Archive | Downtown

Self-drive, the catalyst for monumental transformation

I read a US newsletter at the weekend that looked at change resulting from self-driving electric cars, but not just about the vehicles themselves. In this commentary, I take the possibilities further.

My conclusion: Change is not going to happen overnight, but it will be rapid, it will change how you regard your personal convenience and it will wring fundamental changes in property use, and therefore in property ownership, tenancy, value, design.

While you work through the questions & issues below, keep in mind that common use of land-based self-driving electric vehicles might become historic almost before it becomes common.

First, the questions:

Will you own a car – or, in families, multiple cars?

Will you expect to drive to work, as you do now?

Where will you park?

Who will provide that parking?

How do you shop? Mostly, weekly at the supermarket?

Do you use your car for lazy storage?

Do you use storage, music up loud, door-to-door as your excuses for an aversion to public transport?

How might pricing of vehicle ownership, journeys & parking change, and how might public transport be transformed?

Why own for minimal use when you can summons a vehicle at will, to take you door-to-door if necessary?

Now go through some answers:

While you might maintain that you need your car, most decisions of that nature have never really been yours to make.

The people who created mass production of cars were able to do so based on pricing low enough for widespread ownership. But think back to New Zealand’s brief era of carless days, when your vehicle had to be off the road for a stipulated one day/week, which roughly coincided with the start of mass importing of second-hand cars from Japan. Suddenly, from the inconvenience of having to travel by public transport occasionally, New Zealand was awash with cheap cars. You could go where you wanted, whenever you wanted.

Except, it’s reached the point that you can’t quite go whenever you want, because congestion has reached such a level that your journey becomes much slower. In response you look at passengers passing you in the bus lane and ponder joining them, or you drive to work in the dark.

In Auckland, if you cross the harbour bridge in peak traffic, you can see maybe 10 people near you – one per vehicle, all forced by congestion to travel slowly.

Parking made harder

The era of Uber is upon us – and the suggestion is that the Uber will lose its driver too. Pricing will dictate whether you travel as a solitary occupant in a car, or multiple. Either way, you will be taken from your door to your ultimate destination, or perhaps to a conveyance which carries more people.

Your own car will sit in its garage, and soon you will figure you don’t need it. One reason will be that you can order up a vehicle to suit your travel purpose – if you have more luggage, a bigger vehicle; travelling to the supermarket you don’t need space, but travelling home you do. Or perhaps you do all that shopping onscreen, without going anywhere.

You may see those possibilities as pure & unlikely conjecture until you consider the next point: the decision won’t be yours.

The next stage in your decision on how to get to a fixed place of work will occur when your employer, or the building owner, decides you don’t need a parking space because self-drives & public transport eliminate the need. Parked cars which do nothing but sit, waiting for you to come back in 8 hours, are a very large expense. The building owner will convert that parking space to other uses, especially if it becomes harder to fill every space.

Then, the road maintenance equation

It occurs to you that your journey could be much faster because there’s less competition on the road… Except, who pays for that road’s existence & maintenance? The motorist, the local council & the Government do – the motorist via taxes & levies, the council via rates & perhaps fuel taxes & targeted rates, the Government via those taxes & levies.

If there are fewer users, or use is far more efficient courtesy of the self-drive & decline of private ownership, government & council will pursue ways to lower their costs. And when they discover less road surface is needed, or they can get away with providing less, they will reduce maintenance. Much like Auckland Council’s decision not to mow the berm outside your house anymore, authorities will see the way clear to trim road surfaces based on saving money – 4 lanes back to 2 and, within suburbs, 2 back to a single lane.

This can happen because there will be fewer parked cars, and eventually none, the self-drives will be able to negotiate a single lane, and.. well, you’ll have even more berm to mow. The road surface that remains will be a coarser, cheaper product next time it’s laid, the maintained suburban road surface can be shrunk, and arterials – even motorways – probably can too.

You’ll turn your garage over to storage, or another bedroom, or a games room or home office.

The city end of the equation

Your decision on how to travel will be driven by external imperatives – council maintenance costs, shifts in tax spending, reduced provision of parking. Many of the parking lots around the inner city have existed because of property development downturns. The bungy site on Victoria St, right in the heart of the city, is vacant because the 1987 property & sharemarket crashes killed development plans, and more recent plans there have been more grandiose than real.

Feeding on to Victoria St East, the exit from the council’s Victoria St parking building is briefly on to High St – which is a popular nominee as one of the streets for a council project to trial more car-free areas. The council’s Downtown parking building has been considered for a number of years as a high value development proposition. Changes such as those would be dramatic, but no longer whimsical once self-drive vehicles start to appear.

Now to city occupants, and then to fringe centres

Offices & apartments without parking provided will become the norm, and those old basement parking floors will lose that value. Owners will look to new uses in old buildings and design parking out of new buildings. In the old buildings that will be an interesting exercise, because in many of them the ceilings will be too low. It will take ingenuity to find economic solutions.

For the individual, you’ve lost your parking floor in the office building, and all the other parking floors & parking buildings are being converted. You will be forced to seek other travel options – bus & train for distance or, as we’re starting to see, bike or scooter for shorter journeys.

But not everybody works in a central city office or shop. Suburban work centres are likely to face the same pressures for change, and industrial precincts might too. Think, as a property owner, what you can do with the space occupied by 30 or 50 employees’ cars. Tenants, especially in outlying areas, pay low rent for parking. Building them out will provide a better return.

Other consequences

If you accept that these kinds of change are not just on their way sometime, but more likely imminent – perhaps within a decade – you can turn your mind to other consequences.

Fewer cars, fewer motor mechanics, a whole sector of insurance becomes redundant. Car sale yards & car loans will be history. Tradies will become lords of the road, but their costs will also rise through higher contributions for upkeep. Delivery vans will have a bigger role.

Just the change from oil to electric is a revolution in itself. The oil industry has held sway for a century, but its decline will be swift if battery-operated travel can prove efficient, practical & cheap. That will ring in momentous change in international affairs, in economic relationships, in degrees of political power. Revolutions in self-drive & public transport will force local change.

Real or unreal? We don’t know yet. What we do know is that if change like this is catapaulted into our lives, it pays to start thinking of options early.

Attribution: Comment.

Continue Reading

Revaluation handy, but Precinct performance goes far beyond that

Precinct Properties NZ Ltd attributed its profit lift for the June year to revaluation gains, but the company’s performance goes far beyond that fortuitous statistic.

Revaluations were $16.4 million higher than last year, and the company’s bottom line rose by $15.8 million, a 12.9% increase, but Precinct’s construction programme will reshape 2 key commercial areas of Auckland, while it’s just negotiated new Crown leases in Wellington, a major success for both commercial landlords & the Government in rationalising office use in the capital on more efficient rent structures.

