Grand central stations

Grand central stations

Auckland Office Workplace – February 2020

Auckland’s office sector in prime location

An unprecedented boom in new infrastructure is set to reshape the commercial leasing market in Auckland’s central city. Some $29 billion of transformative projects are underway or planned across the city, of which the $4.4 billion City Rail Link (CRL) is by far the biggest, according to new analysis from Bayleys Research.

The CRL is the largest infrastructure project ever undertaken in New Zealand. On completion in 2024 it will transform Britomart from a dead-end station to a through station, opening onto a new 3.4 kilometre underground rail link connecting with the existing network at a redeveloped Mount Eden Station.

By more than doubling rail capacity, and doubling the number of Aucklanders living within a 30-minute commute of the CBD, it will deliver a step-change in CBD-based employers’ access to workers.

As a result, it is expected to further boost development and demand for office space and stimulate new patterns of leasing activity across the city centre – particularly around new growth nodes centred on CRL stations.

Two new underground stations are being created: Aotea Station at Wellesley and Victoria streets; and a station at Karangahape Road, with entrances on Mercury Lane and Beresford Square.

Together with redeveloped Britomart and Mount Eden stations, these locations are attracting development activity that will turn them into vibrant mixed-use hubs.

Delivery body City Rail Link Limited (CRLL) estimates total development potential of 200,000 square metres at the new stations – including 63,000 square metres of commercial development, along with new apartments, retail developments and hotels.

The largest project is Precinct Properties’ $1 billion-plus commercial, retail and hotel development at Commercial Bay. Located beside Auckland’s main transport hub at Britomart, it has close access to train, bus and ferry terminals.

At its heart, the 39-storey, 39,000-square metre PwC office tower is nearing completion. The tower’s efficient floorplate of about 1,350 square metres with a side core and minimal columns, will make it well-suited for a range of working styles including agile and flexible working – with the added attraction of sitting amid 18,000 square metres of new retail and hospitality amenity.

Major commercial tenants will include PwC, whose staff will move from the existing 29-storey PwC Tower on the corner of Albert and Quay streets, along with law firms Chapman Tripp, DLA Piper and MinterEllisonRuddWatts.

Precinct estimates 10,000 office workers will occupy space in this and adjoining buildings it owns, including the existing PwC Tower, the AMP Centre, Zurich House and HSBC House.

WORK STATIONS

Meanwhile, the Aotea Station site has around 5,000 square metres of developable land owned by Auckland Council, with land resource consent secured for a 41,000-square metre office tower above the main station entrance on the corner of Wellesley Street and Mayoral Drive.

CRLL envisages office accommodation for 3,000 people, including a second commercial tower just to the south.

While commercial property concepts are as yet less well-defined for the other stations, CRLL says that post-CRL construction, land acquired at Mount Eden Station will provide potential for more than 100,000 square metres of mostly residential, but also commercial investment.

This includes housing for 2,300 residents within the station area. There is another 16,000 square metres of identified development potential on adjacent land owned by CRLL.

Karangahape Station will have an over-station development, on a site which contains about 2,600 square metres of developable land owned by CRLL.

Bayleys Real Estate’s Auckland commercial and industrial director, Lloyd Budd, says the CRL will add fuel to the already rapid transformation of the central city commercial leasing market.

“While the CBD office market has seen massive change in recent years, the CRL’s capacity to deliver workers en masse to previously underserved CBD locations will further transform leasing activity across the central city and present new opportunities for tenants.

“Development of new office space is already well-advanced towards the downtown and Wynyard Quarter areas, continuing a gradual northward and westward drift of CBD activity in recent years,” says Budd.

“The CRL will promote new patterns, with tenant attention extending to new growth nodes around stations further uptown, and potentially along Albert Street, as its importance grows as a commercial office spine supported by public space improvements, as well as Newmarket and Eden Terrace.”

Budd believes older, B and C-grade stock in midtown and uptown areas will also attract a second look as savvy landlords upgrade their offering to reflect tenant demand.

“Though some has been vacated and repurposed for residential accommodation, rising demand from commercial tenants is likely to see the delivery of significant amounts of upgraded and new office space.”

Launching consultation on a major refresh of Auckland’s City Centre Masterplan late last year, planning committee chair Chris Darby acknowledged the need to respond to rapid growth and evolving patterns of development.

“The city centre is changing dramatically. Right now, there is $16 billion of private and public investment underway which will accelerate the transformation of our city centre,” he said.


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