Archive | Customs St

52-storey Customs St tower gets consent

Architecture firm Peddle Thorp released details today of a 52-storey apartment tower on Customs St East, to be built within the next 3-4 years.

The tower on a 2729m2 site is part of Peddle Thorp’s design to redevelop the Customs St East block between Fort & Gore Sts and received resource consent from Auckland Council yesterday.

The development also incorporates 2 smaller buildings currently on the site – an 11-storey office block on the corner of Fort St which will be updated to integrate into the new tower. The heritage building’s facade on Gore St will remain unchanged and be incorporated into the new development.

The developer is Shundi Customs Ltd (directors Shao Huojun & Zhu Lijuan; shareholders Shundi Group Investment Ltd (60%), held by a Gilligan Sheppard trustee company, and Shanghai Shenshun Investment Co Ltd of Shanghai (40%).

Bradley Luke, Director of Peddle Thorp, said the tower would add a new dynamic to Auckland’s skyline and help to redefine the potential of apartment living in Auckland: “Every apartment in the development is north-facing and most have unencumbered views out to the Waitemata Harbour. We’ve designed them so they are liveable, high quality & maximise outdoor space.

“For residents & visitors, it features public walkways that will connect people to Gore St Lane and includes a selection of apartments with double-height balconies to maximise outdoor living space.

“The sharp angle at the top of the tower has been designed to avoid shading Emily Place and to give the tower a striking form.”

The main tower will house 221 apartments, including 11 floors of penthouse apartments, as well as a mix of 1-3 bedrooms & studios – 15 penthouses, 56 3-bedroom apartments, 10 duplexes of 2-3 bedrooms + study, 60 of one bedroom + study, and 80 studios. The base of the tower will have 4 floors of retail & restaurants. The smaller tower has been redesigned to house a new hotel.

All the apartments are at least 10% larger than Auckland Council’s minimum standards and have high studs of about 2.7m.

Mr Luke said this tower would be the tallest residential tower in Auckland and one of a handful of towers with more than 50 storeys.

Peddle Thorp’s previous building designs around central Auckland include the Lumley Building, Vero Centre, Stamford Residences, SAP building, the Westpac and Ernst & Young on Takutai square in Britomart and the redevelopment of the Auckland Museum.

Attribution: Peddle Thorp release.

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Pandeys buy Novotel Ibis at Ellerslie

CP Group Ltd (Charles Pandey) has bought the 247-room Novotel Ibis Auckland Ellerslie for a record price of just over $55 million.

Colliers International’s national director of hotels, Dean Humphries, who ran the tender opened in June, said yesterday it was the highest price achieved for a non-cbd hotel in New Zealand and was at a yield of 7.76%.

Dean Humphries.

Dean Humphries.

He said local company CP Group had strong competition from overseas interests for the 6-storey combination of Ibis & Novotel, at the entrance to the Ellerslie racecourse.

Former owner Host Hotels & Resorts LP of the US, owns 2 other Ibis hotels in New Zealand, in Christchurch & Wellington, and 3 other Novotels – Christchurch Cathedral Square, Queenstown Lakeside & Wellington. It owns one hotel in Australia, the Hilton Melbourne South Wharf, and is a major hotelier in the US.

Mr Humphries said the transaction bucked a trend of overseas buyers acquiring major New Zealand hotel assets. The last 3 big hotels on the market all went to overseas buyers.

He said CP Group had a strong local knowledge of New Zealand’s tourism & hotel landscape and was able to quickly identify the significant, current benefits & potential for this hotel: “These include record occupancy levels & revenue growth, culminating in greater profitability & rising hotel property values.”

CP Group owns hotels around New Zealand and in Australia & Fiji. It took control of the Westin Lighter Quay hotel on the Lighter Basin at the end of 2011 after a dispute between room owners and former management, and renamed it as the Sofitel Auckland Viaduct Harbour.

It owns the former Hyatt Regency on Waterloo Quadrant, now the Pullman Auckland, which includes management of apartments in the adjoining Pullman Residences. Other Auckland hotels are the Mercure on Customs St East, the Mercure Auckland Windsor on Queen St, and All Seasons hotels in the cbd and at Ellerslie.