Demolition of the Downtown Shopping Centre is underway in preparation for the development of Commercial Bay, which will have a new PricewaterhouseCoopers office tower on the Customs St West-Lower Albert St corner and retail through to Lower Queen St.

That project coincides with the start of works for the city rail link tunnels, which will run under Commercial Bay en route from Britomart round to Albert St.

In the Wynyard Quarter, Precinct has new construction under way for the Innovation Precinct and is also transforming the old Mason Bros industrial building into new office premises.

To do all this, Precinct has secured a new 5-year $860 million facility yet held its gearing down to 14.4%.

Highlights:

  • Net profit after tax, up 12.9% to $138.2 million ($122.4 million in 2015)
  • Net operating income, up 6.6% to $72.8 million ($68.3 million)
  • Property portfolio revaluation gain, $81.2 million ($64.8 million)
  • Net tangible assets/share, up 5.4% to $1.165 ($1.105)
  • Full year dividend, 5.4c/share (5.40c/share), representing a 90% payout ratio
  • Earnings guidance for 2017, 6.2c/share, with the 2017 dividend expected to rise 3.7% to 5.6c/share.

Securing the growth strategy

Precinct began $1 billion of developments in the year to June, with an estimated return on cost of 18%. Highlights of that programme:

  • Secured earnings growth through leasing success, with all office developments now 74% pre-leased on a weighted average lease term of 13.1 years
  • Law firm MinterEllisonRuddWatts announced as tenant at Commercial Bay, moving from the top of Shortland St to the new PwC Tower, taking pre-leasing to 60% by income
  • International fashion retailer H&M secured for the cbd flagship store at Commercial Bay
  • Commitment by the Crown to 68,000m² on a weighted average lease term of 14.6 years at Bowen Campus, Pastoral House, Mayfair House & 3 The Terrace, as well as an extension to the existing lease at 1 The Terrace
  • Achieved 86% pre-leasing at Wynyard stage 1, with Mason Brothers building restoration on track for completion in 4 months and the Innovation Building on track for completion in mid-2017.

Reducing funding risks:

  • Secured a new 5-year $860 million facility, extending the weighted average debt maturity profile to 5.1 years at 30 June 2016 (4.6 years in 2015) and ensuring no refinancing risk during peak development period.

Precinct is in a strong financial position with gearing of 14.4% and sufficient funding capacity to deliver its committed developments.

Strengthened portfolio

  • Weighted average lease term across the portfolio extended to 6.3 years (5.0 years), increasing to 8.2 years when current developments included
  • Record activity levels as 135,000m² leased
  • The portfolio is under-rented by 3.6% (last year 1.8%), Auckland by 6.6% but Wellington at market.

Chief executive Scott Pritchard said yesterday 2 post-balance date signings outshone a brilliant year:  “The operational & financial results for the year, as well as the commitments to Commercial Bay & Wynyard Quarter stage 1, were significant highlights. However, the post-balance date commitment by the Crown to 68,000m² of Wellington office space was arguably the key achievement as it will transform the quality of our Wellington government portfolio.”

Then, yesterday, he announced MinterEllisonRuddWatts’ commitment to the new PwC Tower and said leasing at other Auckland buildings remained strong:

  • HSBC Bank extended its lease in 1 Queen St and committed to relocate in 2019 to 188 Quay St, taking naming rights over the building when PwC moves from there across the road to Commercial Bay
  • Real estate agency Colliers International has also committed to relocate to 188 Quay St, which largely removes the vacancy risk from PwC’s relocation to Commercial Bay.

“Including the Government leasing, our team have leased an impressive 135,000m² of office space in the year, which is equivalent to over 4 PwC Towers. Following this success, leasing risk has substantially reduced, enabling us to have greater confidence in our ability to deliver our long-term strategy & earnings growth.

“We ended the year in a strong position. Our buildings were 98% occupied (98% in 2015) with an overall weighted average lease term of 6.3 years (5.0 years), extending out to 8.2 years when the 3 developments are included.”

Links:
Precinct annual report
Result presentation

Attribution: Company release.

Continue Reading

Herald site back on market as rail tunnel gets formal kickoff

Mansons TCLM Ltd’s NZ Herald property on Albert St in downtown Auckland – named 1 Mills Lane – was put on the market yesterday through Bayleys Real Estate agent Paul Hain.

Offers for the vacant 4258m² property close on Wednesday 13 July.

Mansons had intended to develop 55,000m² of twin hotel & residential towers, office, retail & parking on the site, which has 3 street frontages, and is offering it with resource consent in place, preliminary design work & concept drawings completed for 52- & 46-storey twin towers.

The development company has demolition consent for the site’s 5 existing buildings, which contain 15,056m² of space, all vacated when the NZ Herald moved at the end of last year to the new NZME building erected by Mansons on Victoria St West for the news business’s parent company.

The vacated site is in 3 titles of 369m², 451m² & 3438m² and faces Albert & Wyndham Sts, and Mills Lane, a short service lane running between the Herald site and buildings fronting Queen St, from the former BNZ tower through to 151 Queen St. Mills Lane continues along the back of the Stamford Plaza hotel.

Bayleys said the latest Architectus proposal combined a 5-storey podium with 2 residential towers, about 180m & 200m high, containing about 350 apartments & a 200-room hotel.

The podium would accommodate retail, cafés & restaurants, and the design includes courtyard spaces along with hotel facilities such as a gymnasium & a pool.

The hotel would be accommodated on the lower 20 levels of the eastern tower, with entrances from both Albert St & Mills Lane. It would have a restaurant off Albert St, opening onto a private courtyard.

Rail tunnel construction coming first

The formal launch of the city rail link tunnels on lower Queen St outside Britomart yesterday.

The formal launch of the city rail link tunnels on lower Queen St outside Britomart yesterday.

Private family company Mansons (Ted Manson & sons Culum, Luke & Mac) unveiled its plans for the $675 million redevelopment of the Herald site a year ago, with completion envisaged for 2018. But, although it has consent in place, work on the site would be seriously impeded during the construction of the early stages of the city rail link tunnels from Britomart station and up Albert St.

Mayor Len Brown & Prime Minister John Key joined in the formal start of that tunnel’s construction yesterday with a ceremony on lower Queen St, in front of Britomart station.

The twin tunnels will run under the site of the Downtown shopping centre, which closed last weekend. Demolition of the centre has begun, and owner Precinct Properties NZ Ltd will replace it with Commercial Bay – a 39-storey tower fronting lower Albert St & Customs St West, with multi-level retail on the Queen St side (consuming Queen Elizabeth Square if an Environment Court appeal by opponents fails, or facing the square if the appeal succeeds).

Images: The Herald site on Albert & Wyndham Sts & Mills Lane.
The formal launch of the city rail link tunnels on lower Queen St outside Britomart yesterday.

