When Dunedin ground lease rents come up for review, especially in the general harbour area with its commercial or industrial zoning, much of the land remains historically held by Port Otago.
Port Otago's subsidiary, Chalmers Properties, has underpinned several annual results for 100% Otago Regional Council-owned Port Otago in recent years, but overall group profits fell almost 30% in 2007-08 and 47% in 2008-09, including unrealised property revaluation downgrades of Chalmers during those two years.
Chalmers has divested itself of more than 30% of its Dunedin holdings since 2001, with $12 million paid for 3.4ha last December and $12.6 million for 23.41ha in 2001.
Some of the latter 2001 tranche was purchased by hotelier Earl Hagaman, parts of which became the second-largest purchase for the Forsyth Barr Stadium, costing the Dunedin City Council $7.8 million recently. Both tranches of the two Port Otago land sales included the sale of the ground leases.
Chalmers Properties chief executive Andrew Duncan said ground-lease sales could resume soon around Dunedin if the council's proposed "harbourside regeneration" goes ahead.
"That [regeneration] is something which would be beneficial for the whole city. If it happens, we will sell some interests in that area," Mr Duncan said.