The company began planning the hotel conversion of the former Reserve Bank building on the corner of Customs & Gore Sts about 7 years ago, but work on a Sofitel So hotel came to a halt last year over payment disputes, and the scaffolding was pulled down. The CP website now lists that conversion as a Novotel, with 272 rooms in a tower stretching from the bank’s original 10 storeys to 21 levels.

The liquidators of Pandey company & Rotorua motel owner NZ Properties Holding Ltd, Damien Grant & Steven Khov of Waterstone Insolvency, said in their latest report in May they were still involved in litigation with the principals & related entities over disposal of assets. 9 creditors have filed claims for $3.4 million. CP Asset Management Ltd lost a Supreme Court bid last year to overturn a Court of Appeal judgment which reinstated Mr Grant & Mr Khov, the original court-appointed liquidators, to NZ Properties Holding.

Attribution: Agency release, CP website, Companies Office.

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2 plush cbd apartments sell

Both cbd apartments taken to auction at Bayleys on Wednesday were sold under the hammer – one in the Galleries overlooking the Viaduct precinct and the other (pictured) atop the office building where Customs St meets Beach Rd, Emily Place & Fort St.

CBD

Customs St

2 Emily Place, unit 9A:
Features: 183m² penthouse above commercial units, 3 bedrooms, 30m² balcony, secure parking space, storage
Outgoings: rates $2287/year including gst; body corp levy $13,436/year
Income assessment: $/week
Outcome: sold for $1.48 million
Agents: Cheryl Regan

Victoria Quarter

The Galleries, 23 Graham St, unit 1:
Features: 178m², 3 bedrooms, 2 bathrooms, balcony, 2 secure parking spaces
Outgoings: rates $3155/year including gst; body corp levy $8876/year
Outcome: sold for $1.258 million
Agents: Any Hain & Chris Reeves

Attribution: Auction.

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Precinct QEII Square plan change up for notification

Precinct Properties NZ Ltd’s private plan change 79, to incorporate the 1892m2 Queen Elizabeth II Square into its Downtown Centre redevelopment, goes to Auckland Council’s Auckland development committee on Thursday for a decision on how it should progress.

The council options include taking over the plan change, but Precinct hasn’t asked for that to be done. The square is owned by the council, but is subject to a conditional sale agreement pending road closure and the change of zone to city centre zone to enable development. The applicant doesn’t have to own land subject to a plan change request.

The council must notify its request for submissions within 4 months.

The conditional development agreement announced in February involves land transfers, along with payment to Precinct for providing a laneway cutting east-west across the site and for the extra cost of building the tower above the rail tunnel.

Earlier story:
26 February 2015: Elation at Downtown rail, tower & square deal

Links: Proposed plan change 79
Proposed rules

Attribution: Council agenda.

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Spark Building D price settles at 7% yield

The price Shanghai Pengxin (Zhaobai Jiang) has paid for Spark City Building D (pictured) yoyo-ed for months before settling at a 7% yield.

Development company Mansons TCLM Ltd originally sold Building D last November at a 7.25% yield on the $4.92 million/year rent, pricing the deal at $67.86 million. However, real estate agency Bayleys put the building back on the market again briefly in March with a price tag of $72.88 million on it, representing a 6.75% yield, before the sale to Pengxin was confirmed at $70.15 million and a yield of 7% flat.

When the Overseas Investment Office released its decision consenting to Pengxin subsidiary Pengxin Holdings (HK) Co Ltd’s application to buy the building in March, the office withheld the consideration.

Building D was originally sold along with buildings A & B in a price range from just under $50 million to just under $70 million. The 2 buildings with leases to Spark, buildings A & D, both sold at 7.25% yields while building B, with a shorter lease to TVNZ, sold at an 8.5% yield. Augusta Funds Management Ltd bought the fourth building, C, last April for $65.2 million and has syndicated it.

2 other cbd sales Bayleys agents have completed are the long-vacant development site at 85 Customs St, to another Chinese developer, and a vacant showroom at Chancery.