Earlier story:
18 May 2015: Mansons unveils Herald site plans

Attribution: Bayleys.

Continue Reading

Propbd on Q T2Feb16 – DJ’s settles, third Melbourne Ryman, Fletcher sells Rocla assets, Warehouse opens at Atrium, ethics consultation

David Jones settles Kirkcaldie’s deal
Ryman buys third Melbourne retirement village site
Fletcher nets $85 million from Rocla divestment
Warehouse moves to Atrium on Elliott
Ethics standards for property sector out to global consultation

11.25am:
David Jones settles Kirkcaldie’s deal

David Jones Pty Ltd has settled its agreement to take assignment of Kirkcaldie & Stains Ltd’s main store lease on Lambton Quay in Wellington and to pay $A400,000 cash for the name ‘Kirkcaldie & Stains’.

Kirkcaldie & Stains is still awaiting High Court approval of a scheme of arrangement to return $19.4 million of capital to its shareholders. The company is seeking court approval to cancel 4 in 5 of its shares and return $2.3602/share cancelled. It also wants to wind up the employee share scheme.

The David Jones store would be the first for the brand outside Australia, but brand owner Woolworths Holdings Ltd’s 36th store in New Zealand. South African retailer Woolworths Holdings acquired David Jones in August 2014 for $A2.1 billion. Its other brands here are Country Road, Witchery, Trenery & Mimco.

Ryman buys third Melbourne retirement village site

Ryman Healthcare Ltd said yesterday it had bought its third retirement village site in Melbourne’s eastern suburbs.

The New Zealand company will redevelop the 2.5ha site in Burwood East into a $200 million ($A183 million) retirement village for over 400 residents, with independent living apartments & an aged-care centre which will include specialist dementia care. The new village will also have a swimming pool, café, gym, beauty salon, library, movie theatre & bowling green.

Ryman has entered into an unconditional contract to buy the site, which is part of a Frasers Property Australia redevelopment of the 20.5ha former Burwood East brickworks.

Frasers Property Australia has plans for a $A500 million-plus redevelopment of the site, which will include 900 homes and a large retail centre.

Ryman opened its first Australian village at Wheeler’s Hill in Melbourne’s eastern suburbs in 2014 and is developing a second village at Brandon Park. Managing director Simon Challies said Ryman’s in-house team would design the new Burwood East village, and the company intended to apply for planning permission in late 2016.

Mr Challies said the Burwood East purchase put Ryman on track to fulfil its ambition of opening 5 villages in Melbourne by 2020.

Fletcher nets $85 million from Rocla divestment

Fletcher Building Ltd said on Friday it had completed the $A150 million divestment of Rocla Quarry Products assets to Hanson Construction Materials Pty Ltd, following clearance from the Australian Competition & Consumer Commission and Foreign Investment Review Board.

In addition, Fletcher said it had sold Rocla assets excluded from this transaction to other parties for an extra $A44 million.

Fletcher said it would make an $A77 million ($NZ85 million) after-tax profit from the Rocla sales, less transaction costs & adjustments to asset carrying values.

This transaction doesn’t affect the ownership of Fletcher Building’s Rocla Pipes & Concrete Products or GBCWinstone businesses, which remained core elements of its portfolio.

Warehouse moves to Atrium on Elliott

The Warehouse Group Ltd has secured a long lease in the Atrium on Elliott for an 1800m² store to replace its second-floor premises in the Downtown Shopping Centre, which Precinct Properties Ltd will demolish to make way for its new Commercial Bay development.

The Atrium on Elliott shop opened last week and the Downtown shop will close in May.

The Atrium on Elliott is a 14,000m² 4-level enclosed shopping centre & food court at the base of the Crowne Plaza Hotel & BDO Tower.

Alison Laity, director of Atrium owner Colwall Property Ltd, said: “Having the Warehouse opening alongside existing large-format retailers Rebel Sport & No 1 Shoe Warehouse has greatly boosted our leasing inquiry. We just wish we had more space to lease. Currently we have limited opportunities available within the centre, and we expect these to be snapped up quickly – especially with the impending closure of Downtown shopping centre.”

Ethics standards for property sector out to global consultation

FIABCI (the International Real Estate Federation) has won the support of 63 land, property & construction professional bodies & standard-setting organisations for a global consultation on ethics principles.

The international ethics standards coalition launched its consultation document this week and will close the consultation on 30 April.

Link:
Consultation document

Earlier story:
19 August 2015: International ethics standards coming for real estate professionals

Attribution: Company releases, FIABCI.

Continue Reading

Key turns positive on rail link and promotes faster East-West project

Prime Minister John Key found many positives on the economic front when he addressed a Chamber of Commerce audience in Auckland on Wednesday.

For Auckland, much of the positive was in transport infrastructure – some of it the slow dawning of the realisation that holding up one public project can be detrimental for many private projects.

On the economy generally, he said dairy prices were low globally, but the New Zealand dairy sector was well placed to attract middle-class customers in key markets. “In the meantime, tourism, construction, international education, ICT, high-tech manufacturing, services & a number of our primary industries are all growing and underpinning a solid outlook.”

Treasury’s latest forecasts showed economic growth averaging just under 3% over the next 5 years.

The Government was working to bring the unemployment rate down from 6%. New Zealand’s employment rate was the third highest in the developed world. 160,000 more jobs were created in the last 3 years, nearly 66,000 of them in Auckland, and Treasury expected another 195,000 jobs to be created nationally by 2020. Under this government, the average wage had increased by more than double the rate of inflation.

City rail link:

Mr Key said it had become clear that the Government needed to provide certainty for planned cbd developments affected by the city rail link, so he confirmed the Government’s funding commitment to the project from 2020. He said: “CBD employment levels are still some way from the 25% growth threshold. But strong growth in rail patronage since 2013 means it will reach the 20 million annual trip threshold well before 2020.”

The Government set those thresholds in January 2014, when Auckland mayor Len Brown told Mr Key he wanted construction of Auckland’s city rail link brought forward to start in 2016.

In the face of the rising number of development projects whose success – and efficient construction – hinged on the rail link being put in place, the Government’s intransigence on timing was daft. On Wednesday, Mr Key said the council had indicated Government confirmation would allow construction of the rail link’s main works to start in 2018, at least 2 years earlier than currently envisaged.

“It would also allow the council to get on with negotiating contracts and providing certainty for investors in other important Auckland cbd projects. These include the $350 million NDG Auckland Centre next to the new Aotea Station and the $680 million Commercial Bay tower opposite Britomart.

“Timely confirmation of these & other projects, alongside the rail link, will encourage more people, businesses & jobs into the heart of Auckland. It should also reduce the period of disruption in the central city by concentrating construction over a shorter timeframe.

