Auckland’s big bold plan
Total Property Issue 6 2016
Auckland Unitary Plan has significant implications for the commercial property sector, writes John Church, Bayleys’ national director commercial.
He says the plan is a game changer that will enable Auckland to accommodate its inevitable growth provided it is effectively implemented.
Gone are the many different zones in the eight disparate plans of Auckland’s former regional and local authorities. They have been replaced by a much tighter set of zones, overlays and precincts. A grand total of close to 100 residential zones have been condensed to just six while over 40 business zones have been reduced to a more manageable 10.
However, not all commercial property owners were happy with the commercial zonings their premises were given under the proposed plan. Action groups were formed to oppose what was seen as a “down zoning” of their properties to Light Industry from existing, more flexible business zonings to protect what they argued was Auckland Council’s overly restrictive, predominantly centres-based zoning strategy.
Some were successful like the Barrys Point Road owners and others such as a Wairau Valley collective were disappointed. However, the latter can take heart from the fact that their property values haven’t fallen. Recent auctions by Bayleys North Shore office saw two Wairau Valley investment offerings selling at yields of 4.6 percent and 4.7 percent.
The plan’s aim was to provide a more integrated and coherent strategy for management of the region’s resources. With valuable input from the Independent Hearings Panel, headed by Judge David Kirkpatrick, it appears to have largely achieved that.
The plan’s “up and out” approach focuses on managing future growth through increased density, particularly in areas well-serviced by public transport, and through new communities on the urban fringe – a sensible combination of greenfields development and brownfields redevelopment.
The Rural Urban Boundary will be retained but expanded as the city grows along with flexibility to move the boundary through private plan changes as needs arises.
The plan opens up big opportunities for developers and add-value investors to profit from greater intensification. The more experienced and canny market players have already snapped up offerings with favourable zonings like Mixed Use or Terrace Housing and Apartment Building.
Others have taken a punt on strategic land holdings that may be developed at some future stage. These purchasers have been active since the proposed plan was first released back in 2013 and have contributed to a significant increase in land values.
This will make it more difficult for the less experienced and well-funded to make a go of it under the new plan. Well-established, financially secure, proven developers are more likely to have the most success navigating their way through the changes ahead. This, in combination with the plan’s good design provisions, should mean a better quality of development which will benefit the city long-term.
Auckland Council now needs to undertake an urgent review of its consent and regulatory processes, and resourcing, to remove the bureaucratic bottlenecks and associated costs that currently threaten the plan’s effective implementation.
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