Oil and gas HQ in New Plymouth for sale a year after Government's oil and gas offshore exploration ban

The New Plymouth buildings housing New Zealand's oil and gas giants are for sale a year after the Government announced a ban on the granting of any more offshore oil and gas exploration permits.

The landmark property, consisting or two office buildings, is the former headquarters of Shell Todd Oil Services, and is now home to Austrian oil giant OMV.

It is owned by Serge and Lillian d'Elia of Serli Limited, from Wyoming in the United States, who bought it only two years ago from a Singaporean investment company, Tolaga Investments.

Bayleys Tauranga agent Brendon Bradley said the d'Elias bought and sold property and had a number around the country. Bayleys had sold a few for them.

"People sell for numerous reasons. They haven't disclosed any particular reason."

"They've got other opportunities I think they wish to pursue. That's probably the simple answer to it."

The d'Elias have also been in the news in the past year after the Overseas Investment Office revealed it was requiring them to sell more than 16 hectares of sensitive land, called Tui Estate, because the planned gated community near the Rakaia Gorge in Canterbury had not been developed.

A spokesman for the d'Elias last year said they had made every effort to sell the one-hectare lots but had had little interest.

It was part of a crackdown by OIO and its new enforcement team, which monitors the hundreds of wealthy foreign investors who own sensitive land in New Zealand.

Their New Plymouth property consists of two office buildings at 167 Devon Street West. OMV took over the lease of the property as part of a bigger deal with Shell New Zealand when OMV bought Shells' New Zealand assets last year.

The tower was built in 1984 and the office block in the 1970s, with both buildings standing on 3069 square metres of freehold land. The tower met 75 per cent of the New Building Standard (NBS) and the three-storey building 74 per cent, marketing agents Bayleys said.

The d'Elias have other commercial properties in New Zealand, in regional centres like Tauranga, Hastings, Rotorua, Palmerston North and Invercargill.

OMV, New Zealand's largest gas producer, had a lease running to 2023 with two further five-year rights of renewal. The property generated annual net rental of $910,834 plus gst and had 5096sqm of lettable space, Bayleys said.

Bayleys Taranaki agent Iain Taylor said it would be one of the highest value buildings in New Plymouth. There were few if any other commercial office sites of that size there.

The building could remain a prominent office building with OMV as tenant or it could be converted into an hotel. The flexibility of the property's Business B zoning allowed for residential use close to New Plymouth's centre city hub as well, and opened up the possibility of conversion into a large retirement village..

The property is being sold by tender with the deadline 4pm on June 27.

Asked about the affect of the Government's oil and gas decision on commercial property Taranaki Chamber of Commerce chief executive Arun Chaudhari said in the past 15 to 20 years the region had more companies coming to the region, setting up and needing commercial premises..

"We're very unlikely to see more of that happening," Chaudhari said.

Some oil and gas sector businesses were trimming. Tag Oil would be absorbed by Tamarind and there had been a decline in hiring in some of the oil and gas related organisations. For example energy consultants Elemental Group had cut some staff. So the sector did not have a huge demand for space and "if anything they are decreasing their footprint".

"But overall I don't know if commercial property has been affected. We aren't seeing the effect at the moment of prices being driven down because we know there will be more property coming up."

A new energy centre was to be built under the Government's Just Transition programme with the Government contribution of $27 million. 

"So I don't believe that prices have necessarily come down yet."

There was a lot of positivity in the region. He met new businesses recently who were installing solar panels and another training for renewable energy. New Plymouth's industrial belt, Waiwhakaiho, had developed over the past 10 years "almost exponentially".

People were coming to Taranaki for different reasons, mainly the life style, while tourism was growing year on year and hospitality was doing well. 

A new report commissioned by the Petroleum Exploration and Production Association of New Zealand (PEPANZ), and released in February 2019, claims the drilling ban could cost the Taranaki economy $30 billion by 2050, bringing job losses, lower incomes for skilled workers and a cut in living standards.


Read full article here