“We still need to work through a number of important & quite complex issues with the council. These include how project costs will be finally shared between the Government & the council and how the rail link will be owned & managed. Providing these issues are resolved – and I’m confident they can be – we’ll aim to finalise the business plan later this year.”

Auckland Transport figures show that rail patronage increased 22.9% or 2.9 million trips to 15.4 million trips last year. At current growth rates, the patronage target of 20 million trips/year would be achieved at the end of this year, 3 years ahead of schedule.

East-West Connection a priority:

Mr Key confirmed the East-West Connection between the Southern & South-western Motorways would go through a streamlined consenting process this year to bring forward its construction. It’s another large & complex project, estimated to cost over $1 billion: “It’s a priority for Auckland because it will improve travel & freight times in this busy part of the city. It will also provide much better access between the eastern suburbs and the airport. We consider it a project of national significance.”

The streamlined process means a consenting decision will need to be made within 9 months of application: “Subject to approval, it’s the Government’s intention to fund the East-West Connection through the Land Transport Fund so construction can start as early as 2018. I’ve asked ministers & officials for advice on how this can be managed & achieved. In the meantime, the NZ Transport Agency will start early project work later this year on widening State Highway 20 between Neilson St & Queenstown Rd. This is integral to the wider East-West Connection and will support traffic growth when the Waterview tunnels open.”

Other infrastructure:

Mr Key said $4.2 billion would be invested in transport in & around Auckland in the next 3 years. He said the Government was on track to complete the western ring route by 2019 – the Te Atatu & Lincoln interchanges would open in March, the Waterview connection early next year.

Construction of the $1.3 billion Ameti (Auckland-Manukau eastern transport initiative) was underway. Stage 1 has been completed and work has started on designing & consenting for stage 2.

The Southern Motorway upgrade started in October and is scheduled to be completed in late 2018.

Construction of the Northern Motorway upgrade is expected to start in 2018, connecting with the western ring route and completing the northern busway extension through to Albany [from Silverdale].

Earlier stories – city rail link:
17 April 2015: Rail link now just 2 years from hitting government funding threshold
26 February 215: Elation at Downtown rail, tower & square deal
10 December 2014: Council majority rejects softer approach to Government on rail link
8 December 2014: Brewer congratulates auditor-general for stopping mayor in his tracks
5 December 2014: Mayor proposes 3-year delay for city rail link construction
5 September 2014: Quax highlights census figures on low train use
31 March 2014: Rail link debate drowned in hot air
1 June 2011: Government says “not yet” for cbd rail loop, mayor says “all go”
25 November 2010: CBD rail loop business case unveiled

East-west:
21 December 2015: East-West project enters preliminaries phase
6 December 2015: How Panuku proposes to lead transformation of Auckland
28 August 2015: Council & government sign transport alignment terms
19 June 2015: Foreshore highway the new east-west preferred scheme
17 June 2015: Propbd on Q W16Jun15 – 5 sell at Colliers, 6 units sell at Barfoots, east-west link back on table
6 October 2014: Selwood says new east-west connection proposal leaves long-term strategy unclear
3 October 2014: East-west “connections” feedback sought – with no closing date
17 January 2014: Transport agencies ditch east-west plans south of Manukau
6 December 2013: Council committee calls halt to motorway thinking for industrial “back” of city
2 August 2013: Brownlee commits to more Ameti & East-West Link work

Attribution: Speechnotes.

Continue Reading

Propbd on Q W27Jan16 – Airport upgrade, QE Square

Airport upgrade continues
Precinct set to complete QE Square deal

Airport upgrade continues

Auckland International Airport Ltd said at the weekend the $160-180 million upgrade to its international departure area would include a new security processing zone, new passenger lounge & shopping hub.

Chief executive Adrian Littlewood said the expansion project was the next step in the development of a combined domestic & international terminal.

American architects Gensler and local practice Jasmax have designed the revamp.

Construction of the new international departure area by Fletcher Construction Co Ltd & specialist sub-contractors began late last year and will continue until early 2018.

The airport company will complete a new domestic departure lounge for use by Jetstar’s regional passengers in February, and open the first of several new gates on Pier B of the international terminal at the end of this year to accommodate the latest generation A380 & B787 aircraft.

Precinct set to complete QE Square deal

Precinct Properties NZ Ltd said last week it looked forward to confirming its agreement to buy the 1900m² Queen Elizabeth Square from Auckland Council, subject to no appeal being raised after the council notified the hearing commissioners’ decision on the plan change.

Precinct & the council entered into a sale agreement in February 2015 conditional on the land being rezoned.

Link: Private plan change 79 decision

Earlier stories:
20 January: Propbd on Q W20Jan16 – QE Square rezoning approved, Tamaki campus rezoning approved, Furniture City sold, SkyCity guidance up
14 December 2015: 
Precinct all set to transform Downtown

Attribution: Company releases.

Continue Reading

Precinct all set to transform Downtown

Precinct Properties NZ Ltd said on Friday it had the finance in place, 52% office precommitment and would proceed with its $681 million Commercial Bay redevelopment of the Downtown shopping centre site in the Auckland cbd.

Commercial Bay was the name given to Auckland’s trading hub in the 1800s.

Accountancy firm Pricewaterhouse Coopers will move from its 33-storey waterfront tower on Quay St, which Precinct owns, and take naming rights on the 39-storey tower Precinct will build across Lower Albert St, on the corner of Customs St West.

Precinct chief executive Scott Pritchard said the new tower had achieved 52% precommitment, but that includes at least some cannibalising, starting with the shift of prime tenant PWC. Mr Pritchard said 4 businesses new to its portfolio had committed to the tower.

Retail leasing started recently and Mr Pritchard said negotiations were advancing with a range of mini-major retailers for the flagship stores. Still to come, though, is approval of Precinct’s private plan change 79 to rezone Queen Elizabeth Square, enabling most of the square to be redesignated from public space to commercial use so the prime lower Queen St retail strip can be created, leading into internal lanes. The hearing panel expected to release its decision before Christmas.

Precinct will fund the development through newly established 5-year bank facilities. Its current gearing is an extremely low 12.5%, which had enabled the company to fully fund the project on commitment. Following the commitments to Wynyard Quarter stage 1 and to Commercial Bay, Precinct’s committed gearing is around 35%.

The company acquired the Downtown site for $91.3 million and has spent $16.3 million in design & consultancy fees. Its forecast is to spend $573.4 million more to complete the development, which is projected to generate a yield on cost of 7.5% once fully leased.

The development will have 3 retail levels, including lower level of the HSBC Building on the corner of Quay & lower Queen Sts, and Zurich House at 21 Queen, on the corner of Customs St West. Retail net lettable area will total 18,000m², occupied by about 100 stores with frontages to Queen, Albert, Quay & Customs Sts.

