable and scalable business model, allowing us to licence our intellectual property in systems, marketing and products rather than in soaking up key financial resources to open stores said Roberts. The costs of taking on a BurgerFuel Franchise depends on the type of store required for a given area and the expected store volume. For New Zealand, the average store costs between $250,000 and $450,000 to build (including the construction management fee) along with a franchise territory fee of $35,000 and a training fee of $15,000. BurgerFuel is a full turn-key operation, and the upfront costs will provide franchisees with everything they need to run a successful and profitable franchise, Roberts continued. Roberts said he believes having the right people is the most important factor when it comes to success, so BurgerFuel reviews all applications on a case-by-case basis. Franchisees do need to come in with a certain amount of unencumbered capital. We place considerable importance
From its origins on Aucklands Ponsonby Road, where the first outlet opened in 1995, BurgerFuel has expanded across Australasia and now has outlets in the Middle East. In 2003, the company launched an aggressive growth strategy and quickly expanded throughout the North Island and into Australia. Following a stock market float in 2007, BurgerFuel began opening stores in the Middle East and today there are 50 BurgerFuel restaurants globally with more opening every month. In June, BurgerFuel announced annual profits of $1 million, up 55 per cent on last year, with such growth reflected in the share price also rising 70 per cent over the past year. Last year, BurgerFuel won Franchise Exporter of the Year in the Westpac New Zealand Franchise Awards and while the gourmet burger franchise is 22
People ask me what its like being a BurgerFuel franchisee. My answer is always the same...its the best decision I ever made. Sure, theres been a lot of hard work, but nobody gets anywhere without putting in the hard yards and when they ask me if its been worth it financially I tell them I wouldnt be building more stores if it wasnt, Walsdorf said. BurgerFuel has been a great investment. Ive been in this game a while now with three stores and yet I still leap out of bed excited to be involved. The model and systems have proven to be successful and the financial gain is worth the hard work, added James Stevenson, owner of three BurgerFuel stores. on providing the very best in support, systems, marketing and innovation to our franchise operators, at a level that is unparalleled by other brands. Franchisees gain the benefits of the systems and revenue models that BurgerFuel has developed to promote growth, sustainability and success in each new territory and market that the brand enters, he said. At present, BurgerFuel is looking to fill territories all over New Zealand, with a particular focus on the South Island, where the BurgerFuel team claims to be constantly blown away the by the volume of requests it receives about opening a store in the South. The same is true globally, where it seeks the right Master Franchise partners to help the brand take over the world. Our Master Franchise Partners in the Middle East have strong contacts, as well as access to the best sites and this makes a huge difference - we look for more than just a financial partner. Weve learnt that providing our franchisees with the right support and resources is the biggest contributor to success, and success and profitability for franchisees is at the forefront of everything we do at the local level, Roberts continued. Repeat custom a sign of success in any good business, he adds, noting 44 per cent of franchisees own multiple stores, with some, like Mark Walsdorf having up to six in their stable.
about investing in a franchise, then get serious at the event. And dont spend too much time with one brand. There are more franchisors to speak withso ask the crucial questions and move on.
4- Stay organized
Rodney Wayne cuts a dash
Rodney Wayne has been in the hairdressing business for more than 40 years and has been a franchising pioneer in New Zealand. Wayne started out in Melbourne, Australia, since he went to hairdressing school there and built up a chain of four salons by taking city chic to the country. Some 30 years ago, he moved back to
Only accept press materials from the companies that truly interest youotherwise youll walk away from the event frustrated and confused. Its also a good idea to bring along a pen and small notepad. By the end of the show, youll have talked to so many people; youll forget who is who! And remember hang on to your expo guide it has a little information on all the exhibitors and also gains you entry to the expo for all three days.
5- Schedule meetings
Dont feel pressured to get all the necessary information and face time in on Expo floor. If youre really interested in a concept, ask to meet with one of the sales managers for a meeting. This way you can talk to them oneon-one without all the commotion. Additionally, you wont feel rushed and you can ask more in-depth questions.
6- Get professional advice
Prior to signing anything it is imperative to get the advice of professionals both an accountant and lawyer.
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Franchise
New Zealand and saw a big opportunity, using a similar philosophy, noting the major chains were all in the city, giving him the opening to take welltrained hairdressers and beautiful fitout into the suburbs. Today, there are over 50 Rodney Wayne salons and specialist retail outlets around New Zealand. The idea for franchising came from a Frenchman called Jean Louis David, who now has franchised salons across the USA, Europe, the Middle East and Asia, Wayne recalls. He had about 800 franchised hair salons which specifically targeted the mid-upmarket customer. Looking at his business model, I got very excited and decided to go down the same path, he said. At the time, Wayne already owned 10-12 stores, so the brand was successful and he had already written an operators manual to maintain service standards. 24
When I launched the franchise 20 years ago, we had success straight away, with outlets taken up by very good investor operators. We built up a close relationship with the shopping centres, Westfield and AMP. The rest is history, he recalls. Rodney Wayne gives franchisees much support, including helping train managers and junior staff. It means 80 per cent of franchisees are non-hairdressers but they must be good with people and work in teams. To open a new salon is expensive, such as $300,000 in a mall but strip locations will be cheaper. A brand new site may cost $250,000, while existing Rodney Wayne businesses may cost $1 million. We have franchisees that have been with us for 20 years. We dont have a lot flicking them on. Prospective buyers should come and talk to us. Theres always people wanting to move on or have bigger store, he said.
Rodney Wayne is looking to open salons on the South Island, especially Queenstown, though the company has no set targets. Further growth is expected in Auckland, in its malls and on strip locations. Though hairdressing is a service that cannot be replaced by the internet, Rodney Waynbe has evolved over the years, with new looks and new hairstyles. The company also operates its own straining school. The biggest job we have is finding, training and keeping the best people. There are 450 staff in the group. The biggest part of what my office does is offering support . We do two season hair fashion collections for summer and winter. We build the fashion around our creativity and showing our staff and customers we have the ability to do that, Wayne added. Such support has helped some franchisees make six-figure profits, with some of the bigger ones now exceeding $250,000. Stuart McMillan, who has the franchise for Rodney Wayne salons in Albany and Glenfield, Auckland, said he chose Rodney Wayne in 1998 because hairdressing was internet proof, and as a cash business, did not involve chasing after bad debts. McMillan had been running a commercial laundry and found the switch easy as it was another service business. He has staff to do the hairdressing but he is comfortable selling product which he now knows about. Its about people management, people skills. Rodney Wayne group have fantastic systems. If you follow the system its almost foolproof, he said. McMillan describes hairdressing as a fun industry as its about making people happy, though there can be challenges in dealing with staff shortages. Having said that, hairdressing is pretty much recession-proof. When times are good, people have money to spend, when times are bad, they need to look good for interviews. The only regret I have is that I did not do it sooner. I have never looked back, he added.
25
Market Report
Market Report by David McEwen

Theres nothing like an election to clear the air. A secure win by the Coalition in Australia was greeted by strong gains on Australian markets as new prime minister Tony Abbott declared Australia was open for business again. The bull run lasted several days, also buoyed by positive news from China, with mining stocks, who suffered much from Labors mining tax, rebounding strongly. Among them, within a day or two of the decisive election result, mining giant BHP Billiton gained 48 cents to A$35.64 and Rio Tinto gained 86 cents to $61.95. The major banks also moved higher, the National Australia Bank adding 41 cents to A$33.18, ANZ rose 25 cents to A29.94, Commonwealth Bank rising 47 cents to $73.63 and Westpac gaining 29 cents to A$31.93. Airline stocks also fared well, with the Coalition promising to repeal the carbon and mining taxes. Qantas shares rose 5 cents to A$1.37 on the result. After a pause, the ASX then jumped to new heights, to around 5,250, following news that Larry Summers had pulled out of the race to succeed Ben Bernanke at the US Treasury. Bernanke has been blamed by many for helping cause the 08-09 financial crisis due to his influence on deregulating the financial services industry, though others also blame the US government pushing banks to lend to ethnic minorities who were least able to repay their home loans. The Summers withdrawal was also welcomed on Asian markets who also gained mid-month, who believe Bernankes likely successor Janet Yellen will continue his pro-growth policies. New Zealands share market also reported gains midmonth, with it topping the record high of 4,680.11 reached on May 14. The strong gains were credited on a successful reporting season, plus hopes that the situation in Syria may be sorted out somehow. Confidence in New Zealand following our successes in the Americas Cup was also touted, with Kiwi race wins fuelling a feelgood factor among investors. Among the risers mid-month was Auckland International Airport, which gained 2.37 per cent in one day to close at $3.245 following it featuring in various industry awards. Clothing chain operator Hallenstein Glasson hasd a strong run, mid-month, closing up a further 2.1 per cent to $4.90 in one day. The Port of Tauranga also clawed back losses, following news it had lost a major contract, to rise 1.4 per cent to $14.20. Big shed retailer The Warehouse fell however, down 1.3 per cent to $3.71 on news of its higher profits, but considering the shares have risen 26 per cent this year, there may well have been some profit taking. Overall, though, investor confidence remained high, with news from the Reserve Bank that the New Zealand economy is strong enough to bear an increase in interest rates next year, making it the first cab off the rank in the developed world to experience such a thing post GFC. But back to elections. Following the election of David Cunliffe as leader of the New Zealand Labour Party, the NZX reached a new high, topping 4,690. Now, whether this was due to the market factoring Cunliffes talents as a future PM, or whether his election helps secure the return of John Key and National, or whether other factors were behind the rise, remains to be seen!
NZX50
ASX ALL ORDS
26
Sharetalk
Sharetalk by David McEwen

Red sheds rise
The Warehouse Group (NZ: WHS) reported a 61 per cent increase in net profits to $145.3m on sales that were up 29 per cent to $2.2 billion. After adjusting for one-off items, countrys biggest listed retailers was up 13 per cent to $65.2m. Same store sales for the Red Sheds were up 2 per cent, giving a $1.6 billion total for the full year. WHS seems to be getting a new lease of life under new CEO Mark Powell with all divisions showing improvement. Warehouse Stationery had sales growth of 12 per cent, with same store sales of 2.8 per cent while Noel Leemings same store sales grew 7 per cent. This latter figure is a pleasant surprise as many observers had questioned whether Noel Leeming was a quality purchase given fierce competition in the electronic hardware and consumer durables sectors. Two factors are working in the retailers favour. One is the introduction of well known, quality brands (courtesy of Noel Leeming) and the other is an increase in the wage levels paid to staff. Having products that are cheap but fall apart no longer appeals to customers, nor does the lack of service within the Red Sheds, where staff seemed occupied on restocking rather than service. WHS is also moving more into offering online products and services and is making acquisitions that will help in this strategy. After a long period of underperformance, WHS is on the mend and offering a gross forecast dividend yield of 8 per cent is a bonus.
STATUS: GROWTH BUY PRICE: $3.78
WHS
Rakon on the rack

Former stock market darling Rakon (NZ: RAK), a maker of very small, very clear crystal chips used in equipment with GSP functions, has warned its losses will almost double this year, thanks in part to a disastrous investment in China. Just before it confirmed it would partially-sell its Chinese joint venture company, the company forecast a $54m net loss for the year to March 2014, compared with a loss of $32.8m this year. In the year to March 2015, Rakon hopes to make a gross profit of $10m - $15m and said that, once it was making a profit, it would pay half out as dividends. A lot can happen before March 2015 and investors wait for some evidence that is in a position to deliver a profit or pay a dividend before getting too excited. The company has consistently underperformed and recent barbed comments aimed at its management and directors, not least by the Shareholders Association, appear valid. RAK has been hurt by a strong $NZ but its profit margins also have been eroded over the years. Once a price war starts it is hard to stop it and get margins back up. Investors should always avoid any company that is involved in a discounting war.=I moved to a SELL on this share at $1.15 back in May 2011 and nothing in the recent announcement makes me want to change my mind.
Seeka goes soft

Seeka Kiwifruit Industries (NZ: SEK), the fruit grower and cool store and pack house operator, has reported a 92 per cent dive in first-half profit as the outbreak of Psa-V virus affected some varieties of kiwifruit. Its post harvest services to the kiwifruit and avocado sectors include fruit harvesting and packing, cool storage, and logistics activities. The company also offers orchard management, leasing, and associated services. Net profit sank to $672,000 or 5c a share, in the six months ended June 30, from $8.5 million, or 59 cents, a year earlier. Revenue dropped 16 per cent to $67 million on declining kiwifruit volumes. Kiwifruit growers have been struggling for three years following the outbreak of the virus, which has infected about 40 per cent of the nations orchards and devastated the gold fruit varieties. Despite the poor result, SEK announced an interim dividend of 6 cents a share and plans to invest in a coolstore in Malaysia. Chance are only orchardists are interested in this share, which is thinly traded and therefore needs to be held for a decent period of time. Many investors tend to shy away from any company that makes a living from growing things, given the vulnerability of earnings to weather and other factors. Those who own the shares no doubt are doing it for their own reasons and may as well hang on to them. Others should keep their distance.
STATUS: HOLD PRICE: $2.00
SEEKA
STATUS: SELL PRICE: $0.22

