University buys LivingSpace Dunedin

LivingSpace Dunedin (former Glendermid building) 1

Received by email.

Monday, 15 April 2013 4:09 p.m.
The workers were told at a meeting today, LivingSpace (the accommodation block in Castle Street, used to be Glendermids) has been sold to the university.

It was the only profitable one of the chain, propping up the lousy Invercargill/Christchurch ones.

The company has been in receivership for quite a while, during which the Dunedin business was steadily busy and AFAIK profitable.

Wtf is the university doing with yet another (no rates I suppose) building? More student accommodation? Landlords will be thrilled.

Could be a challenge to the harbourside accommodation block too.

Cleaning staff have been given the heave-ho.

Posted by Elizabeth Kerr

41 Comments

Filed under Business, Economics, People, Property, Site, University of Otago

41 responses to “University buys LivingSpace Dunedin

  1. From last year’s news:

    ### NZ Herald Online 9:25 AM Tuesday May 29, 2012
    Otago University worth $1.4 billion
    By Vaughan Elder – Otago Daily Times
    With a total value of $1.4 billion, the University of Otago’s assets are worth more than any other university in New Zealand, figures from the Tertiary Education Commission show.
    TEC figures comparing the financial performance of each of New Zealand’s eight universities show that at the end of last year the net value of Otago University’s assets stood at $1.41 billion, ahead of the University of Auckland ($1.37 billion). The institution with the next highest asset value was Massey University ($943 million).
    Colliers Real Estate commercial property specialist Pete Gale said the university’s interest in developments around the campus “underpinned” the commercial property market in the area. The fact it was “on the hunt for more strategic property close to that university area” meant this would continue for the foreseeable future, Mr Gale said.
    Read more

  2. Anonymous

    Let’s hope that they pay commercial rates for owning and operating a commercial property…

  3. Hype O'Thermia

    From that article “At the end of last year the university owned 218,318sqm of campus building space,

    ***** 56,190sqm of flats and residential colleges *****

    and controls 22,289ha of land, of which 22,246ha is in long-term pastoral leases.”

    Surely they must be paying normal accommodation-business DCC and ORC rates on those!

    • The pastoral leases are (I hear) mostly held outside DCC geographical area. There is public information available about them (once referenced at this site). No time to search.

  4. Whippet

    Every time the crown ( Uni / Hospital etc ) buy more land the general rating base becomes smaller, and the rest of us have to take up the slack. Leaving less money in our pockets to spend with local business. It won’t be long before you have to go to the museum or the early settlers to see what a ratepayer looked like.

  5. I know where they could buy a cheap stadium. $140m would just about get it at a knock down price. Run-in miles only, full of extras, seats 35,000, handy to town and drinking holes, sunshine roof, off street parking, green area for all sorts of use, excellent for student ‘gigs’ and being off street, mayhem permitted. Apply to the DCC, or any real estate office. First time advertised, often admired, seldom available. Open days most weekends.

  6. Hype O'Thermia

    Pssst – loose lips sink ships. And I’ll say that onleey wince.

  7. Jeez! Hype-O you are showing your age. That is what they said during WW2. They also said, “lest we regret, don’t talk”. I was hugely impressed as a young fella. It had that ring of danger about it. Not sure where I am going here, so will stop while I’m ahead.

    • ### ODT Online Wed, 17 Apr 2013
      Uni buys hotel for student digs
      By Vaughan Elder
      The University of Otago has confirmed the purchase of a 128-room Dunedin hotel, which it plans to convert into student accommodation.
      The LivingSpace building at 184 Castle St, which has a rateable value of $6 million, had been bought by the university for an undisclosed sum, Property Services director Barry Mackay said. “Settlement is not until April 26, so this is commercially sensitive at this time.”
      Read more

      I’m told this morning:

      “Latest obscenity – staff have been told the manager cannot give written references, none but the receivers can do that. He can give verbal references only. One man I know of has worked there for over 6 years.”

  8. Aria

    ALL 25 staff have lost their jobs, and given under a week’s notice. What a disgrace. The way this has been dealt with is terrible.