The tower will have net lettable area of 39,000m², a sky lobby positioned above retail and 30 office floors above that. Floorplates will range from 1324-1375m². The tower will have mid-level plant at levels 22-23, basement parking for 278 cars and 3 parking levels with direct access to the new PwC Tower, Zurich House & HSBC Building.

The city rail link’s 2 tunnels will run through basement levels 2 & 3.

Precinct has entered into a construction contract for the development with the Fletcher Construction Co Ltd and expects to start work in June 2016 with demolition of the Downtown Shopping Centre, and to open the Commercial Bay retail centre by October 2018. The office tower would be completed in mid-2019.

Reflecting its development agreement with Auckland Council, construction will also include works to complete the tunnels under Commercial Bay for the city rail link.

Commercial Bay, linking Precinct’s new PwC Tower, Zurich House & HSBC Building on the Downtown shopping centre block, AMP Centre & existing wC Tower on the adjoining block.

Commercial Bay, linking Precinct’s new PwC Tower, Zurich House & HSBC Building on the Downtown shopping centre block, AMP Centre & existing wC Tower on the adjoining block.

Commercial Bay will integrate the adjoining Precinct-owned PwC Tower, AMP Centre, HSBC Building & Zurich House to create a new central business, entertainment & retail destination. On completion, Precinct estimates 10,000 workers will occupy space within these 5 towers, each of which will have direct access to the retail centre.

Mr Pritchard said the Commercial Bay project was consistent with the company’s long-term strategy of maximising value through concentrated ownership of prime assets in strategic locations.

On completion of the development, Precinct’s total investment in Commercial Bay is expected to be worth about $1.5 billion, representing 63% of the value of its portfolio at that time.

Rail link works also set to go

Precinct & Auckland transport have concluded negotiations for the first stage of the city rail link project to be constructed as part of the Commercial Bay development.

Mayor Len Brown said the Government was committed the project: “The only remaining issue is the timing of government funding.” He said discussions with Prime Minister John Key and the ministers of finance & transport were going well.

“The private sector is demonstrating its confidence in Auckland’s future by investing billions in our city centre. Central Auckland is New Zealand’s most productive, largest & fastest growing commercial & employment centre. It has long been said Auckland is the powerhouse of the New Zealand economy. That is now a reality.

“Growth is the reason we are backing private sector investment with better public transport. We simply cannot meet that growth by moving more people into the cbd by car. The city rail link will more than double the number of people we can bring in by our new electric trains.”

Link: Commercial Bay

Earlier stories:
8 November 2015: Urban designer says fix the surrounds before selling square
26 February 2015: Elation at Downtown rail, tower & square deal

Attribution: Company & mayoral releases.

Continue Reading

Precinct steers a bold course

Precinct Properties NZ Ltd has set itself apart from its peers, and in the early stages it’s been successful.

The next stage, as the company turns to development, will be a far more interesting departure from the often stodgy look of the sector as a solid, safe haven.

Other large listed property entities have taken on some development – notably Kiwi Property Group Ltd at Sylvia Park, Stride Property Ltd (ex-DNZ Property Fund) in recent months at Westgate, Argosy Property Ltd with a major Wellington refurbishment, and Goodman Property Trust has development as a regular feature of its business at Highbrook & other business parks, and now in the Viaduct.

Precinct is working on 3 projects which have significance geographically and as central business area catalysts – the Downtown block redevelopment at the foot of the Auckland cbd, the Innovation Precinct in the Wynyard Quarter and the Bowen Campus in Wellington’s government office zone.

While the dimensions of each project are large, they come with a very different balance sheet from most in the listed property sector, and they also come with changes at board & executive levels.

The listed property sector learned from business downturns that gearing above 40% is risky, and most stick to a debt level in the range of 30-40%. Precinct this year has dropped its gearing from 33.8% to a low of 11.3%, with expectations that it will rise as development occurs.

It’s also diversified its debt sources, along the lines started by Goodman Property Trust when bankers proved unreliable allies at the start of the global financial crisis 8 years ago, but going even further this year with a $173 million US private placement, the first of this kind of debt for the sector, and a local bond issue, on top of raising $174 million in equity from shareholders.

Precinct lifted its net profit after tax by 4.5% to $122 million, operating profit 7% to $68 million, gained $65 million in revaluations, and increased net tangible assets from $1.04 to $1.11/share.

Company chair Craig Stobo told the annual meeting in Auckland on Wednesday the US placement & bond issue “provide greater comfort around Precinct’s financing through a period when it is contemplating undertaking significant development activity. Both transactions have diversified Precinct’s funding sources and added valuable tenor in a laddered approach.

“Last year we also completed sales of our non-core assets, and we are on track to meet our vision for a portfolio of younger buildings. Our portfolio is now all located in prime locations. And indeed our Downtown development site is in the prime location in New Zealand.”

Pritchard on strategy

Chief executive Scott Pritchard explained the Precinct growth strategy of having concentrated ownership of assets in truly strategic locations: “The key feature of the strategy is having ownership of a number of buildings in one party’s hands in the best locations, and for Precinct to then be able to influence the tenancy mix, the associated amenity and, importantly, the quality of the real estate.”

Such strategies can, of course, go wrong, as insurers the AMP Society (Precinct’s founder) & NZI found in the 1980s. NZI aggregated a whole block from Queen St through to High St, except for one small title, then saw the holding dismantled as the market turned rapidly downward. NZI had multi-tower visions for Chancery which also foundered, while AMP entertained thoughts of bridging across Victoria St East between new headquarters and a redeveloped Whitcoulls site.

All those schemes were grand beyond wild dreams and typically ended in the dustbin when the upcycle inevitably ended. Nowadays, international turmoil could change business cycles overnight, but there is more to all 3 of Precinct’s major projects than a 1980s-style flight of the imagination.

Here, there’s a highly important difference, as Mr Pritchard noted: “We have taken advantage of the market cycle. We purchased $244 million of real estate in 2012 when the market was soft and have sold $274 million of assets in the last 12 months when the market has been very strong.

“The assets we acquired are now worth $45 million more than what we paid. Similarly, the assets we have sold were sold for $42 million more than what they were worth 3-4 years ago. This represents an $87 million creation of value. Following these sales and the capital management initiatives identified by the chairman, we are very pleased to both reduce gearing and advance new developments while also maintaining dividends.”

The Downtown redevelopment fits in with repositioning of public transport in the cbd, further reduction of the roles of private vehicles & parking buildings, revisiting the role of public gathering places, and better acknowledging the rise in volume of cruise ships arriving in a business district which has been hopelessly, embarrassingly out of tune with that sector.