RAKON
27
Sharetalk
Lynas still hoping

Australian rare earths metals miner Lynas Corp (AU: LYC) has widened its full year loss but says it hopes one day to take on China as a leading supplier. Its major interest is the Mount Weld project, which includes rare earths oxide deposits located to the south of Laverton, Western Australia. The companys full year loss grew to A$107.4 million for the year to June 30, from A$102.6 million. The loss was partly associated with the extra costs surrounding the opening of its Malaysian processing plant, and finally gaining licensing, following protracted legal battles with opponents. However, the company, which also operates the Western Australia-based Mt Weld mine, says it will be a sustainable supplier of rare earth metals. It hopes its Malaysian plan will end Chinas monopoly on such materials. Rare earth metals which are used in all manner of technological devices are in huge demand and China controls most of the worlds supplies. However, demand ebbs and flows significantly and LYCs share price has done the same, rocketing at some times and plummeting at others. In the past few years, it has been in plummet mode and has lost some 80 per cent of its peak value. Whether and when it will recover some of these losses is hard to forecast, although I note the shares have risen by more than 10 per cent from their low point, suggesting the worst may be over.
STATUS: SPECULATIVE BUY PRICE: AU $0.405
LYNUS CORP
AIR profits take off

Air New Zealand (NZ: AIR) more than doubled annual profit, beating forecasts, as it squeezed more revenue from growing passenger numbers and a better foreign exchange rate. Net profit in the year to June 30 was $182 million, a 156 per cent increase on the $71 million a year earlier. Sales rose three per cent to $4.6 billion as passenger numbers increased 2.2 per cent to 13.4 million, outpacing the 1.7 per cent increase in available seat kilometres. It announced a final dividend of 5 cents a share, making 8 cents for the year, up 45 per cent from a year earlier. AIR is in a rare sweet spot at present as discounted fares lure more travellers and costs remain stable. Unfortunately, such periods do not last and one day there will be other severe strains on the business, such as high fuel prices, lower passenger numbers, international tensions, bad weather and so on. One of the problems with aviation is that it is a high cost business but revenue is variable. When passenger numbers go down, discounting goes up and all the airlines do the same on the theory that it is better to lose a small amount on each flight rather than a lot by having partiallyempty planes crisscrossing the globe. It takes a brave person to invest long-term in the aviation business (airports are much more attractive business models) but those who own shares may as well enjoy the current good times.
STATUS: HOLD PRICE: $1.50
AIR NZ
SLI Systems shrinks loss

The search engine software company (NZ: SLI), posted a smaller loss than it forecast when it came to the market in May. The company, which raised $27m in a public offer, reported a net loss of $2.01 million in the year to June 30, lower than its forecast of $2.15 million. Gross earnings of $1.77 million were smaller than the forecast $1.86 million. Revenue was $18.31 million. SLI stands for Search, Learn and Improve and has used the software as-aservice methodology since its inception, long before it became fashionable, with clients making monthly payments for this service. New Zealand customers include The Warehouse and Mitre 10 and further afield, the London department store Harrods. SLI has more than 100 staff and more than 375 client firms, mostly overseas, with 60 per cent of revenues coming from the US. The IPO funds are to help SLI recruit sales staff for the US, UK and Australian markets, as well as fund a push into Japan. The company plans to take on 50 staff by June next year. Annualised recurring revenue - what the company receives if it keeps existing customers but gains no new ones - is expected to be $19m in June, rising 35% over the next year. SLI Systems seems to be performing well and a lower loss than forecast, as well as slower cash burn, is a positive. The company has international potential but the risks are high.
STATUS: SPECULATIVE BUY PRICE: $1.90
SLI
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Sharetalk
GLL profits falls

GuocoLeisure (NZ: GLL), the diversified investment company once known as Brierley Investments, reported a 43 per cent decline in full-year profit after receiving a reduced oil and gas royalty and paying more tax. Profit fell to $43.6m in the 12 months to June. Revenue was three per cent higher at $380.3m. The higher revenue was driven by the companys hotel division, which operates the Guoman and Thistle hotel chains in Malaysia and the UK. This division lifted annual revenue by five per cent to US$367 million, helped by demand generated by the London Summer Olympics. Gambling and property development interests showed losses. The Thistle hotels group has struggled for decades and was the major reason why Brierley failed as an investment company. One longstanding issue is that the Thistle group is so large it dominates the rest of the company, and its lackluster performance drags down the overall group results. The Olympics have been and gone so the same lift in performance as modest as it was - cannot be expected again and this leave GLL with a very large, expensive asset that cant be turned around in a hurry. As an Asian-controlled and mostly Asianowned business, it is hard to see why the shares are listed in New Zealand, apart from the historical connection with Brierley. The hotels business is fickle and the company has not established a reliable track record of earnings growth.
STATUS: AVOID PRICE: $0.78
GUOCOLEISURE
Qantas takes off

Qantas (AU: QAN) reported a net profit of A$5 million for the year to June after suffering a A$245m loss the year before. Underlying profit, excluding one-off items, rose by 102 per cent to A$192m. Revenue moved up one per cent to $15.9 billion. The airline will not pay an interim dividend, for the fourth consecutive year. It also said that, as part of restructuring efforts, it will sell its defence services division to Northrop Grumman for A$80m The airline has trimmed losses in its international business and is doing well with its discount airline Jetstar, particularly in Asia. Its Australian and trans-Tasman operations are still the backbone of the business but these are under pressure from competitors and its margins were down this year. The company seems to be doing well as it restructures, not least from changing or quitting loss-making activities. The company looks set to get a boost after Singapore regulators approved a request for QANs discount subsidiary Jetstar to coordinate its services with Qantas allowing both airlines to increase efficiencies. The new deal will allow the two companies to better connect flights to and from Australia and multiple destinations in Asia.
STATUS: HOLD PRICE: AU $1.50
QANTUS
Billabong battle
A New York-based hedge fund has called for the removal of troubled surfwear company Billabongs (AU:BBG) directors, apart from the founding shareholders. Coastal Capital International, which recently bought five per cent of the company. This is the latest in a line of sagas for the company, which has gone from being a global fashion icon to near-collapse and attempts to sell it or take it private have so far come to naught. Billabong has been hurt by competition from major retailers that introduced their own surf wear brands and by its own over expansion. The brand also does not have the same cachet it once had as the 40 year-old company now faces tough competition from younger brands. The baby boomers kids dont want to wear the same gear as their fathers. Most likely, Coastal is trying a bit of greenmail but trying to upset a refinancing arrangement with another US-based investment group, Altamont Capital Partners. That deal has seen Altamont representatives appointed to the BBG board. However, the announcement has seen the share price rocket, which coincidentally helps Coastal who only bought its stake a few weeks ago. BBG shares have doubled in the past couple of months as hope builds that the company can be saved. Investors who have hung in this long may as well wait and see what happens next.
STATUS: HOLD PRICE: AU $0.39

BILLABONG
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Luxury Properties
Old& Gold
Though a relatively young country, New Zealand still has many historic buildings of character, writes DARREN GREENWOOD
f anything highlights the investment potential of older property, it must be the historic and characterful Ponsonby Villa. Once a working-class part of Auckland inhabited by many Pacific Islanders, Ponsonby is now posh, plush and trendy. Neighbouring Herne Bay has gentrifield too, pleasant enough for the most aspiring of Labour politicians. Adjoining Grey Lynn is also fashionable, especially with the latte-left. What were once humble homes for manual workers have now been lovingly restored and for the larger specimens, a million dollar price tag is barely the start of it. Some can even go for several times this. On Aucklands North Shore, Devonport has enjoyed gentrified prosperity as this naval suburb also offers some of the finest beaches in Auckland. Other New Zealand cities, most notably Wellington, likewise have their gentrified suburbs, restored colonial homes, and often a short drive or bus ride from the CBD. Ponsonby-based real estate agent Pene Milne also highlights the Auckland suburbs of Freemans Bay, Westmere, Remeura and Parnell for characterful homes built early last century. 30
But really, you can find fabulous old homes everywhere that was established early. Onehunga as a suburb, for example, was a strong settler suburb in the 1800s, she said. Milne also notes historic homesteads can also be found on large farms or stations, most typically in the high country or on the Canterbury Plains. Bays managing director Mike Bayley says there are many magnificent historic properties across New Zealand providing a link to our cultural past, many now protected. In Auckland, some historic buildings and areas of note include Victoria Park Market, which is undergoing a $20 million renovation, Britomart and surrounds, Imperial lane, the Queens Ferry Hotel, and other venues in Vulcan Lane, and from a modern perspective, the newlyrevived Auckland City Works Depot. This last complex situated on the corner of Wellesley and Nelson Streets in the CBD was purpose built and designed by Ewen Wainscott for the Auckland City Council opening in 1968. It won the prestigious New Zealand Institute of Architects awards in 1969 and 1970. Following its most recent refurbishment, the site now houses Bauer Media, as well
as some of Aucklands most hippest innovative businesses such as Brothers Beer and Al Browns Best Ugly Bagel, Bayley continued. Fellow Ponsonby-based agent Tim Irvine of Barfoot & Thompson adds that many old city villas will have been relocated from the city to the country and restored there to their current condition. Indeed, while areas like Queenstown may lack many heritage properties, especially at the top end, in Northland its a different story. Northland has many pockets of significant historic architecture, said Bay of Islands-based agent Ian Birch of Luxury Real Estate. Dargaville, Paparoa, Matakohe and Mangonui come to mind in areas where excellent examples of pre-1900 architecture still exist, he said. The Bay of Islands is home to the birthplace of the nation and some of the earliest European settlements and , of course, New Zealands first capital is here along with some fine examples of heritage buildings that have been preserved and restored. They tend to be wonderful examples of quality craftsmanship and traditional building materials such as heart kauri, Birch continued.
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Luxury Properties
Such homes have many advantages, he says, such as showing they have shown they can stand the test of time unlike some more modern examples. Many people are attracted to the character of the older buildings and the sense that these buildings can have a personality of their own. A beautifully maintained and well proportioned villa or homestead will often turn more heads than a modern home, in fact we fondly refer to them as grand old ladies! The rooms tend to be generous in size with big verandahs, wide hallways and high ceilings, he said. Its the character that buyers (especially younger family buyers) seek. They are not so cheap in the central suburbs that are in demand, however, whether a renovation project or established, character homes are sought after and seen as holding or growing in value at a higher rate. Weatherboard villas are most common , and they are seen as a easy home to modernise, and perceived as having lasted the distance of time and therefore structurally sound or easy to work with. Bungalows are considered solid or strong, Pene Milne also
explained. Mike Bayley says the character and heritage that comes with buying a historic property enables owners and tenants to feel connected to New Zealands cultural past. Heritage buildings by their nature of their construction styles or materials used, often have more character than newerbuilt premises. As with any decision, some owners or tenants prefer this in their work or living space and several specialise in the purchase of historic or heritage buildings. Equally a number of commercial tenants continue to request only character spaces for consideration, Bayley said. However, recent earthquakes have highlight a need to ensure such properties are safe, and there may also be restrictions on what owners can do with such properties. A lot of historical and heritage buildings require strengthening work to be undertaken to bring them up to national building standards. When that work is duly completed, as it has been on many projects around New Zealand, in many cases the resulting building is as strong
as their modern equivalents, Bayley continued. Looking back to the 1980s, one of the first areas to undergo historical regeneration was Parnell Village, which was the vision of Lee Harvey. The Parnell Patriarch saved a number of historic properties on Parnell Road and refurbished them into shops, thereby keeping the village feel, he said. Vulcan Lane, off Queen Street in Auckland, also includes several historically significant buildings dating back to the 1800s such as the Queens Ferry Hotel. Many of these have been refurbished over time. The lane first housed clockmakers, solicitors, a general store, flour and grain merchants and boot makers. Later, bookmakers, streetwalkers and peddlars added to the mix. It now houses some of New Zealands best fashion design stores, cafes and bars, Bayley said. Pene Milne says maintenance is the main issue for buyers to consider with such properties. When a home has to be renovated or modernised, planning and consents required will mean that the modern
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Luxury Properties
building code has to be adhered to, and approved on that basis. Some residential zones will be limited as to what you can do to some heritage homes pre-1940, and this may relate to the front of the house being kept in keeping with the neighbourhood, the type of fence (E.g picket fence), etc, she said. Ian Birch warns that inside space requirements have changed through the generations and what might have seemed the ideal layout of rooms for grandpa, may not be held in such esteem today as we crave huge kitchens and open living areas with large glass doors that open to the outside spaces. The cost of running a home has become more of an issue today, and wall insulation and double-glazing are just two desirable features that can be difficult to install in older houses, he said. Such renovations and the need to comply with various restrictions means that would be purchasers of such homes
must due due diligence on what works might be necessary along with the restrictions that might affect them, warns Tim Irvine of Barfoot and Thompson. It is crucial to check if a property is registered with the New Zealand Historic Places Trust. Extensions and renovations to listed properties are strictly controlled so buying a listed historic home will come with a serious commitment, said Birch. How much modernisation will be required to make them safer for todays tougher standards. Rewiring and replumbing can often be easier than imagined due to the way they are constructed, he said. Pene Milne agrees due diligence is needed, along with getting a good designer or architect to ensure owners get the best from the site potential and floor plan for modern day lifestyle. However, Mike Bayley warns the ramifications of the 2011 earthquake have been significant on the commercial property markets, with prices of older heritage
buildings coming under closer scrutiny from potential buyers. Those buildings with lower NBS ratings requiring strengthening workhave been substantially priced to factor in the cost of undertaking work that work to get them up to the required compliant standards, he said. That has seen some owners see a drop in the registered value of their properties. Conversely, those who have undertaken the necessary strengthening upgrades have, in many cases seen their value appreciate ahead of comparable more modern buildings, Bayley said. Birch says historic properties in good condition can be worth more than modern equivalents due to their character and because reproducing them today with the materials used would be extremely expensive. Historic homes also have more space around them, which Irvine says attracts a preium price. Like a fine painting, a classic car or treasured antique, historic buildings can reasonably be expected to increase in value as time goes by. They represent a bygone era when priorities were different and life was simpler, often warm and welcoming, they carry the patina of generations of New Zealanders, Birch added. Beauty, like investment opportunities and even personally-owned residential property, is in the eye of the beholder. What appeals to some, may not to others, concluded Bayley. People still love them! Milne added too.
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Luxury Properties
Whats out there?

