83 & 81 Hapua St, Remuera

Premium Development Optionality

4/9/20263 min read

This was a site we identified last year and ultimately secured by a very fortunate buyer. At first glance, it looks like a simple house and land purchase. A little extra digging suggested this was a discounted acquisition with multiple development strategies and large margin downside protection.

The Acquisition

The property consists of two titles sold as one in a premium Remuera location:

  • A high-quality existing house with second floor sea views

  • A 978m² bare development site also with the potential for second floor sea views

Key metrics

Pricing as follows for the combined house lot and bare lot

  • Asking price: $3.85M

  • Purchase price: $3.5M

  • Combined CV: $6.4M

Market View

  • House: $3.0M - $3.6M

  • Bare land: $1.5M - $2.0M

Implied combined value: $4.5M-$5.6M

At $3.5M, the Buyer secured a meaningful discount to market value.

Strategy 1: Instant Equity (Hold Both Titles)

On a conservative basis, the acquisition created:

  • $1.0M - $2.1M in embedded equity

  • Equivalent to a ~28% - 60% uplift

While not immediately realised, this equity provides borrowing capacity/balance sheet strength/flexibility for future development or acquisition

Strategy 2: Sell Down House, Develop Bare Land

A capital-efficient approach is to:

  • Sell the house (~$3.0M)

  • Retain the land at a significantly reduced basis

This effectively creates a low-cost development site.

Development Options

Consenting & Planning Risk

While the site is attractive from a physical standpoint with no major constraints such as hydrology, overlays, or topographical limitations, planning and consenting risk remains a key variable.

The primary complexity is the shared driveway with three other sites, which may require amalgamation between the house lot and bare lot, or redesign depending on the strategy pursued.

Relative Consenting Likelihood

  • High certainty

    • Single high-spec dwelling

    • Duplex (2 dwellings, no subdivision)

  • Moderate to high certainty

    • 2-lot subdivision (~480m² each)

  • Moderate certainty

    • Triplex (3 dwellings on one title)

  • Lower certainty

    • 3-lot subdivision (~320m² each)

The development options are all conservative estimates but based on cash funding. The trade-off is higher density outcomes deliver stronger margins, but introduce greater consenting risk, longer timelines, and increased execution complexity. This makes strategy selection critical, depending on the Investors risk appetite, capital structure, time horizon. Given the profit projections from the various development strategies, we believe that it would be justified in seeking resource consent for the highest density option. Failing this, consent could target a more modest development plan.

Strategy 3: Flip Both Titles (Liquidity Option)

A clean, low-complexity exit:

  • House: ~$2.8M (discounted)

  • Bare land: ~$1.3M (fire sale)

Total realisation: $4.1M
Total cost: $3.6M
Profit: $500k
Timeframe: ~3 months

  • Return: ~14%

  • Annualised IRR: ~70%

This option again assumes cash funding as well as selling costs. This option represents a strong liquidity backstop, rather than the primary value driver. ie. there is a quick buck to be made but this option leaves money on the table.

Strategy 4: Hybrid Approach

The hybrid strategy is an excellent option and is combination of:

  • Partial sell-down (of the house to free up capital)

  • Staged development (eg. develop and partially sell down)

  • Retained exposure to upside (eg. retain the duplex/triplex or developed lot(s)

This approach allows the investor to recycle capital, de-risk the position and maintain participation in higher-value outcomes.

The Key Insight

As you can see, many options on this site for varying degrees of risk and profitability. The most important feature of this deal is not the flip but it is the asymmetric payoff profile. There is a known downside floor via a quick flip (~$500k profit). Alternatively, there is a high-upside development pathway ($1.3M – $2.5M+) with lower capital requirements if a sell down strategy is adopted. In practical terms, the buyer acquired a site with a guaranteed profitable exit, plus a development “option” with significant upside. This particular site was listed on market in a lukewarm market but was snapped up pretty quickly. Nevertheless, we will find more of these, so get in touch if you like the look of this type of site.