  9. Aria

    And as if Dunedin needs more “Student accommodation” and that close to the City Centre…Oh dear.

  10. Anonymous

    From personal experience, the University of Otago does not seem to play nice with the Labour regulations…

    • [university and labour regulations] Further to, Anonymous:

      ### RNZ National Sunday 14 April 2013
      Sunday Morning with Chris Laidlaw
      http://www.radionz.co.nz/national/programmes/sunday

      11:13 Richard Hil – Academic Anger
      Richard Hil has written about pressure on universities to make money and the effect that has on academics and teaching. He talks to Chris about the long-running industrial strife at Sydney University, the casualisation of the workforce at universities throughout Australia, which he calls an outrageous exploitation of labour, and the need for academic staff to stand up for their colleagues. Whackademia, An Insider’s Account of the Troubled University, by Richard Hil, is published by NewSouth Publishing. (29′02″)
      Audio | Download: Ogg Vorbis MP3 | Embed

      At Otago when I was on the Staff Women’s Caucus Committee (years ago now) we did some good work supporting part-time teaching staff and general staff, and much more for women in the ‘system’ which boasted very few women professors…

      I personally made sure, as the SWCC’s postgrad representative (using the EEO officer and others in my network), that those with professional design degrees and significant work experience in the private sector doing part-time teaching in Consumer and Applied Sciences received the PhD hourly rate for lecturing and tutoring (Science Division) – even then it wasn’t much. I’d come in from University of Auckland where I would earn per week (part-time) what it was possible to earn per month at Otago (part-time). It sent me on a rampage. Then I left and no-one in the department upheld that rate and its increments and the whole thing collapsed again.

  11. Anonymous

    A multibillion dollar institution speculates a bit more and throws out the staff like this week’s trash. Three more businesses close down – but no daddy on council, no Stadium Councillor to represent, no rescue package like the Hungry Frenchman’s. God only knows how many jobs went with these latest liquidations. And only god knows what our traveling circus Mayor and his Chamber and Tourism sycophants are hoping for while crawling about on their knees. The mall would bring them? The stadium might bring them? The hotel will bring them? Only the greedy Stakeholders visit but they won’t live here. All I see is succession of failed mayors following flawed visions and looking for opportunities to put their name on a plaque.

    A number of businesses seem to have been infected by narcissistic managers, who move in and quickly dispose of capable staff and replace them with incompetent boot lickers. It seems even the university can now award itself this dishonour.

  12. Hype O'Thermia

    Why has the university gone into competition with the private sector? Even the Halls of Residence used to be owned and run by independent bodies, now the university is cutting courses that don’t get enough “bums on seats” and investing in real estate, accommodation. Students pay more for rental accommodation than most families can afford, especially those on benefits or relying on low wages propped up by welfare. The university is using its massive financial resources to unfairly compete with the landlords who have been housing their increasingly badly behaved destructive students all these years, while the university has been promoting the “student lifestyle” of partying and untrammelled immaturity. It would have done better to concentrate on its image as the university with the highest academic standards, the best reputation, the best academic / teaching staff and the best opportunities world-wide for graduates from Otago.

  13. I presume this is intended as a new Hall of Residence. The Halls have been oversubscribed for well over a decade (remember the suggestion of a cruise ship as additional floating accommodation?), despite the construction of City College, and substantial extensions at most halls, including an extra ?68 at Knox and Salmond over last summer (all subsequently taken). Presumably this must reach saturation at some point, but perhaps some students who can’t get a place in a hall in their first year choose another university. If this premise is true, and it brings further out-of-town students to Dunedin, who would then go flatting in their second year, then it would not necessarily be competing with the private sector.

  14. Anonymous

    Link to benefit business by the STAFF REPORTER? That’s code in the media game. Either provided, too hot to identify the reporter or a bit shit even by the paper’s standards. And if you recall how low that bar was set when Dene’s name was added to the hotel press release, even the paper seems to be a bit squirmish about the smiling man in that mock up.

