Waikato Business News July/August 2019

8 WAIKATO BUSINESS NEWS July/August 2019
CONVERSATIONS WITH
MIKE NEALE OF NAI
HARCOURTS HAMILTON
Thinking of selling? What
to consider in a changing
market
The property market, whether it be
residential, rural or commercial,
is and always will be a cycle. Often
the decision of when to sell is driven
by other factors that relate to personal
circumstance or choice, not necessarily
where we may be in the cycle.
With a changing market and in fact any
market, there are always opportunities for
both sellers and buyers. Everybody has
different reasons for selling and in New
Zealand there are several methods of selling
property which sellers need to consider
- this will often relate to the situation or
specifics of the particular property.
When you are considering selling a
property, it is important to understand the
process and the various methods, whether
it will be marketed widely or not, with
or without a price and if there is a fixed
timeframe.
Auctions:
• No fixed price
• Creates urgency through a fixed timeframe
• Creates open transparent competition
between buyers
• Bidders are purchasing on an unconditional
basis
Tenders:
• No fixed price
• Creates urgency through a fixed time
frame
• Creates an element of competition
• Purchasers are likely to be conditional
i.e. due diligence or finance
Deadline Private Treaty
• No fixed price
• Creates urgency through a fixed time
frame, but can be sold prior to the
deadline date.
• Creates an element of competition
• Purchasers are likely to be conditional,
although the incentive of being unconditional
early can motivate some potential
purchasers to avoid competition
(Tenders or Deadline Private Treaty
sale methods should be considered for
complex properties or where there are
ownership structures that have complex
signoff or approval processes).
Private Treaty
• Usually with a fixed or ‘asking’ price
• No time pressure or urgency for pur-
Mike Neale - Managing Director,
NAI Harcourts Hamilton.
chasers to act
• Will likely either be sold quickly
(therefore potentially undersold) or
remain on the market for an extended
period of time (purchasers may deem
the asking price to be unrealistic and
therefore not enquire)
• Conditional and unconditional offers
can be made
Tips:
1. In a changing market it is more important
than ever to have a robust marketing
programme in place, to leave no
stone unturned in order to find not just
any buyer, but the best buyers.
2. In relation to your particular property,
check the track record and specialist
market knowledge of the agents who
you are selecting from. Interview more
than one agent for the job.
3. Consider incentivising the fee structure
for the sale. With an incentivised
commission structure, sellers and
agents are both rewarded - the harder
the agent works and the higher the
price, the agent then also gets some
added financial benefit. I recall one incentivised
fee structure that started at
2 percent as a base, which increased to
20 percent for an absolute premium –
and you will be glad to know that we
got to that premium level.
4. The element of competition is key to
maximising any sales price.
5. Not all auctioneers are created equal
– and it’s not just about showing confidence
and building rapport with the
room, but most importantly about their
negotiation skills with the potential
purchasers to maximise the price they
will pay, especially if the reserve is not
yet met
Cash is becoming king again, as finance
becomes more difficult to secure,
so you need to be dealing with the most
credible buyers.
Remember you only have one opportunity
to put the property on the market
for the first time – and the longer the property
remains on the market unsold, the
more purchasers ask the question about
the issues with the property and whether
the vendor’s price expectation is realistic
or not.
Little known fact:
Waikato hospital has 24 operating theatres
– according to my anaesthetist (due
to my recent misadventure!).
NAI Harcourts Hamilton
Monarch Commercial Ltd MREINZ Licensed
Agent REAA 2008
Cnr Victoria & London Streets, HAMILTON
07 850 5252 | hamilton@naiharcourts.co.nz
www.naiharcourts.co.nz
J5460P
The Instillery’s Mike
Jenkins addresses the
Grow Waikato audience.
Waikato tech sector
poised for growth
By RICHARD WALKER
Waikato is the region of opportunity
when it comes to tech. It has been New
Zealand’s fastest growing tech area for
the past two years, and exporting is a
particular strength.
