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Tesla lease anchors big K Road redevelopment

Tags: Auckland Auckland CBD Commercial

A big block of land at the western end Karangahape Road will undergo further rejuvenation following international electric car maker Tesla's decision to establish its New Zealand head office plus a retail store and service centre on the site.

Tesla will lease 2019 sq m of space at 502 Karangahape Road and on Hereford Street. Lloyd Budd, Bayleys’ director – commercial, retail & operations, who negotiated the lease, says it will be an anchor tenant of a commercial and residential precinct branded Ponsonby Ridge being developed by Tarewa Group It encompasses almost an entire block around Telecom’s former head office building, which is being converted to luxury apartments, with frontages to Hopetoun and Howe Streets as well as Karangahape Road and Hereford Street.

“Tesla’s retail store will have substantial frontage onto Karangahape Road with high exposure to large volumes of passing vehicles,” says Tarewa development director Dave Mahoney. “It will be located in the former M.J.Bennett Building which was built in the early 20th century and will be retained, refurbished and extensively upgraded for their occupation later this year.”  

A service centre, accessed off Hereford Street, will be located behind the store while a character brick office building at 2 Hereford Street, will incorporate a lounge where Tesla customers can wait while their vehicle is being serviced and in future can be used whilst charging. 

Mahoney says work is nearing completion on the redevelopment of the 20-level ex Telecom building at  8 Hereford Street, the upper 14 levels of  which are being converted into 119 apartments, with the first residents scheduled to move in the second quarter of this year.

“Development has now commenced on the commercial part of the project which will offer a mixture of retail, office and retail space along Karangahape Road and on Howe Street as well as around the residential apartments,” he says.  “We have concluded, or are in the final stages of negotiating, a number of other large commercial leases, in addition to the Tesla lease. These tenants include a co-working serviced office provider, a child care centre and a gymnasium.”

The first four floor levels of the ex-Telecom building have been retained as car parking with capacity for over 500 vehicles. Around 200 of these car parks have been allocated to apartment owners while the balance will be available for commercial tenants as well as providing some public carparking, Mahoney says.

Bayleys Real Estate has been appointed sole agents for the leasing of the balance of the remaining retail and office space. Budd says smaller retailers and food and beverage tenants are being sought for the balance of the space adjoining the Tesla tenancy on Karangahape Road, offering character facades enhanced by a high stud and exposed brick walls.

Some of this space will also back onto Mahon Way, which runs through the middle of the site and was pedestrianised in the late 1990s. This will provide an opportunity for hospitality tenants, in particular, to connect with both this laneway and Karangahape Road, says Budd.

Office space on Levels 5 and 6 of the ex-Telecom building is being retained for existing tenants, the largest of which is telecommunications company Visionstream.  Construction is about to start on additional two levels of office space on top of the carpark podium totaling approximately 1700 sq m. A swimming pool and tennis court connected to the apartment building will be built on top of this structure. 

“This office space will overlook Auckland Girls Grammar school and will provide tenants with stunning harbour, Harbour Bridge and CBD views,” says Bayleys’ office leasing agent Matt Gordon.

A further 1600 sq m of commercial space also over two levels, adjoining the carparking levels will be constructed at ground level on the corner of Hopetoun and Hereford Streets. Gordon says this will be particularly suited to businesses wanting exposure to the high traffic volumes travelling along Hopetoun St which connects Ponsonby Road with the northern entrance to the CBD.

Budd says Ponsonby Ridge is in a pivotal location close to the intersection of Karangahape and Ponsonby Roads, two of Auckland’s most popular hospitality and retail streets. 

“Ponsonby Ridge is part of the continuing rejuvenation of K Road. The whole of the street is scheduled for a major revamp in 2018. Suggested improvements by Auckland Council include adding a separate cycle way, peak hour bus lanes, improved landscaping, upgrading the existing street furniture and creating more opportunities for outdoor dining and street activities.”

The completion of the City Rail Link in 2023 will also result in a new station being opened on Mercury Lane, just off Karangahape Rd.

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