Archive | CBD

Red Cross gets $3530/m² for city site

Apartment tower planned

NZ Red Cross has sold its 1181m² at the top of Wakefield St for $4,168,800, at $3530/m².

The site will be turned over to apartment development.

Red Cross had its 2 adjacent buildings purpose-built in 1971. Regional director Patrick Cummings said the rise in property values meant meant the site had become the organisation’s richest asset and a strategic decision was made to relocate to free up funds for further humanitarian work.

Wayne Muir, of Barfoot & Thompson Commercial, who managed the tender, said the education-zone location & proximity to Queen St led to strong buyer interest. The site has dual road frontages to Wellesley & Airedale Sts, and zoning allows redevelopment to a height of 50m.

Mr Muir said the unnamed local buyer was scoping options, including retaining part of the existing buildings.

Red Cross will move out of the central city. “We want to replace the city site with 2 service centres in Ellerslie & Manukau. Our core business is providing first-aid training courses and it was becoming hard for attendees to find parking around Wellesley St, so easier access & parking will be a priority.

“The sale also frees up funds for NZ Red Cross to increase its humanitarian activities, both within New Zealand & overseas.”

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City leasing

Axa fills

Law firm Hesketh Henry’s move into 2½ floors of the revamped Axa building on Shortland St has been well publicised, but there are bigger things afoot in the building.

State Insurance is fitting out four floors, the fifth to eighth, for a mid-year move. Hesketh Henry has an option on an extra half floor, which would give it floors nine to 11. Lindsay Jackson of CB Richard Ellis, who was master agent but has since seen Bayleys and Colliers Jardine take some of the work, says the former National Mutual Centre would soon have only the bottom four floors vacant.

The remaining two floors between Hesketh Henry and longtime tenant Ernst & Young, which now has the top six floors, may soon be spoken for. But it is all happening at lower rents than Axa had hoped for when it set about the $25 million refurbishment of the building last year. In a softer market, Mr Jackson says the remaining lower floors would go now for $200-220/m², down from the $215-230 range originally anticipated.

Paul Hain of Bayleys, who negotiated the Hesketh Henry lease, says Axa is effectively offering tenants a new building, but at cheaper rents, $220-263/m².

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Holiday Inn site up for tender

Asian investors bought freehold, left site empty

The Holiday Inn site on Customs St East is back on the market after five years in the hands of Asian investors.

The Asian investors’ company, Matacorp Investments Ltd, bought the lease five years ago. The 21-year harbour board lease was due for its next renewal on 1 February 2001, but Matacorp paid $500,000 for the freehold in 1996, supported by the Auckland City Council’s desire to sell the freeholds of property around the downtown area it acquired through the demise of the Auckland Harbour Board and Auckland Regional Services Trust.

Matacorp has held its 1105m² site, in four titles, with the support of solicitors’ nominee company loans, but in June last year took out a new first mortgage of $2 million from National Mortgage Nominee Co Ltd for one year, at 9% with a penalty interest rate of 15% and the principal due on 1 June.

That loan has been called in and is the basis for a mortgagee tender closing with Colliers Jardine on 13 September.

Holiday Inn hasn’t been a likely operator of a hotel on the site for several years, although a hotel might have been a stronger prospect once the Britomart project was under way. With that canned, the site sits across the road from where Britomart might yet get some life, with the Fort St red light district on the other side of Gore Street Lane, at the rear.

However, Mike Williams of Colliers Jardine said the resource consent for a 19-storey hotel had been maintained. That consent runs until May 2001.

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Britomart turns from property development to transport fixation

Questions abound on adequacy for passengers and urban rejuvenation

Commentary:

Britomart, this time, is set to go. This time, even more than last, I’m uneasy about it.

The 1980s version was pure and grandiose property development. The 1990s version — which was pipped by property development competitors in the guise of “Concerned Ratepayer, c/- the Property Council,” and which undoubtedly envisaged more office development than a declining city centre could have mustered demand for — was a destination project.

It was property development, and use of former Auckland Harbour Board property assets handed over to the Auckland City Council, with a giant garage to cope with demand from intended highrises and a transport terminal tucked out of sight.

Considerable thought was put in during that project to getting public transport passengers to and from their transport vehicles — a concourse through the old post office, going underground with a well-lit street to the terminals and shops along the way, links to hotels and apartments at one end which would mean there would always be people moving about, effectively creating user-security.

The proposed office blocks, too, would have provided a steady stream of users, although dedicated lifts from parking to office might have removed them somewhat from the neighbourhood-user category.

Pedestrian network was important to previous scheme

Built as an integrated destination, it would have provided an underground and podium pedestrian network to breathe life back into an area which, with dithering by a succession of councils, was steadily turning into a cesspit.