16 Hope Avenue Russell Bay of Islands
$1.67 million
Ounuwhao Harding House was built in 1896 and transported, by barge to the present site in 1990. Lovingly restored back to its former glory, the exterior was stripped back to bare timber and the entire house was completely refitted giving a new life to the grand old lady as an upmarket guest lodge in 1993. Gracefully greeting visitors as they enter Russell, Ounuwhao Harding
House sits just across from the quiet waters of Matauwhi Bay alongside a grassy reserve bordered by magnificent ancient Norfolk pines. Featuring wrap around verandas, and stunning period features the charm and character are obvious before you even set foot upon the property. Inside there are 5 large guest suites, an expansive kitchen and dining room plus guest lounge and formal function room. Kauri floors and ornate panelled ceilings are just some of the features that give this villa a sense of style and quality just not seen today. Luxuryrealestate.co.nz
29 Moray Place Dunedin
Tenders close November 7

The Temple Gallery in the heart of Dunedin is a former synagogue built in 1864, and later masonic hall, that the Historic Places Trust lists the category one building as being of outstanding historical significance. The 960 square metre building on 947 square metres of land has been retrofitted into two apartments and an
adjoining fine art gallery. The imposing two storey, high-stud and plaster ceiling building, is a masterpiece of Victorian architecture. Under its current mixed-used residential and commercial format, the two apartments could be combined into one residence of considerable proportions, and the commercial premises maintained as either an art gallery or for potential conversion into a retail site, or caf. Nzsothebysrealty.com
24 Inkster Street Chelsea Bay, Birkenhead

$4.45 million
Nestled in quiet Chelsea Bay but close to Auckland CBD, this luxurious and private 444m2 waterfront home on 2277m2 of land is a lifestyle second to none. The 6 bedroom 5 bathroom residence runs to the waters edge of this secluded bay and looks across to the city and Herne Bay. The indoor outdoor flow to the north facing pool and cabana offers
a place to entertain. The main bedroom suite has stunning harbour views. There is a purpose designed dressing room but currently used as a nursery. The guest cabana is self contained, and a space of tranquility. On the lower level of the home is another full teen, guest or nanny quarters with living and kitchenette. With 1918 origins and built in the traditional style with native Kauri and Rimu construction, the sensitive alterations in 2010 have seen an increased footprint and an extensive rebuild of both the house and grounds. Milneandco.co.nz
34
Luxury Properties
31 Queens Parade Devonport, Auckland

$1.295 million
Delightful Historic Cottage in seaside location close to the heart of Devonport village. The front of the home overlooks the inner harbour and port while the rear offers a sheltered and secure, north facing suntrap. The character features remain intact with traditional timber weatherboards,
rich polished kauri floorboards and a high stud. Substantially renovated in the past ten years including rebuilding the front of the house, a new roof, insulated ceiling and installing reticulated gas for home heating and water. Three bedrooms, formal living room with wide harbour and city views. Formal dining, plus kitchen/casual dining and sunroom. Excellent dry storage and laundry below and herein sits an exciting proposition.
Barfoot.co.nz
10 Wensley Road Richmond, Tasman

By negotiation
Kershaw House is a luxurious Category 2 historic home BandB business, located central to all leading Nelson Tourist attractions, specialty local vineyards, cafes, restaurants and shops. This six-bed, five-bath 1920s 309m2 home was relocated from Nelson City in 1988 to a 957m2 plot. The benefits of being relocated are that this gracious
home has new piles, plumbing and electrical wiring. Its like living in a modern 1920s home, yet meeting many modern day NZ building standards. Guest accommodation comes in the form of 4 large guest rooms, each with ensuites. Theres a private guest lounge, dining room and sun room. Owners living quarters are private and separate from the guests.
Bayleys.co.nz
Ayrburn Farm Lake Hayes Queenstown-Lakes

By negotiation
Currently a working farm, Ayrburn Farm has long been desired in the Wakatipu. The 131.7ha farm includes the historic villa (circa 1896), the managers house and outbuildings and three consented building platforms - all included in four titles. The historic homestead boasts six bedrooms, one bathroom, a large formal
living area and nine fireplaces set within a magnificent mature garden and orchard. Additional buildings include a three-bedroom old-style farm cottage currently used as accommodation and charming traditional stone and timber farm buildings, including a working shearing shed. Known as a brown trout spawning bed, Mill Creek ambles through this picturesque property, creating a beautiful natural park like setting.
Nzsothebysrealty.com
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Integrity, honesty, value and results
37
Investing in Business
Giving heart to start-ups

Technology entrepreneur Derek Handley tells DARREN GREENWOOD how he came back from the brink of financial ruin to deliver further business success
ith the success of Snakk Media, his latest venture, Derek Handley is once again techs golden boy. But it hasnt always been plain sailing for the youthful 35 year-old, who has twice teetered on the brink of financial ruin. The first time was aged 22 and facing bankruptcy, $100,000 in dent after a disastrous gamble on the share market. The second time was at 30, when The Global Financial Crisis threatened to destroy the Hyperfactory, the mobile marketing business he had build up for almost a decade. All is revealed in a book Heart to Start where Handley, born in Hong Kong to a Malay Chinese mother and Scottish father, not arriving in Auckland until he was 13, bares his soul. The book also reveals the mistakes he made in business, proffering advice too, so other would-be entrepreneurs can help avoid similar dramas. Despite having doubts about his business acumen, Handley says he went into business because it is one of the best ways to turn visions into reality and chart your own fate. Charted his way he certainly has, with the former Selwyn College student also calling for business to develop a social and environmental conscience. Handley wont say what made him get into debt so much, but says he learnt from the experience. I learnt that taking risks and them not turning out as planned doesnt kill you. I also learnt how to be more careful, he recalled. After business ventures such as Feverpitch International, an online gambling site, to interests in the childcare and then fashion industry, Handley created The Hyperfactory, a mobile marketing company, which 38
included Coca Cola and Disney among its clients. Hyperfactory was based on months of research that told me the mobile phone would be one of the most powerful connective forces in the country. Snakk has picked up where Hyperfactory left off by driving targeted advertising across a network of millions of devices, he said. However, despite the initial success of the Hyperfactory, the GFC slowed down all revenues and cashflow. This led to its sale in 2009 and 2010 to the US-based Meredith Corporation, a deal new media has reported as valuing The Hyperfactory at US$55-US$60 million. The GFC led Handley to rethink about his priorities, and decide
business needs to consider more than just profit. Handley went to Africa to look at micro-financing that gives farmers and traders the funds to do more than just live hand-to-mouth. But it was at Sir Richard Bransons luxury resort of Necker Island, where over a glass of wine, Handley agreed to work with the Virgin chief for a year on a project that came to be known as the B Team. The project, co-founded by Branson and Jochem Zeitz, former chairman of Puma, has appointed Handley as its inaugural CEO. It also includes Arianna Huffington of the Huffington Post; Paul Polman, CEO of Unilever; Ratan Tata, chairman emeritus of the
Investing in Business
Tata Group and a cast of other leading business and political figures. The B Team is about driving business to a future of having positive social and environmental impact as much as financial profit. We are looking to uncover and back some of the most transformative ideas or models that will provide the breakthroughs needed to get us there. We need new forms of leadership to reinvent and evolve the way we do business this century and the B Team seeks to accelerate and help catalyse the movement, Handley explained. I am rapidly shifting my focus on start-ups that are focussed on creating positive social or environmental impacts as I think these are going to be the most important companies of the future. Such views were part of the reason why Handley wrote his recently released book. The books purpose is to inspire people to really think about what theyve been put on this planet to achieve, and get the to take action towards their dreams! It does this through telling my story- but also through a field guide of how to turn these ideas into action, he said. And among the advice for budding entrepreneurs is Think Big and start early. Certainly, Handley did that, with Hyperfactory being a pioneer in mobile advertising, something Snakk is building upon. He also is an investor in Booktrack, a company that has created the idea of soundtracks for books, which is also backed by Peter Thiel, the venture capital who co-founded PayPal. Handley says the capital markets offer incredible opportunities for Kiwi start-ups and Kiwi companies need to use them more often. He also says New Zealand has other companies like his in development, using the internet as their platform. Technology investments offer investors the ability to buy into the future and to get exposure to exciting opportunities. Financially, there are enormous opportunities for scale and growth- high reward but it can be at higher risk if youre not entirely sure of what youre investing in, he said. With a range of business successes behind him, Handley has been rewarded with a raft of accolades.
In 2011, he was named to the Silicon Alley100 of the most influential technology people in New York, as well as a World Class New Zealander and Sir Peter Blake Trust Leader. He is also a former NZ Herald Business leader of the Year and Ernst & Young Entrepreneur of the Year in New Zealand. Earlier this year, Handley was also named an Adjunct Professor for AUT University in Auckland, something which adds to his regular speeches around the world on entrepreneurship, marketing and digital industry. And aiming to make a difference, the
serial entrepreneur leaves with one final message. I think that people of wealth and investors today should look at how they can use their capital to help address social and environmental issues that we increasingly face. A significant component of an investor portfolio should be philanthropy that addresses scalable solutions to real-world problems, and an emerging type of investment known as impact investment that back ventures with business models aimed at a higher mission, he said
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Luxury Travel
Cruising Time
With over 200,000 passengers delivering some $310 million to the New Zealand economy, the country looks set to enjoy another bumper cruising season, but what are the options, investigates TOM THOMSON
n increasingly familiar sight in New Zealand, especially Auckland, are huge Cruiseships. Last summer, was a record year for cruising in New Zealand, with the country receiving a ground-breaking 211,430 cruise ship passenger, plus 82,683 crew, according to industry body Cruise New Zealand. Its 2012-13 Economic Report added that in the year to June 2013, cruise disembarking and embarking passengers made up 2.6 per cent of total visitor arrivals and cruise transit passengers added another 143,074. Australians dominated these arrivals at 53 per cent, with Americans making up 17.3 per cent of passengers. Together, such visitors generated 5,330 jobs and $310 million to the New Zealand economy, with just over a third of that wealth going to Auckland. Last summer, New Zealand
welcomed six new ships, including the 138,000gt Voyager of the Seas and the 122,000gt Celebrity Solstice. This year, it is expected numbers will dip towards 200,000 passengers, but among the operators, Royal Caribbean, which carries 80,000-85,000 passengers will have five of its vessels visiting New Zealand. Princess Cruises is another visitor, with 11 per cent of its 1.4 million visitors on board Princess ships, including Princess Dawn, Sea and Sun, cruised in New Zealand and Australian waters. Six brands will be operating in New Zealand over the coming season, Princess Royal Caribbean, Celebrity Cruise Lines, Holland America, P&O Australia and Carnival. Typically, the vessels head to New Zealand waters as they are following the sun, leaving the Asian markets served during the Northern Summer for New Zealands own summer season. Crystal Morgan, director of market planning for Princess Cruises described New Zealand as a marque destination, with a variety of tourist attractions, plus good ports suitable for large vessels.
If youre looking for a relaxing cruise, then a short duration cruise around Australia, the South Pacific or New Zealand could be a great option
Tourism operators list the ports of Auckland, Tauranga, Napier and the Marlborough Sounds as common desti40
nations for inbound cruise ships. Some also enjoy a peek at Fiordland, where you cannot stop over, as they crisscross the Tasman or circumnavigate New Zealand. They also say cruising has boomed in recent years, with the South Pacific the top destination for Kiwis and Australians, thanks to the variety of ships departing out of New Zealand and Australia. A strong dollar is also helping Kiwis fly further, with luxury river cruises in Europe increasingly popular. Jessica Allan, brand leader for Cruiseabout, which offers more than 70 different cruise lines, likens cruising to the tapas of travel as you can choose any size of ship you want and any destination. For instance, if youre looking for a relaxing cruise, then a short duration cruise around Australia, the South Pacific or New Zealand could be a great option. If youre looking for adventure, then there are luxury cruise options that everywhere from the Galapagos islands to Antarctica, she said. An attractive component of many of
Luxury Travel
the luxury cruise lines is the complete all-inclusive nature with not only your travel, accommodation and meals included, but all of your drinks and on-shore excursions as well, Allan continued. Sue Farley, Nelson-based travel specialist for Travel Brokers, confirms cruising is booming with huge megaliners and apartment ships increasingly travelling around the New Zealand coast now. Some are stand-alone New Zealand cruises and others hop across the Tasman from Australia on a larger itinerary- a few days at sea without landfall is always a great feeling. Some are very small ship cruises that explore one region or take the time for fishing excursions or diving. All these cruises cover the range from economy to luxury, she said.
tion, educational or cultural focus, a golf cruise maybe, or a cooking cruise where they can work beside the chef in cooking workshops, she said. Some choose their cruise by the shore excursions they can do. Once again these are often themed so that the cruise may interest people in archaeology, animal preservation or volcanoes perhaps. Some people like to be on a ship with a helicopter available for less accessible locations. Wildlife cruises are also popular and those where the passengers can also be involved in meaningful volunteer research or preservation work are particularly so. Many luxury travellers are happy to join very small ships with as few as 20 passengers for an exclusive stay with very personal service. Superyachts can have just ten passengers on board, or be chartered exclusively, Farley continued.
Some choose their cruise by the shore excursions they can do

