Chancery shops stand empty

[Davo36]

Chancery shops stand empty as economic gloom bites

by Sarah McDonald | Wednesday January 14 2009 - 07:57am
Auckland luxury shopping precinct Chancery is struggling to weather the economic storm, with a swag of retailers closing their doors in recent weeks.
Chancery stores that now stand empty include the spaces previously occupied by Sole Footwear and bag store Mellencamp, as well as womenswear retailer Free Way and Brands of the World, which stocked designer duds from Versace, Prada, Escada and Christian Dior.
High-end men’s clothing store Cube closed in mid-2008.
The parent company of luxury menswear shop Satori was placed into liquidation on December 19, and Chancery café Umbria went under in November.

There are also several empty office spaces, including a large corner site vacated by real estate agents Barfoot & Thompson.
Chancery, a $60 million joint venture development project by Westmark Group and Mission Corporation, opened in late 2000.


Source: http://www.nbr.co.nz/article/chancer...om-bites-39533


It says in the article that B&T have vacated some office space there. Is this their commercial offices on the corner where they have their auctions etc? Will they still have their auctions at that place or somewhere else?

David

[fudosan]

There are few more stores gone but not mentioned in the article, such as Shoe Science and Shochiku restaurant. A serious problem with Chancery Square is that the space in the middle of the square is increasingly taken over by the cafes. Few weeks ago when I was there, I found it difficult to visit the fashion stores as the tables and chairs were too close to the stores. It looks like Chancery is fast becoming a food court.

[Davo36]

Becoming a food court. Lol, that's funny.

Perhaps they'll have a Mackkas, a KFC etc? Now that's classy.

It's a good development but one thing I don't like about it is the stormwater drainage. The cobblestones are sloped so that a small trickle of water runs right through the middle of the place. And given that it rains a lot in Auckland, this is there almost the whole time. Rubbish, dirt and dust get stuck in it and it looks like a sewer running through the middle of the place. Looks like 18th century London.

David

[Assena]

B&T Still in the same building

Hi David

Just reading through this thread and thought I could answer your questions regarding the space B & T have vacated in Chancery. When I started with the leasing team in October we were based on the ground floor (which is the floor referred to in the article). We have since relocated to the third floor to work in with our sales team. Auctions are still taking place on the 4th floor as usual.

Vanessa

[fudosan]

Interestingly, lease of the store occupied by Mellencamp is handled by Chris Jones of Robert Jones Holding, so I assume its their property. I thought they prefer to own only buildings but not units.

The Cube store was empty for months, then used temporarily to sell discounted high fashion clothes before Christmas, and now lying vacant again.

Sochiku reopened after renovation, perhaps by new tenants.

Both Mellencamp and Sole have been consolidated to their Newmarket stores, implying less foot traffic and profits at Chancery Square.

Chancery Street has very little foot traffic, and I have seen several stores changing tenants in the last 6 months. I think a lot of caution should be taken when buying into this street.

The office space at the corner between Beacons Land and Chancery Street has been empty for months, with a lease price of $310 psm for 98 sqm of space.

Satori is still open.

Vanessa,
(I am guessing your identity. If I'm wrong, I apologize and please ignore the following comment.) From your Trademe listings , it appears that you are leasing a retail unit on Wellesley St which is owned by a very experienced investor. Your asking lease price was $338 psm last month but the previous tenant was paying only $317 psm. As retailers are facing a very tough time, I am puzzled to see new rent actually going up for a property that was difficult to sell/lease last year. What's the reason for such optimism? What is that angle that I fail to see?

[Davo36]

Hi David

Just reading through this thread and thought I could answer your questions regarding the space B & T have vacated in Chancery. When I started with the leasing team in October we were based on the ground floor (which is the floor referred to in the article). We have since relocated to the third floor to work in with our sales team. Auctions are still taking place on the 4th floor as usual.

Vanessa

Thanks for the info Vanessa.

David

[Assena]

Hi Fudosan

Yes you are correct in your guessing!

No mystery really, I listed the unit at the rental the Landlord requested. What we list at is usually a starting point in negotiations - most Landlords are prepared to negotiate to some degree depending on their level of motivation for a tenant - whether that be on the rental rate, carparks, rent free periods, fitout etc

If you check again in the next month or so I think you might find that unit has been leased - I was working with a small tenant who tells me he recently secured a lease there.

Hope that helps.

[fudosan]

Thanks Vanessa.

[fudosan]

I visited Chancery Square today and found the stores previously tenanted by Versace, Free Way, Shoe Science, Cube, Mellencamp, Sole, and Umbria are still vacant. Same with the office units in the two separate buildings. In my many walks down the Chancery Street, I noticed it has very little foot traffic. One store is still vacant and I know business owners of several shops on that street have changed.

[fudosan]

Just listed on TradeMe today. Someone is leaving Chancery Square while the lease still has two years to run. The picture shows Mecca but the description indicates more like a fashion boutique store. I'll check it out when I visit Chancery Square again.

Details: http://www.trademe.co.nz/Trade-Me-Pr...-205242483.htm

[Davo36]

Check out the outgoings: Rates are approx $12,000 pa. Body Corp fee is approx $15,000 pa. So $27k up front before any rent that has to be paid. A lot for a little shop.

David

[fudosan]

You are right, David. The outgoings are very high at $169 psm.

The rent is $571 psm, which suggests to me the existing tenant is probably not Mecca. Looking at the rent, the closest I can think of is the premise at 40 Courthouse Lane which used to be occupied by Versace but has been empty for many months. However, there are some inconsistencies between them and I'll have to go and check it out myself next week. Most tenants inside the square pay more than $1,000 psm.

On the other hand, as the water leakage issue has emerged (http://www.propertytalk.com/forum/sh...ad.php?t=19912), it'll be a real challenge to get new tenants. It will be interesting to see how Chancery Square will look like in a year.

[fudosan]

The property is most likely 201 Courthouse Lane. When you enter Chancery Square, the property is above the first store(used to be Sole but now also vacant) on your right. It was occupied by the Free Way fashion store but has been vacant at least since Nov, 2008.

[Davo36]

Update in the Herald today:
Chancery leaks could cost $12m to repair

Auckland's upmarket Chancery precinct has a leaky building problem that could cost up to $12 million to repair.
Alexander and Co, an Auckland building consultant, has prepared documents for the owners showing Chancery needs extensive work. Repairs are expected to start soon.

Link:

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10563396

David

[fudosan]

Each of the 40 property owners may have to shell out $300,000 for the repairs, which will be a huge burden when vacancy is rising.