  15. Judy

    Syd thinks they are the biggest game in town, so let’s be kind to them. Could it be that these big game players just might buy houses in that new housing subdivision being opened up in Mosgiel. I wonder who that developer could be?

  16. Hype O'Thermia

    I wonder how the university’s purchase of LivingSpace will impact on the proposed apartments – it seems to have been rated only 3-star, on the other hand the cost was low which is more in tune with the majority of visitors, with so many countries facing difficulties. I can’t see LS’s clients swapping to the 5-star hideosity. Some quotes to give an idea of what the place is like, pre-University of Otago ownership:

    “LivingSpace has 128 individual studios, all furnished with queen-size beds, stylish glass bathrooms and a 26-inch LCD TV. Many of the studios also have kitchenette facilities.
    There are 2 lounges for guests to use at the hotel, as well as a communal kitchen and dining area. Outdoors, there is a terrace where guests can enjoy a meal or a drink in the warmer summer months.” http://www.booking.com/hotel/nz/livingspace-dunedin.en.html

    “Our Dunedin apartment studios are always warm and comfortable, and are just perfect for one or two people sharing. We also offer interconnecting rooms at our Dunedin apartments, which can sleep up to five people.
    The high-quality linen, great pillows and superb shower all help to treat you to an exceptional experience.
    Just five minutes walk to the Octagon, the heart of Dunedin is close at hand to our apartments.” http://www.tourism.net.nz/new-zealand/accommodation/apartments/otago/livingspace

    • ### ODT Online Thu, 18 Apr 2013
      Varsity’s property empire hits rates
      By Chris Morris
      The Dunedin City Council is being left out of pocket as the University of Otago continues a string of commercial property purchases around the city, council figures show. The trend has prompted Cr Syd Brown, chairman of the council’s finance, strategy and development committee, to say the pattern would be a “major concern” if it continued to squeeze the council’s income. However, the cost to the council and ratepayers needed to be weighed against the benefits brought to the city by the university’s continued expansion, he said.

      “We do need to realise they [the university] are the biggest game in town.”

      His comments came after the university this week confirmed it had bought the 128-room LivingSpace hotel in Castle St for an undisclosed sum, and planned to convert it to student accommodation. The change means the hotel will cease paying full commercial rates and instead join the university’s stable of non-rateable properties, which pay only for water, drainage and other services. That would reduce the council’s income from the property by $17,123 a year, council staff confirmed yesterday.
      Read more

      • Cowboy Roy Rogers, the plain rude clipper of tickets.

        ### ODT Online Thu, 18 Apr 2013
        Closure underlines need
        By Vaughan Elder
        The imminent closure of a 128-room hotel in Dunedin reinforces the need for the proposed 28-storey hotel on the waterfront, its promoter says. His comments come after it was revealed the University of Otago had bought the LivingSpace building in Castle St, which has a rateable value of $6 million, and planned to turn it into student accommodation. Based on the unit capacity in Statistics New Zealand’s accommodation monitor, the hotel represents just over 5% of Dunedin’s total accommodation capacity. Betterways director Steve Rodgers said yesterday the closure highlighted the importance of the waterfront hotel and the need for more accommodation in the city.

        Ralph Davies, of Headfirst Travel, believed it was time for someone to invest in the budget end of the market and the closure of LivingSpace presented an opportunity for a big company, such as, Base Backpackers to move into the city. With the latest closure, the budget sector had contracted to the point where it was smaller than it had been for 15 to 20 years, he said.

        The Tourism Industry Association’s accommodation providers forum Dunedin chairman, Richard De Graaf, a manager for Scenic Hotel Group, said occupancy rates in Dunedin were not high, compared with other cities in the country, and there was no need for more accommodation in the city.
        Read more

      • A balanced, fair, informative editorial!

        There are no easy answers, and all possible support must be given to the university. But the time has probably come for the university to pay full rates on its residential properties.

        ### ODT Online Fri, 19 Apr 2013
        Editorial: Rates, the university and fairness
        If the University of Otago paid rates as private commercial and residential owners do, they would pay several million dollars. Other Dunedin City Council and the Otago Regional Council ratepayers, as a consequence, would all pay substantially less than at present. But the university, like other government-owned institutions – the hospital, schools, Otago Polytechnic – is exempt by law from general rates.