The travel agent of 17 years focusses on luxury and boutique eco travel and says those with the money can go anywhere, citing Canada, Alaska, the Caribbean plus newer options in the Baltic Sea, Antarctica, the Black Sea and Eastern Asia. And its not just the exotic destinations that are so alluring but the ships themselves which provide luxury options and superior hospitality. There are cruises promising 5, 6 and7-star facilities and service- whatever that really means, she said. Farley says luxury travelers tend to be quite discerning, preferring smaller ships with more intimate surroundings, meaning shorter queues and a better staff/passenger ratio. They will often opt for a cruise with meaning, that is, one with an expedi-
erard Murphy, director of Bon Voyage Cruises and Travel in Parnell has been in the shipping and tourism industries all his working life, since starting out in the Auckland office of P&O in 1979. But for the past 20 years has operated his own travel agency, aiming to survive intense competition and online buying by specialising in high end business, luxury travel and cruising. Murphy says his clients focus on the destination, especially somewhere off the beaten track and beyond the main ports. Many Kiwis, he says, start their cruise career with the mainstream cruise brands and do a basic cruise around the South Pacific. Once hooked, as most will be, they tend to look for quality in ships and cruise brand and start cruising further afield. So the progression may then be from South Pacific, New Zealand and Australia, Alaska, Mediterranean,
Northern Europe, the Black Sea, then on to exploration type cruises in destinations such as South America, the Galapagos Islands and Antarctica, he explained. Murphy says cruise ships have grown larger over the years, with the mega ships carrying 4,000-6,000 passengers, with huge activity, entertainment and eating options. Here, the ports of call are less important as the holiday is on the ship. Many of the newer ships are around 130,000-150,000 tons and carry 2,500-3,000passengers and the emphasis is on quality of design, dcor and cuisine. Many will have traditional dining rooms plus smaller speciality restaurants, often having signed up celebrity chefs like Marco Pierrre White to design menus. While there are larger ships like Cunards Queens, luxury vessels tend to be smaller, from 15,000-60,000 tonnes carrying between 200-1,000 passengers. Our clients travelling on these ships like the more intimate atmosphere, larger cabins and suits super cuisines, he said. Murphy says the newer vessels start out in the more mature North American and European markets, with the older vessels displaced to newer destinations around the Pacific Rim. Chasing the summer also means ships cruising Northern Asia and Alaska will migrate to Australia and New Zealand for our summer. This has meant over the past few years we have seen an explosion of capacity over summer with ships deployed on New Zealand and Australia cruises and with competition heating up, the cruise lines are also sending some of their newer larger vessels. Coupled with that, a growth in world and long distance cruising has seen an increase in visits from some of the larger ships and smaller luxury exporters, he said.
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Luxury Travel
hile many cruises are sold on the ship, Aaron Russ, manager of Christchurchbased Wild Earth Travel says it is the destination that sells for his clients, along with the experience. The leader of many expeditions recently attended a cruise expo and says those seeking simple South Pacific cruises are not his target market. But the expedition market now offers luxury too, even in the most remote of places, making them suitable for people of all ages. Twenty years ago in expeditionary travel you had to rough it, but now there are luxury options. The boundary of what people are looking for is constantly being pushed out. What was remote ten years ago, isnt necessarily so now, he said. Newer destinations include Russias Far East, West Africa, the Black Sea and the North West passage above Canada.
Twenty years ago in expeditionary travel you had to rough it, but now there are luxury options.
The big thing that we keep stressing to people- and I have led expeditions where the clients are into their 80s- you dont have to be 20 and able to climb every mountain, he added.
Jessica Allan
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Luxury Travel
A lasting Heritage of adventure

Twenty-five years ago biologist Rodney Russ launched a small family business in Christchurch as a way to create wilderness ambassadors who would advocate and support conservation efforts. The result is Heritage Expeditions, an internationally recognised leader in expedition cruising and responsible travel. The company pioneered expeditions to the SubAntarctic Islands of New Zealand, the South Pacific, the Ross Sea region of Antarctica, and more recently, the Russian Far East. Heritage Expeditions operates its own research vessel, the Spirit of Enderby, which carries just 50 passengers, in line with Russs original commitment of a small ship experience allied to conservation through experiential learning.
This year, heritage celebrates 20 years of expeditions to the Ross Sea and it also runs regular voyages around the SubAntarctic islands of Australia and New Zealand, to showcase it vast array of wildlife, including albatross, penguins, petrels, elephant seals, fur seals and more. Further north, are trips to Papua New Guinea, the Solomon Islands, Vanuatu, Fiji and Tonga and more recently, trips to Russias Far East. Two decades after the collapse of the Soviet Union, the once top secret Russian Far East remains largely unexplored. This isolation has protected the worlds best kept secret- it is one of the last remaining pristine and most wildlife-rich wildernesses on earth, said Heritage spokeswoman Cassia Jackson.
The real focus and emphasis of every expedition is getting passengers on shore as often as possible for as long as possible with maximum safety and comfort
Heritage customers are expeditioners, interested in natural history, photography and wildlife. Many are regulars, often retired or semi-retired as some voyages can take 30 days. They are predominantly English-speakers from New Zealand, Australia, the UK and
Europe, with camaraderie fueled by the vessel holding just 50. Jackson stresses the voyages are not luxury cruises, but very much expeditions. But the Spirit of Enderby was refurbished in March 2013 to provide comfortable accommodation. There is also a combined lounge/bar/library area, a dedicated lecture room; plus excellent cuisine prepared by top Australian and New Zealand chefs. In March 2014, the ice-strengthened vessel, built in 1984, heads off to New Zealands remote islands, including the Antipodes, the Bounties and the Chatham and Pitt Islands. The one off trip takes 11 days and is priced from US$5,250 per person triple share. The real focus and emphasis of every expedition is getting passengers on shore as often as possible for as long as possible with maximum safety and comfort. Our expeditions are accompanied by some of the most experienced naturalists and guides, who have devoted a lifetime to field research in the areas that we visit, Jackson added.
At LCNZ we aim to deliver boutique cruises that delight our clients and are remembered as an experience of a lifetime. We pride ourselves in giving our customers an unforgettable cruising experience. info@luxurycruisingnz.co.nz cell 022 3977071 www.luxurycruisingnz.co.nz
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Luxury Travel
THE Princess of the seas

Coral Princess Cruises operates trips around Australia, New Zealand and the South Pacific. The Australian company has operated for 30 years, using smaller ships with a 45 or 72 passenger capacity, allowing them to go to shallower waters where larger liners cannot. General manager mark Fifield describes the trips as expedition cruises which include lectures and visitations for the guests.Passengers tend to be aged over 40, people looking for a nature aspect, finding out the cultures, the wildlife and geographic aspect of the places visited. The Great Barrier Reef trips tend to attract mainland Europeans the British, while the Kimberley and papua New Guinea trips are most popular with Australians. The New Zealand trips tend to attract mainly Australians, British, Americans and mainland Europeans. They are to places you cannot get to by road, such as the Marlborough Sounds, Stewart island and the Doubtful/Dusky/ Milford Sound regions. Fifield says Coral Princess Cruises
constantly upgrades its products with a new ship five years ago, and new destinations, such as Indonesia for this this year. We do a lot of excursions away from the vessel to get the close experience. We are going to places where people havent been before. We land and meet with the locals, tread on new ground, deal with unique local cultures untouched by tourism, which is a very special experience, he said. Such trips cost A$9,000-A$20,000 depending on the duration, around A$800pppn. The tourism industry has been tough but we are still going. I guess our differentiation from luxury cruises is while we offer comfort, five star delivery and service, it is not dress ups and suits, its an informal experience. Its also a fantastic way to experience culture and nature, Fifield added.
They know what they are looking for, they want smaller ships, superb cuisine, comfortable cabins, interesting itineraries,
Gerard Murphy
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Luxury Travel
Island Escapes with helicopters

Peter Bissett has been operating Island Escape Cruises since 2007 using the 24 passenger vessel Island Passage that was purpose built in Nelson. The family-owned Kiwi business started after the former shipping company owner was bored with retirement and thought cruising was a way to show beautiful New Zealand to the world. The guests are 30 per cent Kiwi, 40-45 per cent Australian, with the rest from Europe and the US. They know what they are looking for, they want smaller ships, superb cuisine, comfortable cabins, interesting itineraries, Bissett explained. We decided to have a helicopter on deck and it gets used a lot. If guests want to spend an afternoon at a vineyard or golf at Kauri Cliffs, the
helicopter is there. It becomes a very important toy sitting at the back of the ship. We can do whatever guests want, he said. This includes taking the guests in comfort to places which have never been explored, or are isolated like Fiordland in New Zealand. Chefs trained in Paris and excellent wines confirm the comfort. New intineraries have been devised to ensure theres always something new. Voyages to Vanuatu were developed to give a winter market for the vessel. Clients love it there. Theres the culture, the beaches and the local
population are rated as the friendliest in the world. Its a dream destination, Bissett said. In November, trips around the absolutely magnificent wilderness areas of Fiordland will be launched. Then, in the New Year, will be the regular cruises around the Bay of Islands. Such trips typically work out at $800$1,000 pppn. We have nothing in common with the large ships. We are very niche but we have customers who keep coming back. Every new itinerary is very popular, Bissett added.
Aaron Russ at the helm
45
Art Leasing
A Pretty Good Return