CBD

Chancery

19 & 21 Chancery St:
Features: 76m2 showroom
Outcome: sold with vacant possession for $510,000
Agents: James Appleby, William Coates & Damien Bullick

Customs St

85 Customs St:
Features: 1667m2  north-facing site in 2 titles with dual access off Gore St; resource consent valid until 2017 for highrise commercial &/or residential development with a gross floor area of up to 35,305mplus just over 200 parking spaces; mostly undeveloped land plus the vacant Seatrans House, has been leased by Wilsons Parking for a number of years
Rent: holding income
Outcome: sold for over $30 million to mainland Chinese developer
Agents: John Halstead & James Chan

Victoria Quarter

Spark City, Building D, 167-169 Victoria St West, corner Hardinge St:
Features: 7592m6-level building, 75 underground parking spaces, fully occupied by Spark NZ Ltd on 10-year lease from 1 June 2014, contains a 300-person function venue & theatre; part of a strata-titled 4-building complex purpose-built by Mansons TCLM Ltd for Telecom NZ Ltd (now Spark) ­in 2010; 10-year defects & capex warranty
Rent: $4.92 million/year net + gst, with 3% annual increases
Outcome: sold for $70.15 million
Agent: Paul Hain

Earlier stories:
20 March 2015: One Spark City building back on market
10 November 2014: 3 remaining Spark City buildings sold
16 March 2011: AMP Office keeps ANZ & plans ANZ Centre refurb, lifts 21 Queen St leasing
27 January 2010: Developer looks for speedy rise of new Customs St bank building

Attribution: Agency release.

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Tracking ideas W25Mar15 – The art of making cities liveable

Tracking ideas is a Bob Dey Property Report section devoted to ideas on property questions such as urban strategies & design, many from overseas but with relevance to Auckland.

International Making Cities Livable LLC has produced a 14m 20s video expanding on philosopher & author Alain de Botton’s 6 principles for a more attractive city, which includes a frame showing the National Bank Centre on Auckland’s Queen St (pictured at right).

But the fleeting appearance doesn’t come with a bouquet. Instead, the building now referred to as 205 Queen St appears as the commentator reaches the point in the script: “…and most office buildings are brutally anonymous.”

No 205 was always an unusual development – 2 cylindrical towers over a single podium occupying an entire small mainstreet block, opened in 1987 with a lobby showing potential and a few shops facing the street, in an era when office tower developers didn’t like to mix uses.

From the utilitarian lobby of the past – a place to catch a lift, nothing more – the lobby has been turned into a more relaxed place, with a quality café and a range of places for a conversation – standing at long tables, or a variety of seating.

Mr de Botton’s liveable cities video calls on viewers to make city leaders accountable to the citizens, not just to the developers.

His 6 principles are: 1, order; 2, visible life; 3, compactness; 4, orientation & mystery; 5, scale; & 6, a sense of the local.

On scale, he said: “Our urban skylines have become dominated by tall buildings dedicated to banking & commerce. Instead, we should be building at an ideal height of 5 stories, resulting in dense & medium-rise cities, like Berlin & Amsterdam. If there are tall buildings in a city they should be dedicated to something ‘all of humanity can love.’

The possibility of bulky neighbours in residential areas, and of tall or bulky structures in local centres are 2 thoughts that worry plenty of Aucklanders, evidenced by campaigns such as the opposition to the Milford mall redevelopment proposal.

Britomart’s Customs St East face.

Britomart’s Customs St East face.

Height frequently is not an issue, except from a distance. Downtown Auckland has some tall buildings, but even in a comparison with Australia’s state capitals the number is low. But one example of revitalised grace which Mr de Botton would appreciate is the line of buildings in the Britomart blocks along Customs St East, all 4-5 storeys and demonstrating the human scale of allowing pedestrians to see the tops of the buildings without having to arch the neck.

Links: What makes cities attractive

Attribution: Livable Cities.

Regular leads: Planetizen

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Wynyard Quarter dominates next office growth

Just over half the 100,000m² of office space forecast to be developed in the Auckland cbd over the next 5 years will be in the district’s Wynyard Quarter extension.