        In Living Space’s case, the council will abruptly lose $9844 in rates, of which $4818 was for the Leith scheme.

        If at least some contribution could be made, the burden on others would lessen. The matter has come into focus with the purchase of the Living Space hotel in Castle St for student accommodation. By this single action, council’s income from the property reduces by $17,123 a year. University properties are liable for water and drainage rates and charges, but not for general or community services rates, which cover all sorts of other council costs.
        Read more

      • ### ODT Online Fri, 3 May 2013
        Hotel could house university staff
        By Vaughan Elder
        The University of Otago is considering using the former LivingSpace hotel to house staff while it carries out earthquake-strengthening work next year. The university took ownership of the former Castle St hotel, which had rateable value of $6 million, last Friday after announcing it had bought it earlier in the month. Property services director Barry MacKay yesterday said that apart from looking at using the building for student accommodation, it was also possible it could be occupied by staff forced out of buildings during earthquake-strengthening or other work. “The long-term purpose of the building will be to provide accommodation for students,” Mr MacKay said.
        ● Castle Street Ventures Ltd receiver Stephen Tubbs, of BDO, refused to comment on how many workers were laid off after the hotel’s closure, saying that in his view commenting would “be a breach of the New Zealand Institute of Accountants Code of Ethics”.
        Read more

        • ### ODT Online Sat, 4 May 2013
          University hits council in the pocket – again
          By Vaughan Elder
          The University of Otago is about to move into another commercial property, leaving the Dunedin City Council further out of pocket. This comes after the university’s recent purchase of the LivingSpace hotel prompted Cr Syd Brown, chairman of the council’s finance, strategy and development committee, to say the pattern would be a “major concern” if it continued to squeeze the council’s income. The latest commercial space the university plans to move into is the former Video Ezy on the corner of Cumberland and Frederick Sts. The space below the former Bowling Green Tavern, was bought by the university in 2009 as part of its buyout of the pub, but Video Ezy continued as a tenant until the end of last year. Property services director Barry Mackay said the space had been allocated to the Division of Health Sciences for its Centre for Hauora Maori and the Maori Health Workforce Development Unit.
          Read more

        • ### ODT Online Fri, 24 May 2013
          Hotel bought for $6.75m
          By Vaughan Elder
          The University of Otago has revealed it paid $6.75 million for the 128-room Dunedin hotel it bought last month. The university took ownership of LivingSpace hotel, which had a rateable value of $6 million, late last month and has long-term plans to convert it into student accommodation. The university has also said the building could be used to house staff forced out of other buildings during earthquake-strengthening or other work. The $6.75 million price tag for the former hotel was revealed in a report tabled at yesterday’s finance and budget committee meeting.
          Read more

  17. Don’t just blame the University for eroding the rating base. Was this factor ever given any consideration by Harland/Chin and council over the destroying of the industrial rate base associated with the Stadium and State Highway 88? A huge destruction in revenue which was never factored into the overall costs of both exercises. The ODT might be coming late on this one, but where were they at that time? They were the number one cheer group.

  18. Anonymous

    Interesting. Apparently property managers all over town are getting calls to urgently place people (in some cases University students) who were booked into Living Space, into alternative accommodation. What was the unseemly rush? The University does not have a space problem with students currently (numbers are down, Halls are not bursting at the seams), anyone who needs a flat has got one, no new enrolments until July. What’s the rush?

  19. Anonymous

    Apparently the building will be used to house students while other halls of residence are tested and earthquake proofed? All future reservations are being cancelled and long term guests (yes even Otago Uni students and those associated with the Uni) are having to check out and depart the building.

  20. Anonymous

    Further to the jobs lost with this uni property purchase, the Sick District Health Board and restaurant closures, another small business closes its doors noting a changing market and “Increasing compliance costs, fees and rates”. Along with the owners, another three people are looking for work in already depressed market.