In the 21st century version, planning for the Britomart Place (eastern) end has been set aside while attention is focused on Queen Elizabeth II Square, the post office, a rapid-transit station which turns the square back into a thoroughfare, and the underground remnant, the train station.

Cost-cutting sees the concourse whittled back, and the councillors’ resolution on Thursday night will make it hard to find the money to add the features which would turn the concourse into a welcoming place.

Transport focus could still leave people out in the cold

The version which has won the green light from local body and government transport financiers, and from politicians eager to complete a process before election time, is a transport scheme.

Considerable effort has been made to turn it from being a destination. Bus passengers, who will remain for some time yet the largest group of public transport users, will gather along the footpath around the whole Customs/Commerce/Quay/Queen St(QEII Square) block.

It will, essentially, be like the stops on Albert, Victoria and Wellesley Sts, where the pedestrian not waiting for a bus has to weave through the gathering.

Their buses will not be waiting out of the traffic flow, as buses traditionally do at a terminus where the bulk of passengers board/embark, but will whiz through as if at a suburban stop where there are maybe half a dozen passengers. Except, with most or even all of the trip’s passengers boarding at that one city stop, it won’t be a whiz.

In the evenings they will gather in the street gloom, covered but still open to the elements as they wait. That makes them, still, second-class citizens. Pampered car users won’t opt to go there.

The buildings they stand outside are most likely to have uses divorced from passengers’ needs.

Thought needed on strengthening eastern end

There will be destination elements in the development, for which designs and building uses have yet to be produced.

Where the Britomart parking building stood, some low/medium-rise development will take place. Part of the old Britomart bus terminal site will be a parklike walkway, which will need a significant destination at the eastern end to stop it becoming an unwanted backwater.

Rejuvenation of the heritage buildings along Quay and Customs Sts will give some people reason to angle across this walkway, but it will really need some high-visitor-number development on the city end of Quay Park to be a safe and valued walk.

That brings me to two points, dealt with in separate pieces. One concerns downtown renewal, where it’s been going and where it might head. The other concerns questions raised by Infrastructure Auckland — and left hanging as that organisation’s directors hastily revised their sums to throw some more money at the Britomart scheme.

Funding boundaries good for narrowing the thinking

Infrastructure Auckland’s scope — defined for it, not by it — seems to have bounds created by a blind visionary. Its task is to provide money for the services infrastructure of stormwater, and for transport.

So, in providing for transport, it can provide the capital structure for stations and rail tracks, but not the footpath to get there. That falls into the category of streetscape, to be paid for by the local authority.

There was some consideration of whether a Britomart fronting Queen St was the best place for a downtown interchange, and the consideration of interchange seemed to require passengers to go from one form of transport such as a bus or a ferry, to another such as a train, but not from a bus to a bus.

The interchange consideration was to treat the immediate downtown vicinity as a place to pass through, and only as that. This narrow view also eliminated future downtown possibilities, of how expansion might occur towards Quay Park, how a Quay Park arena or a Viaduct convention area might fit into a new-look downtown, whether the downtown core might contract down Queen St to fall short of Wellesley St.

And the financial consideration — where, bizarrely for a project which has waited at least 15 years for a construction start, the thought of making savings by delaying the start for a year or two was seriously countenanced — seemed to weigh only one side of a coin.

Recent Britomart stories:

Infrastructure Auckland’s $45 million “not much”

Britomart turns from property development to transport focus

Urban renewal an important fact of Britomart scheme

Britomart scheme gets unanimous green light

Auckland gets Infrastructure Auckland $45 million for interchange

New scheme for Britomart interchange voted through, but with $249 million cap

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Research shows Volvo race worth direct $16.5 million to Auckland

Indirect return estimated at $50 million

An economic impact assessment by Market Economics Ltd shows the local economy gained a $16.5 million benefit from the Volvo ocean race stopover in January, $500,000 more than the objective Auckland City Council set itself when it decided to host the 3½-week event.

The report found that without the council’s commitment to invest $1.54 million over 2 years on managing the stopover, the race wouldn’t have come to Auckland. Market Economics estimated the stopover generated 3 times the directly related spending — $50 million which wouldn’t have been spent without the race.
It gave these examples:
At least 1 syndicate based its operations in New Zealand, spending an estimated $10 million on boat building, sails & training
Another syndicate had all its sails made in New Zealand at an estimated cost of $2 million
and some syndicates sourced other goods & services for their entire campaigns from New Zealand.
Cllr Scott Milne, who chairs the council’s recreation & events committee, said the stopover hosting cost came in $29,000 under budget.