Colliers International’s national research manager, Chris Dibble, said in his research report out on Friday the main projects coming up were Precinct Properties NZ Ltd’s Downtown Centre redevelopment & Wynyard Quarter projects, Goodman Group’s Fonterra headquarters & VXV3 buildings in the Wynyard Quarter, and 151 Victoria St West in a continuation of development in the Victoria Quarter.

Smaller developments would add about 20,000m² of floorspace over the 5 years.

After 2020, Mr Dibble said the Wynyard Quarter had more than 110,000m² of office development potential.

In a comparison of timeframes to build the last 300,000m² of office space in the Auckland cbd, Mr Dibble said it took from 1992-2000 (9 years) to build the first 100,000m², 2001-06 (6 years) to build the next 100,000m² and from 2007-14 (8 years) to build the last 100,000m².

Attribution: Agency release.

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Precinct working on Innovation Precinct deal as it plans Downtown project and lifts profit

Precinct Properties NZ Ltd increased net profit after tax by 67% to $39.5 million ($23.6 million) in the December half on net operating income up 22% to $32 million ($26.2 million) – up from 2.63c to 3.1c/share. The company has lifted its first-half dividend by 5.5%, from 2.56c to 2.7c/share.

Precinct also announced yesterday that it’s in exclusive negotiations with Waterfront Auckland to become its development partner for commercial office within the Innovation Precinct at the Wynyard Quarter, on the Auckland waterfront.

A big factor in the profit increase was the $10.6 million fair-value gain in interest rate swaps ($1.7 million a year earlier), which chief executive Scott Pritchard said reflected the increase in market interest rates since 30 June 2013 and the unwinding of interest rate positions.

Rental revenue for the 6 months was up 20% to $82.6 million ($68.9 million), primarily due to new rental income from recent acquisitions. Excluding that, rent was up 3%.

Portfolio occupancy rose from 95% to 97%. The weighted average lease term was unchanged at 5.5 years. Across the portfolio, Precinct completed 30 leasing transactions covering 38,700m².

Mr Pritchard said rental growth in the Auckland office market was strong. The company completed 24 leases & reviews at an average 6% premium to June valuations.

Precinct also entered into negotiations with Auckland Council to co-ordinate the timing of works for the city rail link and the Downtown Shopping Centre development. Mr Pritchard said this project would take advantage of strong growth in demand for city centre office space and would reinvigorate the heart of the city’s main transport hub & waterfront area.

“Planning is progressing well towards a 2016 start for work when current leases in the centre expire. Precinct has appointed a leading international master planner, Woods Bagot, to work closely with local architects, Warren & Mahoney, in planning for this development and the company looks forward to sharing its vision for this new precinct as planning work is completed in the second half of 2014.”

At the Wynyard Quarter, Precinct has agreed non-binding commercial terms with Waterfront Auckland and expected to sign a development agreement within a few months. Final approval remained conditional on Precinct board & Waterfront Auckland approval.

The sites in question have a land area of about 1.1ha and the potential to develop about 46,000m² of gross floor area. “The leasing strategy for the sites will build upon existing efforts to create a purpose-built information communication technology & digital media hub that brings together innovative entrepreneurs & larger-scale companies as part of Auckland Tourism Events & Economic Development’s (ATEED’s) plans for a multi-building innovation precinct.

“Since our inception we have retained a city centre office sector-specialist strategy. This has not changed. This opportunity will complement our existing core cbd offering and allow us to widen our client base to innovative businesses through ATEED’s planned initiatives for high-growth technology businesses. We will also be targeting occupiers whose preference is for lowrise, larger floorplate accommodation, but with all the benefits of a central city location.

“The proposed partnership structure provides for a staged approach, including a prepaid leasehold structure.”

Mr Pritchard said Precinct’s programme of recycling capital out of its existing portfolio would provide funding for this opportunity, taking advantage of strong investment market conditions & a lack of competing stock.

Property expenses were $23.8 million, up 12%, but representing a 3% reduction after adjusting for recent acquisitions.