Mr Pritchard told shareholders: “We have followed a strategy for transforming the company and growing value, while continuing close management of risk & reward. We have remained experts in cbd real estate and continued to build strong business partnerships. We have focused our resources on key opportunities in key precincts and shifted the balance of our portfolio towards Auckland.

“Pleasingly, we are seeing strong demand from current clients who want to expand or, in some cases, want more space because their businesses are growing and they are hiring more people.
“We are also happy with Precinct’s position in Wellington. Our asset sales helped right-size our portfolio in this market. Clients remain keen to get quality corporate space which remains at a premium.

“In Auckland we are enjoying the benefits of strong population growth, leading to vacancy levels at all-time lows, ensuring that our portfolio is fully occupied. Global research also shows that employees & residents worldwide are moving back to the cities as urban areas are regenerated.

“Recent research by CBRE confirms that in Auckland the large majority of occupiers have a preference for space near the waterfront. Auckland’s cbd will grow by around 1750 new workers every year for the next 6-7 years. An estimated 200,000m² of new space will be needed to meet this demand.”

Turning to the Wynyard Quarter, Mr Pritchard said: “We will invest around $84 million in stage 1 developing 2 buildings, which are already 70% leased. The 8100m² Innovation building is entirely preleased to Ateed (council company Auckland Tourism, Events & Economic Development Ltd) on a 12-year term, housing Grid AKL, which is an exciting opportunity for Auckland City. The Mason Brothers building is 25% pre-leased to architects Warren and Mahoney on a 10-year term.

“The expected annual rental, fully leased, is $6.7 million, representing an 8% yield on cost, with an expected valuation of $98 million on completion. We expect to begin construction this month, with the Mason Brothers building finished by December next year, and the Innovation Centre at the site completed in July 2017.”

Economic environment, and internal advances

In closing, Mr Pritchard said: “We think the economic environment remains positive. We have seen some risk from lower commodity prices & rising construction costs and we always need to allow for global financial shifts. But Precinct is in a good position. We are well funded, well placed in strategic, central locations and have a quality portfolio. The occupier market is strong, with demand expected to remain high for some time. The Auckland cbd retail market continues to go from strength to strength, with pedestrian counts up, new entrants arriving and more established retailers returning.”

Longstanding director Graeme Horsley retired from the board at the annual meeting, replaced by Australian director Launa Inman. While Mr Horsley’s independence & expertise must be missed, Ms Inman has arrived with an impressive CV across a range of businesses, including directorship of the Commonwealth Bank and growing her own enterprises.

When a shareholder asked why not replace Mr Horsley with someone of similar stature, Mr Stobo responded: “The company has changed – from 6 staff to over 40, and a depth of experience we never had before. Graeme was critical to our understanding. In addition, we have directors who have deep property experience in Australia & globally.

“For the next stage we were looking for a person who had experience in retail. Launa filled those ticks for us, so I think we have a good spread of expertise.”

Mr Stobo also expanded on the changes in debt sourcing after a shareholder suggested it was forced by banks reducing their lending. Not so, Mr Stobo said: “We’ve been concerned about laddering & diversifying our sources of funding to keep a tension in pricing. The banks are keen for us to use them, but we’re not solely relying on them anymore.”

Attribution: Annual meeting.

Continue Reading

Urban designer says fix the surrounds before selling square

Auckland Council agrees to sell a square because it’s a dud, the recipient applies to rezone the space and leaves the related downtown changes out as irrelevant – and a quiet, unassuming but leading architect dissects the spiel and finds it wanting in the extreme.

Others made similar charges that the application by Precinct Properties NZ Ltd to rezone Queen Elizabeth Square was essentially incomplete. Graeme Scott (pictured) took 2 steps further:

First, he concluded you could reasonably find it wasn’t the space that was flawed, but the applicant’s buildings beside it.

Second, he found the council consultant planner’s conclusion that this plan change was the best outcome was an unsubstantiated leap based on flawed reasoning.

Third, he suggested a way to improve the square and to enable Precinct to build on some of it as well.

The hearing of Precinct’s private plan change 79 application to rezone the square closed on Friday, apart from some information to go from the council to the hearing panel, and a decision is expected before Christmas.

Queen Elizabeth Square towards the old CPO (Britomart), Zurich House on the right.

Queen Elizabeth Square towards the old CPO (Britomart), Zurich House on the right.

Most opponents oppose. Mr Scott told the plan change hearing panel on Friday: “I am presenting expert evidence on behalf of the Urban Design Forum. The forum is a long-term & ardent supporter of the city rail link, and supports Precinct Properties in its plans to develop the Downtown block. Nothing in this statement should be taken as an attempt to obstruct or delay these projects.”

Unquestionably, Mr Scott’s expertise was highly relevant. He’s been an architect since 1973, a director of his own firm since 1981, is a fellow of the Institute of Architects, a member of its urban issues group since 1996 & chair for 4 years, chairs a Hobsonville Point design review panel, is a member of Auckland Council’s urban design panel and chairs the Urban Design Forum, which has a cross-disciplinary membership of professionals involved in design of the built environment and promotion of good urban design outcomes.

Mr Scott shared council consultant planner Ross Cooper’s view that Queen Elizabeth Square “is regarded as a highly unsuccessful public space” and Reset Urban design firm director Garth Falconer’s view that the square “is an uncomfortable space”.

He also agreed with Mr Falconer’s analysis of the square’s positive & negative attributes. Then he noted that many of the negatives “derive from the current condition of the Downtown Shopping Centre, the lower levels of the HSBC Building (at 1 Queen St) and the pedestrian canopy that bisects the current square”.

Mr Scott listed Reset Urban’s negatives:

  • Residual space acts as a forecourt to the mall
  • Few facilities
  • Cut off & subdivided
  • Poor link to the waterfront
  • Not good gathering civic space
  • More a retail forecourt than a civic or recreational space.

And the positives:

  • Adjacent to lower Queen St
  • Enroute between the city & the waterfront
  • 1900m² sizeable space
  • Opposite the old chief post office, now Britomart Transport Centre.

Mr Scott’s conclusion from those: “An unbiased reading of those negative & positive elements would not, in my view, inevitably lead to the conclusions that the space is fatally flawed, but would rather suggest the buildings on the western side of the square need major design attention.”

Across Queen Elizabeth Square to the Downtown Shopping Centre from Britomart, the PWC Tower at rear.

Across Queen Elizabeth Square to the Downtown Shopping Centre from Britomart, the PWC Tower at rear, Zurich House to the left, HSBC Building to the right.

Council reports all treat sale as a given

Mr Cooper said in dismissing the Urban Design Forum’s submission that Precinct’s rezone application “is a legitimate response in the context of the existing rules applying to the site & surrounding and, given the political decision by Auckland Council to sell the land”. Mr Cooper also said the cost shouldn’t be assigned to the plan change so much as to the council disposal decision.