    But it’s alright, isn’t it, because the stakeholders’ mayor and a bunch of wallet fillers are away on another schmoozing junket – the equivalent of a puppy grinning at a large bored dog still trying to decide whether to tolerate or eat it.

    Story: Changing market spells shop’s end (ODT, 20 Apr 2013)
    Puppy love: Link to benefit business (above, ODT 18 Apr 2013 – so manufactured even ODT hasn’t put it up online)

    {You may have missed this http://www.odt.co.nz/campus/university-otago/253741/dimension-secures-it-contract -Eds}

  21. Peter

    Looks like the hype of recent years of what the city can achieve, with its new and/or upgraded facilties and the hordes of tourists that will eventuate, is falling flat on its face. Marketers are a laughing stock – and they train them at universities! They are more like PR spin doctors and, let’s face it, you don’t have to have a tertiary education to be a bullshitter/liar. Think marketer. Think used car salesman.

    • Mr Cullen said the polytechnic was working with a partner which would pay for the new hall of residence, should it go ahead.

      ### ODT Online Sat, 20 Apr 2013
      Otago Polytech plans hostel
      By Vaughan Elder
      Otago Polytechnic is working on plans for two building projects worth a combined total of more than $20 million, including a new 200- to 235-room hall of residence.

      A range of factors supported the idea of building a hall of residence for students, including an increasing number of students coming to the polytechnic from outside Dunedin, including from overseas, and the fact demand for hall of residence places out-stripped supply.

      The other project was a proposal to build an atrium linking two of its Forth St buildings – and upgrading them both – which was likely to cost more than $10 million, chief operating officer Philip Cullen said. Both projects were in the planning stages and yet to be approved, he said.
      Read more

  22. Hype O'Thermia

    A few years from now –
    UO Properties has announced there will be an outstanding opportunity for mum and dad investors, in the sell-off of 49% of its tertiary education subsidiary.

  23. ### ODT Online Thu, 10 Oct 2013
    LivingSpace conversion for students begins soon
    By Vaughan Elder
    The University of Otago is to begin converting the former LivingSpace building into a residential college, to open at the start of next year.
    The university in April paid $6.75 million for the former LivingSpace hotel, in Castle St. The college, which will house 127 students, will be named Te Rangi Hiroa College, after Maori leader and Otago graduate Te Rangi Hiroa, also known as Sir Peter Buck.
    Following his time at Otago, Te Rangi Hiroa, who died in 1951 aged 74, went on to be a doctor, military leader, health administrator, politician, anthropologist and a museum director.
    Director of student accommodation James Lindsay anticipated strong demand for places at the college, which would mainly house first-year students.
    Read more

    ****

    ### ODT Online Thu, 10 Oct 2013
    Strengthening Selwyn
    By Vaughan Elder
    Dunedin residential hall Selwyn College is being surrounded in scaffolding in preparation for an earthquake strengthening and upgrade project expected to cost about $3.8 million.
    Warden Dr Neil Rodgers said the scaffolding was being put up so work could begin as soon as the last students left following the end of exams next month. The work was expected to be finished by February, when students return, and like the $12.1 million earthquake-strengthening and extension completed at Knox College this year, it would be a race against time, Dr Rodgers said.
    Selwyn College, which is Dunedin’s oldest university college, is a University of Otago “affiliated” college owned by the Anglican Diocese of Dunedin.
    The need for earthquake strengthening work on the college’s Whitehead building on Castle St became apparent after an earthquake assessment, required by the university, carried out late last year found it was about 37% of new building standard, Dr Rodgers said.
    Read more

    • ### dunedintv.co.nz October 10, 2013 – 7:21pm
      Selwyn College getting up to standard
      Selwyn College is being strengthened after an earthquake assessment found one of its main buildings was not up to standard.
      Video

  24. University’s newest college…
    http://www.odt.co.nz/campus/university-otago/290618/maori-theme-makes-latest-college-unique

    ****

    ### dunedintv.co.nz February 10, 2014 – 7:06pm
    University of Otago’s new residential college officially open
    The University of Otago’s newest residential college, set to house 127 students, opened on Saturday.
    Video

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