Company-X co-founder
David Hallett highlighted
the opportunities
during a Grow Waikato
forum in July.
They exist partly because
the sector has ground to make
up. Waikato’s tech sector comprises
6 percent of regional
GDP, below the New Zealand
average of 8 percent.
Meanwhile, tech makes up
4 percent of employment in the
region, also lagging the larger
regions.
Matching the national average
would see more than 2000
jobs created and $350 million
added to GDP, currently
around $1.5 billion.
Hallett highlighted exporting,
an area where Waikato
punches above its weight with
a 7.7 percent share of tech
exports.
“The best way to grow is
to export. Trade surplus is a
really good thing because it
means the market's no longer
constrained,” said Hallett,
one of four speakers on digital
technology at the event.
“When you're exporting
and have great international
vision it means you're paying
your taxes with foreign
dollars. That's a really really
cool place to be, and it helps
us grow our country,” he said.
“That's what the tech industry
enables us to do.”
A government initiative,
Growing Innovative Industries
in New Zealand, released
earlier in the day, earmarked
digital technology as one of its
four industry transformation
plans.
Hallett welcomed its reference
to supporting growth in
the ICT export industry, along
with its mention of a level
playing field for New Zealand
firms to compete for government
business.
“The procurement process
in New Zealand is horribly
broken so obviously they 're
going to have a look at this.”
Hallett was joined by CultivateIT
operations manager
Jannat Maqbool, Instillery
director Mike Jenkins and
South Waikato economic
development manager Paul
Bowden at the Grow Waikato
forum organised by Labour
MP Jamie Strange and held at
Wintec’s Atrium.
Maqbool outlined CultivateIT’s
involvement in
Waikato events in its role as
a connector, and Jenkins, who
is on the NZTech board, gave
a background to his company’s
rapid growth as a cloud
enabler.
That was helped by the
“epic young talent” in Waikato
coming out of the tertiary providers,
he said.
It’s the kind of young talent
Bowden wants to see in his
district, aided by a proposed
digital development hub in
Tokoroa. The hub, which is
likely to require PGF funding,
will include a space for developing
young people’s digital
skills, support for startups and
a co-working space.
“It's designed to be at the
heart of the community, at
the heart of everything we're
trying to do in the South
Waikato,” Bowden said.
He described the growth of
IT as central to the district’s
traditional primary industries
base, including dairy farming
and forestry.
“The forestry sector will
be operating remote drones,
it will be operating remote
cutting devices, autonomous
vehicles will be taking the logs
to ports, so they as industries
need IT skills,” he said.
“What we're trying to do is
not just about the future businesses,
startups and entrepreneurs,
it's also about supporting
existing businesses that
we've got to make them even
more successful, and to create
great opportunities to reduce
digital disadvantage and
inequality in South Waikato.”
Hallett welcomed the
planned Tokoroa hub as part of
the way forward.
“What they are talking
about in South Waikato is
really important to assist people
and help them go through
those formative stages of
building a company.”
In future, he also wanted to
see more companies in the AI
space, “playing with robotics,
virtual reality, augmented reality.
These are the areas where
you can achieve amazing
things.”
The time was ripe for disruption
of existing methods.
“If we look at the way we do
things and apply automation
and some of these ideas we
can achieve some really cool
businesses and have global
potential.”
Startup seed capital was
important, as was a regulatory
environment suited to rapid
growth businesses.
“It would be great to see
a lot more joint ventures
between tech companies or
tech entrepreneurs and existing
companies to leverage
their IP.
“My big one, which is
really important - CultivateIT
is really enabling this - is the
fostering of inter-company
collaboration, businesses that
traditionally compete, fostering
that relationship so they
can work together. If we work
together for the economic benefit
of our regions, of our country,
that's the win for all of us.”
• NZTech chief executive
Graeme Muller says there
are nearly 21,000 firms in
the New Zealand tech sector,
collectively investing
$580 million in research
and development, 35 percent
of all R and D in the
country. Tech employs more
than 108,000 people and
contributes to nine percent
of New Zealand’s total
exports.