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Eyesore rebuild to start soon

Gaze gets approval for design changes in derelict Raymond motel

An Auckland eyesore, the part-built Graeme Raymond motel next to the city’s central police station up Hobson St (pictured beside a completed Raymond apartment building), is about to go.

David Gaze, who bought the building at the end of last year, got resource consent today for a proposal which will fit inside the envelope city councillors agreed to four years ago (see artist’s impression below).

He was able to continue work on the derelict building if he simply picked up the original plans, but required consent to change the plans. One of the few differences is a redesign of the first floor into 15 motel units, instead of the 12 units and communal kitchen of the previous design.

Mr Gaze said after getting consent to use new plans at a meeting of Auckland City Council’s planning fixtures sub-committee, that tenders to build a motel and serviced apartments had closed and one of the contractors should start work in four to six weeks.

He is negotiating with two operators and intends to sell the building on completion next March-April. “It’s a turnkey operation,” he said.

The original consent granted to Mr Raymond’s First Investments Ltd in 1996 was for eight levels — basement parking, ground-floor lobby and cafe, four motel levels and two upper serviced-apartment levels.

However, when First Investments went into receivership in early 1998, the roof had been put on with two levels unbuilt, and the whole building was not fully closed in.

Mr Gaze wants to build the extra two floors, continuing at 15 units a floor. In the original design, the top two levels had 10 apartments with cooking facilities.

The biggest visible change will be in the roof. Mr Gaze has dispensed with the original gables and dormer windows, preferring a simple pitched roof.

Mr Gaze bought the motel property for $1.6 million at auction last December. The auction had been delayed by court action between National Mutual companies Permanent Trustees and NMFM Mortgages, each with its own first mortgage and debenture securities over Raymond group assets, and Wellington businessman Philip McGaveston as holder of unregistered mortgages and as intending buyer of the property.

The uncompleted Raymond building would have had 55 units plus manager’s quarters, with another 10 apartments on each of the two missing floors for a total 75 (plus manager), but the Babbage design for Mr Gaze has 15 units on every level for a total 90.

Mr Raymond’s group of apartment development companies went into liquidation early in 1998 and he was subsequently bankrupted a third time. He now faces five charges brought by the Ministry of Commerce (now Ministry of Economic Development) relating to that bankruptcy.

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Capital Properties gets 12-year lease on Crown Institute building

Institute deal replaces numerous small leases

Capital Properties NZ Ltd has signed a single 12-year lease on the 4600m² office component of the Crown Institute building on Lorne St, replacing numerous smaller leases with various tenants. One tenant occupying about 500m² is excluded from the new lease.

The new lease is with Crown Institute of Studies Ltd (Alan Chisholm). Capital Properties chief executive Nick Wevers said today it was the biggest single office leasing transaction in the Auckland property market in 12 months.

He wouldn’t give details of rent, which still has to be settled between valuers for each party, but expected there would be a small increase on present returns.

The building was previously leased to the institute company and a range of small office tenants whose leases expired recently.

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Council shortlists 4 Britomart contenders

Decision on precinct development winner as transport centre chugs into action

4 companies will go to stage 2 of Auckland City Council’s “request for proposals” process for redeveloping the Britomart above-ground precinct.

They are Melview Developments Ltd (Nigel McKenna), Trans Tasman Properties Ltd (listed, controlled by Jesse Lu of SEA Holdings Ltd, Hong Kong), Bluewater Group Holdings Ltd (Tom Murray, a director of numerous Oceania & Eastern group companies) and Phillimore Properties Ltd (Ross, Kelvyn & Ken Healy).

Information packages on the Britomart redevelopment went out to 160 parties late last year, and 14 proposals came back by the 18 December deadline.

The council’s finance & corporate business committee discussed the proposals, and the staff recommendation that the stage 2 deadline be pushed back a month to 30 April, in the closed section of its meeting on Friday.

Committee chairman Cllr Doug Armstrong issued a statement on the outcome on Sunday.

Melview has done a range of residential developments, extending its expertise with the Beaumont Quarter project on the former Auckland Gas Co site on Beaumont St and a new apartment project on the Lighter Basin.

Trans Tasman has also carried out 1 Viaduct Harbour development and has a large development site available for another. After cutting its debt to a more manageable size, Trans Tasman has moved to developing investments rather than remaining a passive portfolio holder.

Oceania & Eastern has a stake in property developer Symphony Group and was instrumental in creating the Paramount Property Trust at the end of last year.

The Healy family’s most notable recent effort was the transformation of the former NZI block, running from the Blackett Building up Queen St to Vulcan Lane, including the 2 former Vulcan Lane pubs, the Queen’s Ferry and the Occidental, and the old South British Insurance and NZI offices fronting Shortland St.