Mr Scott: “All the council reports adopt this view, and treat the sale of the land as a given. They then seek to explain why the public good & urban design outcome will be better than the existing condition.

“This reasoning is flawed. The council committee agreed to sell the land once certain conditions were met. One of these conditions was ‘the outcome of the necessary statutory processes’, and I presume this hearing is the key part of that process.”

Mr Cooper set out the regulatory framework for a decision, including meeting the Resource Management Act requirement that ‘each provision is to be examined as to whether it is the most appropriate method for achieving the objectives of the district plan by…. identifying other reasonably practical options for achieving the objectives’.

Mr Scott: “I have no evidence that any options have been explored but, by way of example, will present one myself.”

“Unsubstantiated leap to a conclusion”

On his way to doing that, Mr Scott delivered an even more devastating assessment of how a supposedly impartial report on an application turned out to be “no more than a cataloguing of the history & planning status of the site, and an unsubstantiated leap to the conclusion that the proposed plan change is the best outcome”.

Mr Scott noted the district plan provisions of a public open space precinct that Mr Cooper set out, and commented: “Nowhere is there mention of reducing or disposing of public space. Yet in the following line he states, without explanation, that in his opinion the district plan objectives would be best met by rezoning the space to enable buildings.”

Auckland Council principal urban design specialist Yvonne Weeber said in her report she couldn’t consider alternative open spaces in size & relationship to Queen St, but concurred with submitters that “the loss of a large public open space must be considered more than minor”. Yet, in her conclusion, she wrote that “the proposed plan change to delete Queen Elizabeth Square as public open space is appropriate”.

Mr Scott said this conclusion “is based entirely on design improvements to be incorporated in the new Downtown block buildings, and has nothing specifically to do with the incorporation of the plan change land into the site of those buildings”.

Ms Weeber did say a new building facing lower Queen St should enhance that street’s form & functions, but gave no supporting explanation of why aligning this new building along the old street boundary would assist in this.

“In summary,” Mr Scott said, “I consider these 2 reports have been prepared to support the plan change & land sale without the expected unbiased analysis.”

Precinct’s development plan includes an east-west laneway between Queen & Albert Sts and a north-south link through the site, shops along the Queen St frontage, removal of parking from the lower floors of the HSBC Building and all parking going underground, and enhancement of the HSBC Building with a public terrace 3 floors above Quay St.

Mr Scott gave historical examples of promised enhancement in return for public space which turned out badly for public space, and one which turned out far better than an earlier scheme – Britomart. In the 1996 Britomart scheme all streets would have been swept away, but the eventual design that was implemented retained the public street network, “a significant victory for urban design. That philosophy of a retained & enhanced public realm has been a key to the success of the Viaduct & Wynyard developments further west.”

What Mr Scott did on Friday was to turn the equation on its head: The square should remain public open space unless it was bad space, but it shouldn’t be blamed for the poor design of its neighbours. Then he tossed in an alternative, with the comment: “I emphasise that this is just one option, but it does perhaps shed some light on the issues being considered here, not the least of which is the importance of considering options.”

Squares are centred rather than linear space, he said, often with buildings on more than 2 sides. Queen Elizabeth Square is open to Quay St to the north and mostly open to the south, so the space ‘leaks out’. To work, the square’s sense of place “has to overcome the lack of enclosure”, which could be done in a variety of ways.

Pushing the western edge of the square further from the old post office (Britomart) would more than double the sunlit space at 2pm at the end of September, compared to shadow almost halfway across Queen St if the proposed 19m retail façade was built.

Mr Scott said it should be possible to improve the quality of the public space and also give Precinct a commercial benefit by reducing the area devoted to building on the square to 945m² of the square’s 1892m², “but various matters need to be worked through for this to be finalised”.

Mr Scott didn’t comment on the financial aspect of the arrangements between Precinct & the council because it was outside his area of expertise, but couldn’t resist one comment in conclusion: “However, common sense would suggest that a public benefit obtained as a part of the development works, and concurrent with them, will be a better outcome than a promised future benefit on a separate unspecified piece of land which, furthermore, is already in public ownership. This is especially true when those entrusted to deliver on the promise in 2018 have not yet been elected to office.”

In any event, Mr Scott said, major upgrading of public space seemed to be needed every 25 years or so: “Trading ownership of land for what is essentially a repairs & maintenance type of expenditure is short-term thinking, and should not be how we think about the city at this critical time. The sale of public land to private interests, especially where that land is in the central city, should only proceed where the public benefits in doing so are clear & obvious to all. I do not consider this application meets that test.”

Queen Elizabeth Square outlined on the Downtown block.

Queen Elizabeth Square outlined on the Downtown block.

Links: Proposed plan change 79
Proposed rules
Opening up Lower Queen St for pedestrians
Online review

Earlier stories:
4 November 2015: Is public-private co-operation the way to transform Downtown?
2 November 2015: Tussle over QE2 Square goes to hearing tomorrow
17 June 2015: Downtown space design team appointed as proposed changes notified
26 February 2015: Elation at Downtown rail, tower & square deal
12 February 2015: Propbd on Q Th12Feb15 – 5 apartments sell, plan changes approved, QE2 Square, wharves, Aotea

Attribution: Hearing submissions.

Continue Reading

Is public-private co-operation the way to transform Downtown?

Published 4 November 2015, updated 6 November 2015:
The panel hearing submissions on Precinct Properties NZ Ltd’s intention to extend its Downtown shopping centre redevelopment to incorporate Queen Elizabeth Square skipped over a technical objection at the start of proceedings, but returned at the end of the first day asking questions about how the proposal might be varied and what an alternative proposition might include.

The short question before the hearing panel of David Hill (chair), David Mead & Basil Morrison is whether to approve Precinct’s application to change the zoning of the 1892m² square from public open space to a pedestrian-orientated activity area & other consequential changes, and to introduce planning controls for development of the site.

Auckland Council intends to pedestrianise lower Queen St between Customs & Quay Sts, as it was before it became a bus interchange following closure of the Britomart bus station. It would have active edges – the ex-Central Post Office (now the entrance to the Britomart railway station, and offices upstairs) on the eastern side, new shops on 2-3 levels across the new square, on the old square.

Images: The entrance to the east-west laneway from lower Queen St as envisaged by Precinct (above) and (below), Queen Elizabeth Square as it was this week.

qe sq1Precinct & Auckland Council started at different points – Precinct wanting to redevelop the shopping centre it had bought from mall owner Westfield and build a tower on the Lower Albert St-Customs St West corner of the block, the council intent on revitalising the downtown area in a continuing of urban transformation.

The 2 intents coalesced. Precinct’s design includes an east-west laneway that would (sort of) continue the through-site track through Britomart and lead to a possible western extension in the next block. It also includes a north-south link that would create mid-block access between Quay & Customs Sts. Both are means of breaking up large blocks to greater pedestrian access, which the council urban design team has been encouraging.