Leasing works of art pays off in so many ways, discovers TOM THOMSON
f you dont know what work of art to have in your home or office, then art leasing presents an option. A range of companies offer a service where clients can rent or lease artworks for as little or as long as they like. It means that rather than stumping up thousands upfront, a quality work of art can be obtained for a nominal weekly fee. And as a business expense, it is all tax deductable. Among the companies serving New Zealand is Art Associates, which for over 20 years has provided individuals, businesses and other institutions affordable access to more than 370 contemporary artists either emerging or well known from New Zealand or across the globe. Art Associates also promises a huge selection of original art works, including paintings, sculptures and works on paper in a range of sizes and styles. Even older is Art Rentals (NZ), which started in Hamilton 40 years ago, before moving to Christchurch four years later. A recent arrival is GibbsLang Contemporary Art Gallery and Studio, which opened just outside Matangi Village, near Hamilton, just over seven years ago. Art Associates director Jade Bentley says leasing art is an easy and effective way to enhance a home or business. Her consultants can come and visit a property and ascertain customer needs giving onthe-spot advice. Having years of experience as an art consultant, our clients have appreciated having a new eye to look into the space and create the look, solving any placement issues, complementing the surroundings and bring the complete environment together, she said. Doreen Hawkins, director of Art Rentals, says her company similarly takes the stress out of choosing artworks for her clients needs. Indeed, it was through working as a PA in London, that
Hawkins learnt how to care for peoples needs. It was there that I saw how artworks made a difference to the look and feel of a property and have continued to use that as a goal over the years, she said. The GibbsLang Contemporary Art Gallery only leases the works of Colin Gibbs. Our business is special because the works leased are only those of Colin Gibbs, and the people who lease get to meet the artists and hear the stories behind the works. This is important because when an artwork is hanging in your foyer, boardroom, show room, office space, reception area or home, visitors will often ask about it. People enjoy being able to tell visitors who the artist is, that they have met him, and what the painting is about and how it was made, explained manager Catherine Lang. Having works by the same artist, although from a different series, can help bring a sense of unity to your premises. One Auckland corporate has had paintings from several different series at the same time in their large showroom. It created a sense of continuity, a sort of gelling together of the space, to make it feel more intimate and less intimidating to customers. Art Rentals also serves a mainly corporate market, offering artists including Colin McCahon and Ralph Hotere. These works make a difference to how people feel about their work or home environment. One of our briefs was to help the staff of a State Owned Enterprise transition into a corporate entity by helping to change the culture, said Hawkins. Art Rentals normally works on one or two year contracts, though Art Associates typically rents on a three-monthly basis. Our simple lease fee covers consultation, delivery, installation and a lease period of up to three months. In some cases a consultation fee may also apply. For businesses, either in a commercial premise or
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Art Leasing
home office the leasing of art works is a tax deductable expense. In addition, we can also arrange the curating, framing/reframing or installation of any art works you may own, Bentley said. Although the corporate and hospitality arena are still our most popular clientele we are finding an increase of domestic clientele interested in art but are not ready to invest in
pieces that they are not sure of. The leasing process allows the client to lease an artwork on a three months basis with the idea that they can continue with a particular piece, change for another or effectively want to keep the piece and buy, Bentley added. GibbsLang serves corporates too but is also finding success leasing to people who want to dress their homes when they put
them on the market. We can go to premises, photograph blank walls and then provide images of what different paintings will look like situated on their walls- a virtual gallery if you like, said Lang. Her customers also want to try before they buy, with some also wanting to change art work regularly to update, refresh or simply
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Art Leasing
stimulate thinking and energy. One recent instance was a firm that moved premises, who had had a very large diptych in their clinic waiting room, but the new premises did not have such a large single wall. We were able to provide a smaller, similar work for them to maintain their branding and also to provide reassurance and familiarity for patients, she said. Lang says those thinking of leasing art for domestic settings are often nervous about the size and the colour of what they choose.
Many people do not think they can fit a large painting into their homes. We have a try it out and see approach, where people can come to the gallery, select works and take them home (Or have them delivered if theyre large) and live with them a few days to see how they feel, she said. GibbsLang says leases can be as long as customers like. One apartment building in Auckland has had the same paintings in its foyer for ten years. Everybody loves them and the
bodycorp does not want to part with them! Lang continued. Costs vary according to the size and the value of the work, starting from $90 plus GST for a small work for 12 weeks. Having original art work in your workplace enhances the environment for employee, board members and all those who visit the premises. The same applies to original art work in private homes- wellbeing is enhanced by beautiful things, Lang added.
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Mobile Art for as long as you like
or Sarah Twist, there's nothing like a loaned artwork to brighten up an office or corporate foyer. Sarah is one of the consultants for Mobile Art, which for the past 36 years has operated in an upmarket gallery in Central Auckland. As well as a leasing or rental service all works in the gallery are available to be purchased. While art can pay off as a sound investment, it is often more feasible for companies to hire artwork. Having an artwork in your boardroom or foyer will add instant value to any business, the corporate world is a big area for us but we also specialise in residential properties as well , Twist said. One of the major advantages of leasing art is that you can have high value paintings on your walls for a fraction of the cost of buying. It's a great way to try before you buy and should a client decide to purchase the
artwork within a month of hiring, the rental paid already will be knocked off the bill, she continued. Leasing works of art has tax advantages as well, making it even more beneficial for business. Mobile Art promises an extensive collection, with most of its artists having qualifications such as a Bachelor of Fine Arts. The paintings include 'something for everyone' and range from $1,000 to $30,000 buying price. The really great thing is that it costs the same to rent a $25,000 painting as a $1,000 piece. We do it on size not the value of the painting. You can have this amazing art without the exorbitant cost. Mobile art is always covered by insurance, Twist continued. We have works by Luise Fong, Ian Scott, Cristina Popovici plus plenty of other established and emerging artists who are ones to watch.
We specialise in big works, large paintings for foyers and large halls. If you have a huge foyer space, we have the capacity, we have the van and can make it work in any space, she said. Rental or leasing periods can be short term for up to a month for circumstances like homestaging or a big event . Long term rates start at $15 a week, plus GST. The team at Mobile Art Gallery also change work out periodically keeping your space up to date. Selecting artwork for your home or workplace can be a daunting task so at the Mobile Art Gallery the experienced consultants are with you every step of the way. They provide a full consultancy service from first phonecall to completed installation. There are exciting times ahead for the Mobile Art Gallery. Sarah says the best part of the job is seeing people energised when their homes and offices are brought to life by our beautiful works of art!
Small Medium Large
Artwork up to 80cm Artwork up to 120cm Artwork up to 130cm
From $15 per week From $20 per week From $25 per week
Mobile Art Gallery Zone 23 G01/23 Edwin St Mt Eden, Auckland New Zealand.
09 630 6543 info@mobileart.co.nz www.mobileart.co.nz
49
Tourism
New infrastructure needed for tourism growth

Confidence is growing in the market, writes MARK BURKE-DAMASCHKE
t has been predicted by MBIE (Ministry of Business Innovation & Employment) that international visitor numbers and spending will grow substantially between now and 2019. We have already seen significant growth in the Chinese visitor market in the past year which (year end February 2013) is up 37 percent. It has been estimated the Chinese international tourist numbers could grow 50 percent by 2015 and a further 50 percent by 2017. This anticipated growth in international tourist numbers to New Zealand from all countries will result in new infrastructure development being required. Confirmed to date are three new hotels in Auckland: Reserve Bank refurbishment for a 3-star, 135 room hotel A 3-star hotel on Albert Street, and A 250 room (est) 3-star hotel at Wynyard Quarter.
In addition, the 187 room Copthorne on Quay Street will be converted to a 3star Millennium Hotel well before the National Sky City Convention Centre opens. All of this new, exciting development is close to the harbour front and some right on it. Aucklands waterfront holds some of the countrys leading tourism hotspots Wynyard Quarter, Viaduct and Britomart. Further development in these locations especially Wynyard, will create more infrastructure growth. In Wellington, a 140 room 5-star Sofitel is being developed. The hotels in Christchurch are
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Tourism
coming back. By 2016 it is anticipated that hotel numbers will be almost back to pre earthquake levels (3,000 rooms). If not, they will be by year 2017/18 when the Christchurch Convention Centre is planned to open. Up to six potential hotels will reopen / open in Christchurch over the next three years. Already this year has seen the opening of the 171 room Rendezvous in May 2013, and in September 2013 the 155 room Novotel will open. Accor, New Zealand and the worlds largest hotel company, reopened the 154 room Ibis Hotel in August 2012 and the Novotel 12 months later, both in the CBD. Late in 2013, it is anticipated the 138 room Latimer Hotel will reopen. A new design was submitted by Grand Hotels International in August for the Hotel Grand Chancellor site. Opus Architecture believes (and the data confims this view) that international tourism is coming back to Christchurch. The earthquakes of 2010/2011 in Christchurch have softened tourism to the South Island, mainly due to the lack of hotels / accommodation in Christchurch. New Zealand has two major Convention Centres which will be developed over the next four years. Sky City National Convention Centre
3,500 attendees, and The Christchurch Convention Centre 2,000+ attendees. These two international standard Convention Centres will create a major step change for New Zealands tourism. Firstly, as a nation we havent previously been able to attract conventions of this scale (and the necessary investment required) to New Zealand. These will be new tourists and international convention delegates which are the highest spending tourist sector. Secondly, major convention centres attract a lot of infrastructure (and associated benefits) around them. A convention centre must have sufficient hotel rooms in close-by location (a success factor for a major convention centre is many hotels within walking distance of 3.5 to 4 to 5 star hotel rating and international brands). International hotel brands are important as they attract international convention delegates. Convention delegates and PCOs (Professional Conference Organisers) will only be comfortable booking accommodation if they know the brand and as long as it is an internationally-recognised brand. Convention Centres do not operate in isolation. They rely heavily on support infrastructure, particularly accommodation, transport and hospitality. And, it goes without saying, prudent
investment. Major infrastructure will develop around the Sky City National Convention Centre; cafes, bars, boutique accommodation and retail. Already plans are in place for new developments. Some developments are already in place. Just months ago the City Works Depot opened with bars and cafes including Al Browns Ugly Bagel Cafe and the Food Truck Garage. This overall site has become an attraction. The tourism infrastructure in and around the Christchurch Convention Centre Precinct in the CBD will be extensive with the cafes, bars, attractions and retail these will all be new. The location of the new Christchurch Convention Centre precinct is unique. It is right in the heart of the CBD and will create its own precinct development. The all-new precinct will be within 2-5 minutes walk to six or more international brand hotels and an array of hospitality, entertainment and retail outlets. New tourism infrastructure may also develop for pre and post convention tourism as Christchurch is on the doorstep of the South Islands leading attractions. Mark Burke-Damaschke is National Manager, Opus Architecture (New Zealand)
51
Company Profile
Kiwi gins new tonic