Among criteria used by the evaluation panel (5 senior council staff, 2 former staff acting as consultants, 2 members of the reference group which chose the transport interchange design, & 1 independent architect) were:

the provision of a transport interchange
the creation of a lowrise, heritage-based precinct
the creation of an environment containing a rich mix of activities, ensuring the precinct retains 24-hour vibrancy
creation of a people-dominated safe environment
a desire to reinforce & reinvigorate retailing in the Downtown area.Cllr Armstrong said the 4 shortlisted proponents would now provide comprehensive development plans, timetables, financial details & other information by 30 April.

The finance & corporate business committee will review the results in June and recommend 1 or more successful proponents for approval by the council.

The $200 million Britomart transport interchange is due to open in July.

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Symphony and Watts Group open 1st of Parc units

Total $55 million development will have more than 120 units

Symphony Group Ltd bought the New City Markets site in the middle of the Viaduct Basin redevelopment area in 1999 and opened the 1st 2 apartment buildings in its The Parc complex on Thursday.


The development is a $55 million joint venture between Symphony and the Watts Group Ltd, which is building it.

The Parc site is surrounded by Customs St West, Market Place & Pakenham St. The development, and Symphony director Colin Reynolds, won high praise from Auckland mayor John Banks at the opening, while Symphony’s general manager, Gary Noland, said The Parc had replaced “a blot on the landscape.”

The Parc will ultimately have 11 residential buildings containing about 120 units (including some commercial units), enclosing a 3500m² oval garden – an oasis slightly smaller than a rugby field in the heart of the Viaduct.

Residents will move into the 1st 2 blocks facing Market Place in August and 7 more of the blocks are under construction. The final 2 blocks, Solo and Lumina, will close off the development on the Pakenham St side.

Mr Noland said the project got away from the traditional long corridors associated with apartment developments and there was nothing to compare it with.

The mayor, in full flight, told the opening gathering: “I’m here today principally because I admire Colin Reynolds. I think he’s 1 of the good guys. I wanted to come here today to say to Craig Watts, ‘You’re a very good builder, Craig.'”

Mr Banks said council purchase of nearby Viaduct land, which would not be developed, would add significantly to the value of The Parc’s apartments.

“I love this place – I train across the street in the gym. This substantially adds to the heart & soul of Auckland City,” he said.

“There’s a lot of architectural vandalism taking place in this city – some of the rudest development you can see in the world, (but) I think these are brilliant.

“This is a great part of town. We are blessed by people in this area who want to do it right, and they will benefit in the long run by not taking the short cuts.”

The 1st stage of The Parc comprises 6 buildings containing 51 units, of which only 5 remained unsold last week (the last of the Customs St West units, with a view to the Viaduct Basin, was sold for more than $1 million the day before the opening. Those units are under construction now, next to the office of Oceania & Eastern Ltd.)

Apartments in those buildings range from $557,000 for 137.6m² to $1.8 million for 349.3m².

19 units in the 2nd stage were released a fortnight ago, and 7 of the 9 commercial units on Market Place had sold.

Also just released is the Solo Apartments building, which Mr Noland described as a modern alternative to the traditional Parc residences, including in-wall beds and with the ability to be used as commercial premises. These studio apartments have been priced from $235-295,000, and 9 of the 34 have been sold. (The Kellands Real Estate website for Solo gives all prices, unit sizes and prices/m² net & gross).

The 14 apartments in the Lumina block will also be 2-3 bedrooms, with internal areas of 120-145m²and prices in a range of $745-929,000.

Websites: The Parc
Symphony Group
Watts Group
Solo Apartments
Lumina Apartments

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Property Council pulls money from design competition

Britomart prize withdrawn

Auckland City Council’s design competition for a new Britomart development will go ahead, but without a Property Council prize of $50,000 as the carrot.

Britomart, the controversial project to put a transport terminal and parking underground, with highrise developments replacing the existing eyesore of a downtown bus station, was canned after a change of council last year. These days it is referred to as the Waitemata Waterfront.

The full council was to meet on 23 March to decide the terms of the design competition, but that meeting was cancelled. However the competition will still be promoted by the council in April.

The Property Council decided to pull out because it said the final form differed from its original proposal. “In our view the competition does not provide sufficient incentive for commercial organisations to commit resources and bring innovation to the process,” the Property Council said in its regular newsletter.

The Property Council is also about to lose its national director, John Dakin. He will leave by August after seven years with the organisation, starting its research from scratch and setting up a comprehensive commercial property index, followed by nearly two years as director.

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