Following the 2 earthquakes that struck Wellington, the company engaged Holmes Consulting Group to undertake comprehensive inspections of its buildings in the city. These found no material damage to their structural integrity and the non-recoverable cost to repair superficial damage was minor.

Interest expense increased $4.6 million to $16.7 million, reflecting higher debt levels following the purchase of the Downtown Shopping Centre & HSBC House and interest costs associated with the ANZ Centre redevelopment being fully expensed.

Other expenses increased by about 13% as the size of the portfolio grew. Precinct outperformed the benchmark New Zealand-listed property sector return (excluding Precinct) resulting in a performance fee of $1.3 million being payable in the second quarter.

Tax expense of $3.9 million was similar to a year earlier ($3.8 million) despite higher pretax profit. This period’s tax expense relating to the higher profit was offset by an increase in depreciation associated with acquisitions and recognition of a tax deduction relating to the sale of Chews Lane in 2011, which reduced tax expense by about $1.2 million.

Mr Pritchard said an internal review of the 30 June 2013 valuations indicated no material value movement in the period. The 31 December investment property book values were consistent with Precinct’s policy of carrying investment property at fair value.

NTA at balance date increased from 99c to $1/share, mainly reflecting the fair value gain in interest rate swaps and Precinct’s policy of retaining earnings.

Precinct used the proceeds from a $50 million placement and a $12.5 million share purchase plan to repay bank borrowings, reducing them to $556 million ($603 million), and reducing gearing to 34.1% (37.3% at 30 June 2013).

Precinct also reduced its bank debt facilities to $610 million ($660 million at 30 June 2013) as the company carried excess funding capacity following the equity issues. The 2016 tranche was reduced, resulting in a weighted average term to expiry at 31 December of 3.6 years (4 years at 30 June 2013).

67% of Precinct’s drawn bank debt (57% at 30 June 2013) was effectively hedged through the use of interest rate swaps. This hedging resulted in a weighted average interest rate including all fees of 5.8% (5.6% at 30 June 2013) and a weighted average term of 2.4 years (2.2 years at 30 June 2013).

Mr Pritchard said Precinct started the year in Auckland with income-generating occupancy of 97%, significantly higher than at the same time last year. “After allowing for recent acquisitions & the ANZ Centre redevelopment, this improved position led to a 19% increase in Auckland’s net property income.

“The Auckland portfolio is now almost fully occupied, with only 600m² of office space available in the city. HSBC House, which was acquired in May 2013 and had benefited from a 6-month vendor underwrite, is now 100% occupied. 2500m² of space within the building has been secured at a premium to 30 June valuations.”

In Wellington, Mr Pritchard said continued success at State Insurance Tower had led to the portfolio being 96% occupied. “With the strengthening works in the former Central Police Station and reinstatement works almost complete, further leasing progress is anticipated in the next 12 months.”

On the company’s outlook, Mr Pritchard said: “Precinct is well positioned to capture earnings growth in the medium term, with the portfolio no longer over-rented and an expectation in Auckland of sound market rental growth. Earnings growth, however, will lag behind the market due to a lower level of impending expiry and a higher weighting to structured leases.

“In Wellington, market awareness of seismic performance and our commitment to seismic upgrades are contributing to an increase in occupier demand and an improved occupancy outlook. Sustained low prime vacancy rates, and price stability returning to the insurance market, should provide for some modest rental growth in the medium term.”

The company has maintained its guidance for the 2014 financial year of full-year after-tax operating earnings around 6.2c/share (before performance fees) or 6c/share (assuming 50% of the maximum performance fee is payable). Dividend guidance also remains unchanged at 5.4c/share for the full year, consistent with the 90% payout dividend policy.

Attribution: Company release.

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Precinct to tie in Downtown redevelopment with rail tunnel

NZX-listed Precinct Properties Ltd has entered negotiations with Auckland Council to co-ordinate the timing of works at the Downtown Shopping Centre with the building of a tunnel at the site for the city rail link.
 