A family-owned gin company in South Auckland is about to hit the big time with its Pacific-themed gin, reports TOM THOMSON
nthony Sexton might have a job many of us can only dream of. For ten years he was chief taste tester at his fathers gin company, but now due to his dads ill health, he is running the company, with the task of taking Vaione gin to the world. John Sexton started making gin after 1996 when New Zealand changed its regulations, allowing gin to be distilled at home. Sexton senior bought a basic still and started developing the gin, using the meticulous scientific experimentation skills he gained from running several manufacturing businesses producing industrial epoxys. Made in a Greenlane garage, the gin gained instant success, gaining gold best in class and overall master distiller at the 2008 National Stillmaster competition. However, it has only been on sale since early this year. Our gin has a unique citrus taste, which blends well with its juniper roots. Unlike most other gins, we use fresh fruit rather than a dried citrus peel which gives it great taste and texture. We use only the highest quality ingredients/ethanol and we dont use any artificial flavourings, Anthony Sexton said. Vaione gin is also distilled four times, twice in the continuous column still to rectify or purify alcohol, and twice more in the pot still after the critical mix of up to a dozen flavourproducing herbs- called the botanicals and dominated by juniper- have been added. Most commercial distilleries distil their gin only once or twice to produce an ABV (alcohol content by volume) of around 40 per cent about the same as Vaiones 42 per cent. 52
The super-premium gin is aimed at the high-end aged 25-plus market similar to the Bombay Sapphire/ Lighthouse upper end of the premium quality gin market. We are quite different to Gordons/ Lighthouse that are more traditional style gins and floral heavy. We are also unique against Bombay with its more peppery tastes. Our botanicals are not only different but we go through a number of processes to ensure that we have the smoothesst product available. You wouldnt drink most gins straight but Vaione has been designed to be drank this way whether thats neat or over ice to the consumers preference, Anthony continued. However, taking the gin to the world has been delayed somewhat due to the Global Financial Crisis. John Sexton had sought a few million in capital to achieve that goal, but despite gaining many tyre kickers he was unable to gain funding for his startup enterprise. It meant John stumping up much of the necessary cash himself, but alas he has been unable to pursue his goal, leading to son Anthony to take over. Anthony had graduated with a BCom in Marketing from the University of Auckland and had spent a few years as a buyer for Officemax, which saw him involved in all aspects of sourcing and marketing of various product ranged. Coupled with learning all about gin from Vaione, this gave him sufficient skills to take over dads business. This included following a business plan, as laid out by his father. However, progress hasnt been easy, not so much from the taste perspective, but rather business bureaucracy and the rules and regulations involved in setting up a distillery. With that up
and running and capable of producing 2500-3500 bottles a month, the biggest challenge now is getting the word out. This often includes sacrificing Friday nights to stand in a cold liquor store to get just a few more people interested. With regards to the initial business plan, the premise is just the same. Because we have not had the initial funding we have had to knock back some of the bigger expenses and marketing costs in favour of good old fashioned knocking on doors and talking about it. We are also creating some interest through social media and other contacts in the media industry, Anthony continued. At present, Vaione gin is distributed throughout Auckland with it stocked by 35 outlets/bars and restaurants, with further expansion planned to tourist
Company Profile
centres for the summer. Events like the Food Show delivered much profile and Vaione will also attend the Taste Auckland 2013 event in November. It has also started selling to the Pacific Islands playing on its Pacific theme. A delivery to the small island of Nuie, where Johns parents came from, also sold out, leading to regular deliveries there. We have just had two shipments land in Rarotonga and Vanuatu respectively and we are in discussion with a number of other Pacific islands, Anthony continued. Talks are also underway to distribute in China and other parts of Asia, along with preparations being made
to see what is required to take the gin to the United States. All this costs money, which is why Vaione is looking to produce a cheaper gin in time for the New Zealand summer, one sold in a smaller bottle, which will open up more markets in Australia and Europe; plus there are plans for related craft products using similar ingredients. However, there is still a need for investors. We require additional funds to assist in more targeted mainstream marketing and PR as well as assist us in exploring opportunities in larger markets such as the United States, England and Asia. We are
particularly looking for people that may be able to assist with distribution/ sales/ marketing opportunities. We are seeking $540,000 for 40 per cent company shares and in return they will get a seat on the board and therefore a say in the direction of the company, and at a later stage, a share in the returns or sale price, Anthony continued. The team at Colonial Commodities NZ are committed to growing Vaione into a global brand and will continue to focus on export markets. We will continue to ensure our product is of the highest quality and would love to bring investors on who are as passionate about gin as we are, he added.
The guys at Vaione Gin have supplied as with some of their delicious gin to pass on to you, our reader. To enter all you need to do is answer this simple question below and send it via email to: editor@acornpublishing.biz by November 10.
What famous phrase referring to Gin was coined by British soldiers defending Antwerp from a Spanish invasion in the 1600s?
The lucky winner will be announced in our December/ January issue.
53
Wine
X-Factor Wines or Wines of MANA

Mana, its the x-factor, that unknowable quality which compels attention and inspires devotion, writes TIMOTHY GILES
Mana is then an appropriate name for a collaborative group representing exciting and in my opinion leading winemakers from our largest wine-growing region. In this context MANA, an endemic, native NZ word is taken as the collective name for Natural Winemakers of Marlborough. It is a good fit. These are producers with passion for the unique attributes of Aotearoa and who are committed to bottling its essence There are just seven members of MANA, Huia, Herzog, Seresin, TWR (Te Whare Ra), Fromm and two producers Ive recently praised in these pages Clos Henri and Rock Ferry. I have long been a particular fan of Huia, Seresin and Herzog, wines I look for in every vintage. Their wines are characterised by consistent excellence and just as importantly by individual and distinctive attributes of flavour, taste, texture and style that tell a tale of a particular season in their small part of the planet. Each one is happy, even eager to stand out, pushing their own expectation and invite the wine-loving palate into rewarding experiences. MANA has a stylistic and ethical winemaking mission to create truly expressive and unique wines believing that less is more, the less the soil, grapes and wines are artificially manipulated, the more the wines can express where they come from. Well, to take another word for our native and endemic language; Tautoko. Or in English, Here, here! To get there MANA members have committed beyond the industry benchmark in NZ of sustainable winegrowing to produce Natural wines which in their definitone means that all members practice organics to improve wine quality as well as for environmental reasons, and are either in conversion or certified organic under an independently audited programme. There are a number of collaborative wine industry initiatives from regional marketing to smaller alliances such as the Family of Twelve (see familyoftwelve.co.nz) and all are to be applauded. MANA members I have followed for years have long held clear and passionate beliefs about the need for and rewards of collaboration. Late last century Huia co-founder Claire Allan was key to saving the Marlborough wine festival that was in danger of collapse. Despite the demands of raising kids and Huia itself with her husband and winemaker Mike Allan, Claire put in hours of unpaid and largely unacknowledged work to ensure the festival survived. When I asked her why she did this when it had little benefit for her or Huia Claire told me You dont succeed alone. We grow in a shared climate, shared soils. We all make our wines in common or at least alike conditions. We can strive on our own but to thrive, we need to be together. This is the passion that collaboration is made of. With MANA Huia have found inspiring collaborators. Hans and Therese Herzog, outstanding winemakers and owners of what in my opinion is New Zealands finest restaurant. Having searched far and wide before bringing their impressive European heritage of winemaking and hospitality here and specifically, to Marlborough. Not many vintages after their arrival Hans told me I looked around the
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naturalwine.org.nz
world before finding this spot. I am happy here, I make this my home and my focus. His focus is evident in superb wines and their commitment to excellence benefits MANA. As Therese Herzog explained. It is hard to be truly world class here, but it is hard anywhere and we are choosing here. We think we are on the right path and we have wines that make us very proud and very happy too. Her wines make me happy and every time I pull one from my cellar, just a little proud of my foresight in putting it down a year or six back. There is a heart to MANA, an ethical one, based on organics and perhaps a little evangelism too. Seresin is in my view a taonga, an environmental treasure. When in Marlborough I suggest you book a tour of this slice of biodynamic brilliance (go to seresin.co.nz). With any luck you will get to speak with Colin Ross the Estate Manager who sees Seresin as an eco-system of its own and our aim is to make a net contribution from our labourers. Personally Im hoping that part of that netcontribution will be to infect those beyond our gates with the same passion for the environment, for nature and for what we create, for everything produced not just what you sell, everything, warts and all. What we leave, he concluded. I cant think of better company to keep than these people of better wines to drink. Kia Kaha MANA.
TASTING NOTES
Huia Gewuztraminer 2010 The feather of the beautiful, always rare and now extinct Huia was used as a sign or chiefly status and it is how I see this wine. Consistently heady withe aromatic appeal, soft ripe fruits and spicy turkish delight. It has heart too, bit enough for any food a flavoursome wine, dry in character lush in nature. Huia Pinot Noir 2010 Marlborough offers NZs best value pinot noir, with the seductive mix of savouryearthand sweeter notes from perfect ripening available at prices well below foreign and much local competition. This is a Floyd Mayweather pinot, taut and athletically structured it has the grace and enigmatic power to delight immediately delight and grow more fascinating with age. Herzog Spirit of Marlborough 2003 Yes the vintage is correct. Get a wine already aged to perfection, the lauded blend of merlot cabernet sauvignon and cabernet franc combines to create a balanced and supple mature red. Rewarding the labours of a visionary couple Spirit deserves long, relaxed contemplation. Let the wine open up over an evening alongside flavoursome meaty fare, savour this and give thanks for the vinous lure of Marlborough.
TWR Riesling D 2013 Old vines (from the late70s and 80s) create a wine that zings with youthful exuberance and looks likely too for some years yet. Dry as hot riverstone it is fragrant and lifted it is like a ballerina, dances on the palate with a delicacy that hides its sinewed strength and power. A fine example of the potency of heritage in the hands of nature and riesling enamoured winemakers.
TWR Toru 2013 Te Whare Ra was a Marlborough wine pioneer, brave and gutsy wines ahead of the consumer and at last we have caught up. Passionate and skillful young winemaking couple Anna and JAson Flowerday bought and revitalised TWR. Toru is a blend of riesling, gewurztraminer and pinot gris that flexes and ripples with a layered appeal to tease and please every palate.
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Investing in Wine
A fine wine investment

If you have the bottle, investing in wine might be to your taste, writes TOM THOMSON
n an era when interest rates are low, the thought of gains from grapes has its appeal. As a small economy, New Zealand is spared the specialist investment companies that serve this fruitful sector. This is perhaps a good thing too, as British investors, for example, have been ripped off by fraudsters. Brother and sister Daniel and Dana Snelling duped 100 people into investing a number of bogus wine companies, where they were promised a huge cash return. The scam focussed on the pair purchasing large quantities of Italian and Australian wine which was to be stored and shipped before being sold at a profit. The pair have pleaded guilty to their $10 million scam and Daniel was sentenced to 7.5 years, Dana will be sentenced in October. Despite such risks, there remains the potential for profit, especially if you use a reputable broker or merchant. The Financial Markets Authority does not consider wine as a security under the Securities Act, which may weaken investor rights. But at least a New Zealand-based broker or merchant should prove safer than some overseas-based wine fund. Fine wine auctioneers and retailers says top end wine prices have been rising in recent years, fuelled by demand from China. Auctioneers Webbs stages wine auctions about every six weeks, with its next on November 04. Wine director Simon Ward says says wine has become a serious investment 56
opportunity, outperforming more traditional investments. But only small proportions of wine are suitable for such investments, most notably Bordeaux and Burgundy reds from France. But there are also wines from Italy, Spain, Germany and the US that do well; and in our part of the world, Australias Penfolds Grange has also significantly grown in market value. The best New Zealand wines are also starting to show potential, he says. Jeff Poole, owner of the Fine Wine Delivery Company, agrees the best
investment wine comes from France, particularly those bordeaux and burgundies. As vintages are released, values are highly influenced by ratings from authors such as Robert Parker or Britains Jancis Robinson. For New Zealand to access the best and most expensive wines, companies like his must form relationships with the locally-based negociants or wine dealers, Poole continued. Recent years have seen the Chinese buy up large, which pushed up prices, though Chinese interest has now
stabilised. The Fine Wine Delivery Company offers cellar services, Poole says, which allows wine lovers or investors to safely store their wines. Such storing safety/reputation or provenance enhances the value of a wine as people will know it has been kept properly. Even a drive in a car boot for a few hours on a warm Auckland day can severely damage a wine and its value. Recently, the Fine Wine Delivery Company sold a few customer collections with people getting some good returns across the board. They werent serious collectors but their story highlights that if well advised, wine investors can beat the returns given from gold, silver and other products. Ward also says it is essential wine investors take advice. He says there have been some standout investments such as Chateau Lafite Rothchild, but vintage port has not performed well, despite its high quality. You can buy great wines from 1977 and 1985, etc, at what could be considered bargain prices, he said. Poole notes local wines like Trinity Hill Homage Syrah, plus leading pinot noirs like Felton Road, Pyramid Valley and possibly Neudorf also have future potential, especially as our plants are getting older, producing better and better wines. He agrees the best investments
have been the French Bordeaux, such as Chateau Lafite, Chateau Latour, Mouton Rothschild and Chateau Margaux. One that shot up the most driven by massive Chinese interest is Chateau Lafite but the Chinese are starting to lose interest in it because of counterfeit bottles. I have heard 4-5 times number of bottles of Lafite is sold in China than the chateau supplies, suggesting for every bottle that is real, four are not, he said. Now, the Chinese are turning to Burgundy, paying up to $14,000 a bottle. The best wines can last for decades, with some great bordeaux still drinkable after 100 years. Proper storage is essential to help a wine live long. Its like the sharemarket. If you are in it for a long time, the value comes back, he said. Poole advises potential investors work closely with a respected merchant to get the wines they seek. Unless you are a determined investor, you are not in a position to make the right judgements as to what wines to collect. he said. Like all investments, theres no guarantee however unlike other investments if things go south, at the end of the day, youve still got something to enjoy! continued Ward. Correct storage is obviously key to maintaining the condition of the bottles. Wine will deteriorate if not looked after. Dont keep them out in the shed or on topof the fridge if you are serious about having something to offer in future. Learn about the international market trends and understand the factors that influence wine prices. Focus on the top wines from the best vintages, he said. Poole says he doubts people will ever lose with good wine. You can have a lot of fun. Wine has got its own world of sophistication and excitement. It can be a tremendously fun investment and around it you can build many friendships and a lifestyle around it. It offers much more than a hardcore paper or share investment, he said.
A Star is Born
New Zealands first investment wine could be just north of Auckland. In 2011, the Fine Wine Delivery Company praised the French-style red wines produced by Paul and Cathy Syms at Stillwater. The company blogged a star is born and the Messenger wines are destined for greatness. I cant recall a more impressive and compelling Bordeaux style red wine release in the last 10 years; a wine that will become a must have for the finest collectors and has the potential to be New Zealands first true investment wine, Jeff Poole said. Vineyard owner Paul Syms says his wines have received 5 star ratings from reviewers Robert Parker, Michael Cooper and Bob Campbell. The first vintages were small, between 5,000 and 10,000 bottles, and Syms had set out to produce the best reds in New Zealand. The 2008 vintage had retailed at $40 a bottle but now goes for $120. We have appreciated considerably, he said. Syms says his site by the Weiti River is north facing, in a natural ampitheatre, bathed in sunshine with good, clay soils. The tightly-knit vineyard is also designed to produce good grapes. I and my family do everything. I have literally just finished pruning. We make the wine, bottle it and label it. In order to get the best wine, you need an interesting story. This is a family-run vineyard not open to the public. We dont grow wine and run a cafeteria. We just make the best wine we can. he said.
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Liquor
Bringing Wild Days to Waiheke and beyond