Where the council & Precinct have got to

The council has already agreed to sell Queen Elizabeth Square (it was originally Queens Square, and I’m told references to it as Queen Elizabeth II Square are incorrect) to Precinct for $27.2 million, conditional on the zone change and with other financial considerations including prices put on tunnelling under Precinct for the city rail link tunnel out of Britomart and for limited Precinct basement parking (278/9 spaces, depending on whose evidence you read).

Precinct’s position, presented yesterday by counsel Derek Nolan, was straightforward – rezone this piece of land, complete the development agreement with the council, and both the rail & redevelopment projects get underway together.

The position was also confusing because, while it made sense to explain the zone change in terms of the overall development, Precinct already has resource consent for its tower, can make many of the other changes without recourse to the plan change and didn’t want a private plan change for a specific element to be expanded into a wider consideration of the whole Downtown precinct.

Cayford spikes a smooth run

Former North Shore City & regional councillor Joel Cayford, now an independent strategic planning consultant who presented submissions for the Auckland Architecture Association & the Auckland Civic Trust, briefly spiked the smooth run to plan change approval when he told the panel the council hadn’t made the section 32 Resource Management Act report on the application available on its website, and that it was required to make the document available to the public during the notification period.

Mr Nolan said it was in libraries and available from the council and, after a short interlude, that was good enough for the panel.

Dr Cayford returned with a history of Queen Elizabeth Square, said Precinct’s private plan change 79 wouldn’t give effect to the Auckland regional policy statement because it didn’t provide for the long-term protection of public open space and was in direct conflict with the policy by removing a public space.

It’s possible for a council panel to reject a private plan change and for the council to replace it with one of its own – it was done by Auckland City Council at Stonefields in 2000. But in this case the council is a very willing partner in a series of actions which will bring about many changes to the foot of Auckland’s central business district.

Dr Cayford noted in his submissions that the option of applying a plan change to the whole Downtown block wasn’t considered. He argued: “We say the test here is whether the plan change delivers the purpose of the Resource Management Act. We say that, while the plan change may deliver to Precinct Properties & Auckland Council what they want, it does not deliver the purpose of the Resource Management Act, and nor does it satisfy objectives & policies set out in the regional policy statement, the district plan and the proposed Auckland unitary plan.”

Whereas Precinct’s planning evidence was that sale of the square would allow the council to redeploy scarce open space resources where they would provide greater social wellbeing, Dr Cayford argued that, “in the absence of any certainty that equivalent open spaces actually exist, these statements are baseless and do not support the [planners] Barker & Associates assessment that, ‘For the above reasons, the objectives of the plan change are the most appropriate way to achieve the purpose of the act.’”

Both Dr Cayford & Auckland University architecture & planning school senior lecturer Bill McKay suggested alternatives, including retaining a portion of the square but also enabling an active edge.

Dr Cayford told commissioner David Mead: “I’m not saying councils are always bad, I’m just saying unless there are conditions it will be lost. Public space is always poor cousin in this transaction. We believe public space is being short-changed heavily in the piecemeal nature of negotiations.

“The PWC Tower, the incorporated societies challenged it. The commissioners asked the same sort of questions, ‘What are we going to do about it [public space]?’ We’re not dog in the manger about this, we subscribe to a road in the middle, it can be taken to the Environment Court and a solution negotiated. There must be a middle way. It’s not our objective to go to court and go to war. We want peace and we want a piece of public space as well.”

Panel chair David Hill asked Mr McKay what the benefit would be if only the shaded part of the square immediately beside the HSBC Building at 1 Queen St was built over. Mr McKay: “It provides a setback to start with. You get Queen St widening out, about 15m-worth on the Zurich House façade, and that’s where you would get your active edge, that’s where you’d put your cafés. When you pedestrianise a street – and we’ve got lots of failed ones around New Zealand – you just get the wind whistling through.”

A bleak square, or just unloved?

The bleak nature of Queen Elizabeth Square – too much shade for too much of the year, windswept – has been emphasised throughout discussion on its fate, and again in Precinct evidence & submissions yesterday.

Dr Cayford said it was recognised before the HSBC Building was erected (as Air NZ House) 45 years ago that it would cause these effects. Answers included demolishing that building or swapping with other pieces of the block where buildings are to be demolished, such as the Albert-Quay Sts corner.

Nothing was made yesterday of changes Precinct has made since it bought Zurich House, on the corner of Queen St & Customs St East – sunfilled ground-floor & first-floor café space. While Westfield has long operated a closed-mall policy, opening more of the Downtown centre’s doors onto the square could have made the square a much more frequented place. Even if Precinct doesn’t buy the square – and it had drawn up plans before that possibility was suggested – a far more open edge could quickly turn the square into a much friendlier environment.

Including the square in Precinct’s redevelopment would add 14,874m² of retail on 3 levels with access from lower Queen St. The proposed 6m-wide east-west laneway would have entrances to individual shops from the lane. Although there would be an arcade inside as well, “The word mall has been banished from our lexicon,” architect Blair Johnston told me.

Mr Johnston, project director for Warren & Mahoney Architects Ltd, said in his evidence the 3-storey retail development would incorporate the lower levels of both Zurich House & the HSBC Building – on the Quay St side of HSBC, there would be a terrace across the street from the Ferry Building, an immediately more attractive proposition than exists now.

All the parking on the block would go underground, with one access point on Albert St. An elevated publicly accessible “outdoor room” at the corner of Albert & Quay Sts would provide another view across to the ferry basin.

The new commercial tower would have 44,508m² of office space on 28 floors, housing up to 4000 workers, and with a spacious lobby to match a premium grade building.

Sculptor Charlotte Fisher, who submitted in opposition to privatising the square, wasn’t wildly impressed by Mr Johnston’s term for the top of the new tower – “the addition of a distinctive sculptural & highly glazed architectural form on the skyline of the Auckland cbd”.

Architects were given to that sort of talk but, she said: “In no way is it a sculpture, it’s a slab.”

The commissioners return on Friday to hear the remaining submitters, both in opposition, and closing submissions from Precinct.

Links: Proposed plan change 79
Proposed rules
Opening up Lower Queen St for pedestrians
Online review

Earlier stories:
2 November 2015: Tussle over QE2 Square goes to hearing tomorrow
17 June 2015: Downtown space design team appointed as proposed changes notified
26 February 2015: Elation at Downtown rail, tower & square deal
12 February 2015: Propbd on Q Th12Feb15 – 5 apartments sell, plan changes approved, QE2 Square, wharves, Aotea
13 November 2000: Council rejects private quarry zone change

Attribution: Hearing.

Continue Reading