Precinct chief executive Scott Pritchard said on Monday, on the 10th anniversary of the Britomart station, it would obviously make a lot of sense to co-ordinate timing so the tunnel & Downtown redevelopment can be done at the same time.
 
“Precinct will seek world-class input into planning for the location. But the process is still at a very early stage, with 2016 being the earliest possible date for work to begin.”
 
Mr Pritchard said the company’s work at the shopping centre would deliver on a long-held vision of building on the natural advantages of the location to create an attractive new precinct with quality office space and a new level of retail experience: “We have had a strategy of focusing on the harbourfront area for some time. This is a unique location right on the waterfront and near Auckland’s transport hub. It offers an exciting opportunity to create a special area in the heart of the city to attract people into Queen St.”
 
Precinct also owns the PWC Tower, AMP Centre (ex-Quay Tower) & Zurich House – and now also HSBC House – in the 2 blocks west of Queen St between Customs & Quay Sts and has supported both the rail link and the council’s city centre masterplan.
 
Attribution: Company release.

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Developer looks for speedy rise of new Customs St bank building

Published 27 January 2010

Customs St developer Tim Edney hopes to proceed quickly to consent for the 26-level commercial, retail & office tower which – still unofficially – will house ANZ Banking Group Ltd’s new Auckland headquarters, opposite Westpac’s Britomart office.

 

Independent commissioner Greg Hill agreed to non-notification of the application to the Auckland City Council in a decision on 23 December. Mr Edney’s company, Waikoro Ltd, had already received consent from the Auckland Regional Council for earthworks & discharges on the 2629m² block (4 lots) between 69-105 Customs St. The site runs from Gore St through to the eastern end of Fort St and incorporates the Rose & Crown Tavern and the 12-level Ballantyne House office building in the overall development.

 

“Hopefully it will proceed relatively promptly now,” Mr Edney said this week.

The application for non-notification was opposed by the AMP NZ Office Trust in a letter from its lawyers to the commissioner. The trust argued the application should be treated as a non-complying activity because, “under rule 14.4.8 of the plan, an activity which exceeds the maximum total floor:area ratio is required to be treated as a non-complying activity. In this case, the proposal exceeds the maximum total floor:area ratio of 10:1”.

 

But the reporting officer, senior Auckland City Council planner Earl Brookbanks, considered the proposal overall was a restricted controlled & a restricted discretionary activity. Mr Hill concurred in his decision on notification.

 

Mr Edney said this week: “We had the opportunity to build wider, east-west, which would have blocked out a lot of the Vero Centre’s view and been fairly unfriendly to the Oaks (on Gore St). It’s still fairly high, but we’ve got view shafts everywhere.”

 

He said the choice was to obey the strict letter of the law (although the site’s in a transitional position between 2 of the council’s strategic management areas, with different zoning requirements), or be sympathetic towards its neighbours.

 

Council senior urban designer Chad Hempleman said in his report: “At the neighbourhood scale, the development responds well to its prominent location by managing the transition from a low-rise historic precinct to a high-rise city behind. The proposed building is a considered & considerate addition to the neighbourhood, and offers significantly more amenity to the public realm than a building designed with rigid adherence to the applicable development controls. The proposed setback and lower-level podium integrates the building into a wider neighbourhood context.”

 

Mr Hempleman added that the level new work “provides good street edges, in terms of spatial definition & activity, to Custom St East, Gore St & Gore St Lane. It provides new activities that do not currently exist in Gore St Lane and minimises the effect of vehicle parking within this laneway. The proposal refurbishes Gore St Lane – a decision welcomed by Auckland City Council’s cbd projects team.”

 

22 January 2010: Commissioner rejects AMP trust’s attempt to force notification of development for ANZ

9 September 2009: Steel structure on latest Britomart building completed

10 December 2008: First Westpac staff move into Britomart

2 September 2008: Ernst & Young signs up for Britomart

5 March 2008: Accor brings Pullman brand to Auckland cbd

24 March 2006: Old Seatrans House sold

 

Want to comment? Go to the forum.

 

Attribution: Commissioner decision & report, phone interview, story written by Bob Dey for the Bob Dey Property Report.

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