The millionaires playground has its own infamous top tipple - one that is gaining fans on the mainland too, reports TOM THOMSON
ild Days Rum has been created by former teacher Russell Duurloo, who traces his ancestry back to a Caribbean pirate! Duurloo was also a member of the Blokes Liberation Front- a political party that wanted men to resign from the workforce and stay at home drinking tinnies, giving women all the high powered positions they are wanting. He began making rum at the turn of the century because that was what he and his friends enjoyed. It was a struggle experimenting, but eventually he found a recipe and method that transformed his rum. Duurloo had planned to sell his ten acre island property and buy a pub down south and build a distillery but he met local restaurant owner Antonio Crisci. Crisci enjoyed the some of the first barrel so much, it led to Duurloo supplying grappa and lemoncello for Criscis two restaurants. Sales took off, helped by a performance as a rag time piano player in a Waiheke Island Burlesque festival. My daughter and her friends set up a barrel with tastings of rum. We all dressed up as pirates and had the release with a crowd of around 200 people and a bevy of beautiful Burlesque dancing girls. It was a very successful night, he recalled. After this, shops in Waiheke began stocking the rum, finding it a better seller than Mt Gay or Appletons, even though the bottles are smaller and it costs more. The process I go through is different to many mainstream rum producers. 58
The water I use has no added chemicals such as chlorine. I slow ferment the rum in vats, using a range of different yeasts, sometimes taking 4-6 weeks to complete a fermentation. I then boil the wash through a pot still to reduce the volume, and then boil it through a reflux still to take the alcohol percentage to 90 per cent. I then water it down to 45 per cent, charcoal filter it and barrel it in French Oak barrels that I get second hand from the Te Whau vineyard. Used wine barrels carry over the slight flavour of the previous wine, so I keep the red barrels which create a tint of rich red into my rum, Duurloo explained. This means every barrel tastes different, having the different features of the yeasts, the time it takes to ferment and the barrels characteristics.
I leave the rum in the barrel for as long as possible. In the beginning, I was lucky to have a barrel last a year in storage, but now I have two year old barrels which are soon to become three years old, he said. Then, the barrels are bottled. Duurloo says his target market is those seeking a special bottle of rum. Its not really meant for mixing with coke or ginger beer (though that is nice) but rather a special event like a birthday, since it is an artesian product, handmade the way it has for centuries. This contrasts with other rums, such as Stolen Rum which is made overseas and bottled in New Zealand, creating the illusion it is a New Zealand rum. Many of the big producers create 10,000 litres a day and manufacturing is speeded up using modified yeasts. The
Liquor
whole process is mechanised to produce exactly the same product every time and as cheaply as possible, he said. Another target market is the corporate gift market, with some companies buying hundreds of bottles a year and using them as gifts. Wild on Waiheke (a multi-function activity centre) has taken my product very seriously. They buy heaps of it every week which they wholesale to their customers, he said. They also make tasting shots with it,
cocktails and they use it in a pate. Wholesalers in Auckland include Mt Albert Superliquor, Al Dente Wine in Customs Street, Queens Liquor in Whangaparoa and Howick Superliquor. Duurloo admits hes not trying to sell the rum too fast as he aims to build up an aged stock. He has contemplated exporting, helped by requests for rum from overseas, but believes this will change the nature of his product. Having a background in business management, Duurloo believes the
way to progress is to add value to an existing product or to expand your market. He is not ready for that yet, but he has developed a commercial rum pot made up of boysenberries, blackberries, blueberries, strawberries, peaches, apricots and plums marinated in Wild Days Rum. Its a really yummy dessert and is eaten with ice cream. At the Food Show in Auckland I sold 130 jars. Nearly everyone who tasted it liked it. Now, Duurloo is looking for outlets to stock it, but as the rum pots contain 5.5 per cent alcohol, they must be specialised shops. He has also developed a vanilla and aniseed rum but is going slow on that due to its limited appeal. Duurloo has also made a corn-based bourbon but finds he runs out of time to launch new products. For now, after enjoying the Auckland Food Show, promoting his rum and rum pots with a group of pirate girls, Duurloo is back to bottling, labelling and real life, which also includes having a market stall on Waiheke Island where he sells garden ornaments and tourist nik-naks. Oh well, its nearly warm enough to start brewing again- I only brew in summer while its warm because the yeast performs best in summer temperatures, he added.
Win Wild Days Rum!

Thanks to Russell and Wild Days Rum, you too can savour the taste of the Island! To enter all you need to do is answer these simple questions below and send it via email to: editor@acornpublishing.biz by November 10.
Which Island in the Virgin Islands did Peter Durloo live and produce rum? Where on Waiheke Island is Wild Days Rum situated?
The lucky winner will be announced in our December/ January issue.
59
Amazing Accom develops niche in global luxury holiday house market
rom an expansive villa in tropical Bali with its own private pool and cinema room to a fabulous stone house nestled in Queenstowns rugged mountains, luxury holiday home provider Amazing Accom gives you access to this and much more with a few taps of your keyboard. Amazing Accom has carved a niche for itself offering salubrious properties around the world to holidaymakers who want the freedom of being in their own luxury holiday home without the associated hassle of actually owning it. Just like the walk-in-walk-out nature of a hotel, the homes provide linen, towels and cleaning as part of the service. For the owners of luxury properties, Amazing Accom provides an opportunity to make a return on their asset. A key attraction for clients is the security offered through Amazing Accoms service with a compulsory fully automated online holiday tenancy agreement, which has been tried and tested over many years. The company is the brainchild of New Zealander Campbell Bevan who wanted to
generate a return from his holiday home on Waiheke Island in the Hauraki Gulf. Campbell and his wife Valeria wanted to retain ownership of the home where their children had been born but were dismayed to find rental through local providers would generate a minimal amount with no reassurance that their valuable property would be well looked after. With an entrepreneurial spirit, Campbell decided to do online short-stay holiday rentals himself. The initiative was so successful that he soon had the owners of neighbouring properties knocking at his door, wanting the same service for their luxury holiday houses. Campbell quickly expanded to the alpine holiday resort town of Queenstown. A popular vacation destination for New Zealanders and global travellers, the venture grew rapidly with just over 100 Queenstown properties now available from luxury lakeside villas to penthouse apartments with views over The Remarkables mountain range. Overseas expansion followed and Amazing Accom now offers more than 2,000 luxury
holiday houses in 18 countries. The company is about to launch into the American market and is on track to expand to 33 countries by the end of this year. Growth is accelerating far beyond what was forecasted and the company is poised to link into the worldwide travel agent network, which will significantly increase the occupancy rates for all the properties listed online with Amazing Accom. Key to Campbells success is sticking to the core foundations, and superior value propositions to both property owners and renters booking online. Investment in leading technology gives Amazing Accom a distinct advantage over all of its peers, with better systems and full automation to save everyone time and money. Homes are added to the database by invitation or through an online application process after being vetted by the Amazing Accom team. Unlike competitor websites the Amazing Accom team are easily contactable and offer free unbiased independent expert help for renters and property owners. Campbell says Nobody knows luxury holiday houses like we do! For more information and to view some of the amazing properties available, through Amazing Accom see www.luxuryholidayhouses.com
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Tourism
TOM THOMSONs top stays
hen it comes to luxury lodge accommodation in the QeenstownLakes area, Wanaka Haven is hard to beat. The architect-designed property commands a stunning, private and peaceful site, just five minutes drive from Wanaka lake shore and the town centre. Wanaka Haven offers luxurious rooms with geothermal underfloor heating and a private patio. The property provides concierge services, free wi-fi access and free mountain bike rentals for guests to explore the surroundings. Guest rooms enjoy unobstructed mountain views. Each is equipeed with a DVD player, an iPod docking station and a flat screen tv with satellite channels. The en suite bathroom offers a towel heater, fluffy bathrobes and free toiletries. The cosy dining room features a fireplace and library filled with books, CDs and DVDs. There is also an outdoor entertainment area with Otago Schist stone fireplace and barbecue facilities. Sited close to Wanaka township and its attractions, plus SH6 for a convenient getaway, Wanaka Haven has become a favourite with guests commenting on websites like TripAdvisior, with them constantly giving it a five rating, making it one of the most popular in Wanaka. Among them, Ivan DV described Wanaka Haven as a luxurious, homely lodge in a private setting. Beautifully appointed rooms with stunning views of the surrounding mountains at sunrise and sunset. The hosts Steven and Anne-Mie couldnt have been more welcoming - from the sumptuous breakfast spreads to the glass of wine in the evening or the many restaurant recommendations. All in all, a wonderful getaway and the perfect base for our week-long ski trip, he said. Claudia 2S of Sydney declared Wanaka Haven was Absolutely fantastic! Luxurious, romantic and homely.What more could you ask for after coming off the slopes after a long day. Steven and Anne-Mie are the perfect hosts. They were very inviting, friendly and helpful. They always had delicious baked good set out for us and the breakfast spreads were delicious. They had great recommendations for restaurants and even set plates for us when we decided to get take-away. Our room was superb. With a perfect bed they provided more then expected from a 5star hotel. We cant wait to go back!, she said.
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Taxation
Investing overseas, how hard can it be?

