Fletchers gets bids on long-fought Three Kings site

It took five years of fighting with local residents for Fletcher Building to get agreement turn its Three Kings Auckland quarry into a housing development with more than 1000 homes. Now the company is considering selling the whole thing off, with rumours of a $150 million price tag.

News of the possible sale comes as Fletcher management battles to get the company's finances in order after a disastrous couple of years and a $94 million loss announced in August 2018.

A Fletcher Building spokesman has confirmed it is receiving both “solicited and unsolicited” bids for its Three Kings quarry development, but wouldn't discuss valuations.

“We continue to receive solicited and unsolicited offers for a number of our sites, including Three Kings, and deal with these on the basis that, as a land developer as well as a residential building company, we will always consider the best return for our shareholders.”

“We have established an agreed master-plan for the precinct, including two plan changes, and a land exchange, and are continuing to fill the quarry in accordance with these plans,” the company says.

Harry Doig, chair of the Puketapapa Local Board which encompasses the Three Kings suburb of Auckland, says he has heard the rumour, including the $150 million tag.

Doig says there would be only a few buyers of the site on which Fletcher has planned to spend about $1.2 billion on building between 1,200 and 1,500 homes over a 10-year period.

“My understanding is rather than put it on the market, they’ve just selectively approached a few organisations and said would they be interested in it,” he says.

If the company does sell, it will be an unexpected end to Fletchers' involvement it has fought long and hard for. In June 2017 it finally reached a settlement with Three Kings residents groups, which had battled the approximately $1.2 billion project for more than five years through the High and Environment Courts.

Locals were worried, among other things, about the number of houses in the development, land contouring, protection of volcanic features, and minimum dwelling sizes.

But much has changed at New Zealand's largest construction firm since June 2017, including a $660 million loss from major projects in its Building + Interiors division. Late last year the company announced it was selling its Formica and Roof Tile Group divisions for $1.2 billion and $60 million respectively.

Fletcher Building's share price has halved since early 2017, from over $10 to under $5 this summer.

The Fletcher spokesperson said there was "no truth" to a rumour that Fletcher was likely to sell the Three Kings development to Housing New Zealand.

Meanwhile building work continues. Speaking before Christmas, Fletcher Residential division CEO Steve Evans said the first stage of 40 homes at the eastern part of the site had already been completed, sold and occupied and that another 60 homes, a mix of terrace houses and one to three bedroom apartments, would be completed this month and that 30 had already been pre-sold.

Evans said filling in the quarry to the level required by the Environment Court would take another two or three years and only after that would most of the rest of the site be ready to build on.

Fletcher bought the Three Kings quarry when it was still part of the Fletcher Challenge group back in 1988 through the $444 million Winstone purchase. It continued operating it as a quarry until it decided on the housing development.

Fletcher also sold another quarry site in Mt Wellington – the 110 hectare Lunn Avenue quarry site in Mt Wellington, jointly owned with the former Brierley Investments - in 2001 for $38 million.

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