New Zealand doesnt have capital gains tax, stamp duty, or estate duty. Investors in most countries who are accumulating wealth need to concern themselves with these issues, but not New Zealanders. So in theory investing overseas should be relatively easy. But is it? asks MURRAY SARELIUS
ew Zealand does not have a comprehensive capital gains tax, and stamp and estate duties were abolished in the early 1990s. This should make the tax issues around investments reasonably straight forward. If only that was actually the case. Unfortunately, New Zealand makes up for the lack of a capital gains tax and various duties by having income tax rules to tax amounts that are both notional and unrealised. Specifically, the financial arrangement rules and the Foreign Investment Fund (FIF) regime can be brutal. If you invest in overseas assets or foreign currency, you need to be familiar with these otherwise you could be in for a nasty surprise. Two things are particularly topical at this moment with clients who have worked overseas, or who invest overseas. These are the treatment of savings held in foreign superannuation schemes and the impact of foreign exchange movements.
Foreign superannuation
Foreign shares, life insurance and superannuation schemes have been subject to the FIF regime since the early 1990s. But the FIF regime has a very poor compliance record, particularly with foreign superannuation savings. The lack of compliance is understandable. Imagine you have come back from overseas, and you have some savings locked away in a superannuation scheme that you cannot access. What would cause you to think that you might be taxable on the income that is accumulating but inaccessible? Under current law, an investment in a foreign superannuation scheme is taxed differently depending on the specific terms of the scheme. The key issue is whether the FIF regime applies. If the FIF regime applies, you would be taxed each 62
year based on an assumed 5% rate of return (the same rules that apply to foreign share investments). But there are exemptions for most Australian schemes, and employment related superannuation schemes (the meaning of which is not as obvious as it sounds). If your scheme is exempt, you would be taxable on withdrawal. The amount that is taxable will depend on the specific scheme and your particular circumstances. Recognising the complexity and lack of compliance, Government is proposing changes to the law. These changes will impact on current savers, people retiring or withdrawing, and investors considering transferring foreign superannuation savings into a New Zealand scheme. The proposal will make all schemes taxable on withdrawal. If you receive a lump sum, the amount that will be taxed depends on the number of years that you have been tax resident in New Zealand. Pension benefits will continue to be taxable in full, as at present. The proposed simplification seems sensible. At least tax will be imposed when you receive the money hopefully, prompting you to consider the possibility of tax, and enabling you to pay it. But, more immediately, you should consider whether the transition offers an opportunity to set your tax affairs straight, or the possibility to reduce the tax you will pay on these offshore savings. For those who have not complied with these rules in the past, an amnesty will be provided for tax on past withdrawals. This will allow past non-compliance to be settled by making a voluntary disclosure and paying tax on 15% of the withdrawal. This could include past transfers out of one scheme into another. A similar election can be made to pay tax on 15% of the withdrawal for transfers occurring until 1 April 2014. This provides an opportunity for investors in overseas
Taxation
schemes to withdraw, or transfer them to a New Zealand scheme, with a tax impost on only 15% of the withdrawal. This could be a much better outcome than under the proposed rules depending how long you have been tax resident here. Foreign currency bank accounts, bonds and mortgages It is pleasing to see the Government propose simplification and a sensible opportunity to set the record straight with foreign superannuation investments. But the same cannot be said of the rules for foreign currency bank accounts, bonds and loans. These are at least as complex and suffer a similar poor compliance record but no simplification measures in sight. Deposits, debt securities and loans are subject to the financial arrangement rules. These rules tax the total return on such assets and liabilities often on an unrealised basis. There are thresholds below which an investor can return income on a cash basis, so unrealised exchange gains are not taxed. But regardless of this concession, any exchange gain will eventually be taxable. The general volatility of the New Zealand dollar means both the investment and the tax position has become
something of a lottery. To illustrate the problem, consider a couple of practical examples. A loan of GBP 100,000 (say a mortgage over a UK rental property) taken out at the start of September 2008 and repaid today would give rise to almost $NZ 65,000 of taxable income from foreign exchange movements alone. So, although the sale of the property might not attract New Zealand tax, the repayment of the mortgage could. A term deposit of USD100,000 taken out on 1 April 2013 has accrued a gain of almost $NZ6, 000 so far this tax year. A similar account in AUD would have incurred a loss of almost $NZ10, 000. Unlike gains, which are automatically taxable, such a loss needs to meet the usual tests for deductibility. While financial institutions are well suited to managing this type of volatility and exposure to tax on exchange movements, the same cannot be said for individuals. Perhaps this should be the next area that Government should look at for simplification. Murray Sarelius is a tax partner in KPMGs international trade services group.
Competition Winner
The winner of the sealink ferries and great barrier lodge weekend competition is Malcolm Macdougall. Malcolm correctly answered that the maori name for great barrier is aotea. He wins two nights accommodation with continental breakfast, welcome drink, two course dinner on saturday night and sealink car ferry return for two adults with their car.
Well done Malcolm!
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Taxation
A hidden paradise with no income tax or property tax

If youre looking for a clean, safe, English-speaking tax haven, with a mild, maritime climate, and an advanced, Western lifestyle, Norfolk Island should be on your radar, writes TIM STAERMOSE
his unique external territory of Australia lies roughly 2 hours and 30 minutes flying time northeast of Sydney, and 1 hour and 50 minutes flying time northwest of Auckland. It measures just 3 miles by 7 miles. Its lush; its green; and, the vistas are stunning. It is legally part of Australia, and the island relies on Australia for defense and foreign policy. But it makes its own immigration laws. It has its own company law. And, perhaps most interestingly, its not part of Australias extensive tax system. Norfolk Island is the only place in the world I have ever been where there is no income tax, no company tax, no property tax, and no municipal taxes. The only tax that currently applies on the island is a 12% goods and services tax (GST). The air is some of the cleanest Ive breathed anywhere in the world. Its never too hot, and never too cold. Temperatures rarely drop below 12 degrees Celsius (54F) in winter, and rarely climb above 28C (82F) summer. Most fruit and vegetables are grown locally, in the islands rich volcanic soils. The locally raised, grass-fed beef, lamb, and free-range chickens are all delicious. Cattle roam freely all over the island. Locals, Im told, pay a fee to the government of A$70 per year for each cow, which is then allowed to graze on public land. Each person is limited, however, to owning 5 or 6 beasts. There is a well-regarded school on the island, and the local hospital can deal with routine health needs. And for an annual insurance premium of A$800 (US$ 735), your comprehensive coverage includes evacuation to mainland Australia in case of catastrophic emergencies. Its also a very safe community with good, oldfashioned values. Locals leave their houses and vehicles unlocked 24/7. Some even leave the keys in the ignition. At the pub nobody had any qualms leaving their wallets, purses and mobile phones lying unattended on
the bar. So, whats the catch? Why arent more people moving here? Besides being totally off the radar, its the economy. Since the global financial crisis in 2008, Norfolk Islands economy has shrunk by a massive 35% due mostly to the tourism slowdown. The islands airline, Norfolk Air, went bust. And the remaining airlines only offer occasional service. So fewer tourists are arriving. Plus, the strong Australian dollar has made the island a costly destination for non-Australian visitors. And Australians are now vacationing more cheaply in Asia, Europe, and North America. But in crisis there is always opportunity. And Im seeing a lot of attractive, distressed assets for sale. Its clearly a buyers market. Another problem is that many Norfolk Islanders of
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Taxation
working age are leaving the island to seek high-paying jobs in the mining industry on the mainland. In fact, its estimated the islands population has shrunk by a quarter recently. But things may just be beginning to turn around. As of May 24th, Australian and New Zealand citizens can now move to Norfolk Island permanently based on their Australian or New Zealand citizenship alone; its hoped this will create a new source of population growth. Other nationalities still have to apply for residency on Norfolk Island, and it is usually necessary to have a long-term work contract, or ownership of an operating business on the island to qualify. Tim Staermose is Chief Investment Strategist at the Soverieign Man website.
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Watches and Jewellery
Animal Sparkles
Jewellery to mark each animal-themed year of the Chinese calendar is a popular way of refreshing your look, but such items can also be timeless, SOPHIE MCEWEN finds
n the Chinese calendar, 2013 and early 2014 is the year of the snake, which has made serpentshaped jewellery in the form of necklaces, bracelets and earrings a popular trend. Bulgari, an Italian luxury goods brand followed the trend of animal jewellery and created a line of jewellery and watches in the shape of snakes. The collection is called Serpenti. With the Chinese Zodiac calendar being a major influence to jewellery this year, whats to say next year wont be the same? For much of 2014 and early 2015, it will be the year of the horse. Although the horse is a difficult animal to interpret in jewellery as it is not as versatile as the snake, horse necklaces could be a trend for next year. But the snake and the possibilities of the horse are not the only animal motif jewellery that makes a statement. Animal necklaces of any kind are also a stand out piece. Necklaces with fierce animals such as eagles or lions are bound to grab anyones attention. Animal necklaces in black or silver will match anything you wear and reinforce your power. Italian fashion designer Roberto Cavalli designed serpent earrings and necklaces in the form of eagles clutching a snake. Animal necklaces like the lion or the eagle are simple but make a statement about your personality that you are strong and fierce qualities that every woman should utilise in their life. So whether its a snake, lion or eagle, animal motif jewellery is both fashionable and timeless. 66
Watches & Jewellery
Cuff Stuff
Cuff bracelets are set to be this summers wrist adornment of choice, writes SOPHIE MCEWEN
ummer is on its way and, as we shed the long coats and many layers, jewellery to add some colour to our pale arms is likely to be the trend for our hottest season. One of these colourful is the cuff bracelet. Cuff bracelets have been around since the Mayans. Jewellery similar to cuff bracelets was worn by Mayans in positions of power especially for royals. Egyptian pharaohs also wore gold bands around their wrist as a symbol of power or high status. Although nowadays the cuff bracelet does not have these connotations, they are still beautiful pieces to wear without being pretentious. Cuff bracelets are perfect with minimal or unpatterned clothing in shades of black or grey. Oversize cuffs are very popular because you only need one piece to really stand out. Gold cuffs look very elegant and stylish and go with just about anything, allowing you to wear it any time, any day, on any occasion. For a summery feel, go for orange, yello or other bright colours. The brightness of the colour will pop against your clothing and create a fun and flirty aura.
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Property
Family Fun in a Holiday Haven!

TOM THOMSON reports on a special seaside property now on the market
fter 40 years, Jim and Sue Cleland are calling it a day at Great Barrier Island. Their family property which is completely private, borders a deep u-shaped sandy bay and is surrounded by regenerating native bush. This has been their haven for family fun. Jim is 75 and, regretfully, they say it is time to let another family enjoy the property as much as they have. We dont want to sell. If only we were ten years younger! he said. With their family living in Australia, U.S.A, and the South Island it means the cherished holiday retreat at Owhiti Bay, Port Abercombie, must be sold. We all go there every summer and have had up to 25 people there spanning five generations. Its been a wonderful marine paradise for the family to grow up in, he said. The family owned a similar property in the Marlborough Sounds many years ago, but with Jim working as a doctor in Auckland, it seemed right to find a more accessible property in the beautiful Hauraki Gulf. We got a good dose of the wonder of swimming, fishing, diving, water
skiing, sailing and all those things you do beside the seaside as well as tennis, volley ball and bush walks.. Its a diving haven. In beautiful clear water we find scallops in the bay and crayfish on each of the points and literally millions of oysters on the rocks. Around the corner, you have deep sea fishing. Its a fishermans and nature lovers paradise he said. Over the decades, Jim and Sue say they have logged more than 4000 trips in their own boat or aeroplane across the Hauraki Gulf - a reflection of how much they love being there. From the 1970s they have progressively upgraded the grounds, main house, cottage and work shop and have added two hexagonal chalets in the bush overlooking the bay. All the buildings are of high quality. The wharf has been well maintained and upgraded so it can take a 21m vessel and a 7-8m boat in any weather. 2 20 tonne moorings are available for guests. Indeed, the 5 hectare property can only be accessed by boat, something Jim says boosts its privacy and security, (though the site does have a security system monitored 24/7 for extra piece of mind).
The Clelands often fly to the island, saying it takes only 20 minutes from Kaipara Flats (near Warkworth) or 30 minutes from Ardmore or Auckland Airports. The nearest airstrip, Okiwi, is being sealed this summer, making it serviceable all-year round. But Claris, the main airport for the island, is not too far away. After a ten minute drive by car from Okiwi to Port Fitzroy, the Clelands then travel for another seven minutes by boat to their home in the bay. In the 70s they flew by amphibious aircraft from Auckland directly into the bay taking just 25 minutes but more recently friends have visit by helicopter. The bay looks at Kaikoura Island which is publicly owned and being actively re-forested ensuring that the whole natural vista will be preserved, Jim said. It is ultra-private really. But despite enlisting John Howard of agents Ray White to sell the property, the fond and happy memories will be retained as the Clelands Glendowie home overlooks Browns Island with Great Barrier Island on the sky line. Its been a spectacular place for us. We wouldnt have been there 40 years otherwise, Jim added.
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Quality Per sian R ugs

MODERN | CONTEMPORARY | CLASSIC | SHAGGY | TRADITIONAL We have on display one of the largest varieties of rugs in New Zealand
Cushions | Saddle Bags | Salt Bags | Foot Stools | Ottomans | Wall Hangings | Patch Works Over Dyes | Ikat Flat | Weave | Sisal | Outdoor Mats & Kids Rugs You name it weve got it! All sizes from the largest to the smallest doormats. Hallway runners in all sizes, Even cut to order - 30 metre on a roll cut to your size. 6D Link Drive, Wairau Park Auckland (Next to ANZ Bank) 09 444 0085 | 021 110 7570 Monday - Friday 10am to 5pm | Saturday - Sunday 10am to 4pm Follow Us on Facebook WorldInvestorNZ.com September 2013 www.rugdir ect.co.nz
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Ray White Works
A PRIVATE PARADISE OF YOUR OWN

OWHITI BAY, PORT ABERCROMBIE GREAT BARRIER ISLAND $3,995,000
Property ID1007569
PARADISE FOUND
A Private haven, a horseshoe shaped bay, with over 5 hectares of dream lifestyle! Safe for all tide swimming and ideal for fishermen, divers, nature lovers and all the family. Could possibly be used as a fishing lodge. Features include: A large 3 bedroom home and the original renovated 3 bedroom cottage as well as two hexagonal chalets. Accommodation to sleep 20-22 A jetty which can moor a 20 meter vessel and two 7 meter boats. Two deep water 20 tonne moorings. Tennis and volleyball courts. Only 8 minutes from Port Fitzroy in the 7 meter Haines Hunter. Helicopter access
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John Howard 021 751 751 (09) 529 3813

john.howard@raywhite.com
Ray White Kohimarama Best in the Bays Ltd Licensed (REAA 2008) 237 Tamaki Drive, Kohimarama | rwkohi.co.nz

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