CBD News & Trends

[fudosan]

Two towers take shape at $1b Britomart centre

The East building is the largest new structure being developed at the $1 billion Britomart precinct in Auckland.

Hawkins Construction, owned by McConnell family interests, is putting up the block where work had this week reached level six.

The East building will be 13 levels when it is finished.

The block is rising at the intersection of Britomart Place and Galway St, behind the old Wharf Police Station which held its official opening last night.

That former station, refurbished and restored by Phillimore Properties, has been leased to bar Brew On Quay.

The East building is 85 per cent pre-leased to Westpac and Ernst & Young but developer Cooper & Company is searching for more tenants.

Construction is not expected to finish for another two years. Bank staff have moved into the Charter Customs Building which was opened in March.

85% already pre-leased? That's very good during this recession time. There will be a lot of people working in the Britomart precinct and should be good for retail business.

Source: http://www.nzherald.co.nz/commercial...ectid=10574682

[markw1]

Tower center at 45 queen street owned by AMP has about 6 floors for lease or coming up. Did some study up their for uni and they hadn't leased an empty floor in 8 months.

[fudosan]

Tower center at 45 queen street owned by AMP has about 6 floors for lease or coming up. Did some study up their for uni and they hadn't leased an empty floor in 8 months.

That's incredible!

[fudosan]

Queen St upgrade wins award and bring more pedestrians

Auckland City Council's upgrade of Queen Street has won a prestigious New Zealand Architecture Award for urban design from the New Zealand Institute of Architects.
...
More than 50,000 people use the street every day and are enjoying the benefits of the great design, which includes wider footpaths, safer pedestrian crossings, new art works, high-quality street furniture and new planting. Additionally, as a result of the upgrade, Queen Street has seen a 30 per cent increase in pedestrians. This has led to a subsequent increase in revenue for retailers.
...
The Queen Street upgrade is part of Auckland City Council's ambitious $100 million, 10-year programme to transform the central city's streets and open spaces. Other streets that have already been successfully upgraded as part of the programme include Lorne Street, Vulcan Lane and Quay Street. The redevelopment of Aotea Square and St Patricks Square is currently under way.
...
The council has recently announced that it's investigating the innovative urban design concept of shared space for a number of the remaining streets and open spaces that are to be upgraded within the CBD.

Shared spaces have been successfully implemented overseas and remove the traditional distinction between the footpath and the road, to provide equal priority to pedestrians and vehicles. Shared space helps to reduce traffic, supports business and retail activity, and allows streets to be used for more diverse activity.

This approach is being considered for Fort, Elliott, Darby and Lorne streets. The plans will go before the Transport Committee in June. Pending that meeting, draft designs will be released for public consultation later this year.

Increased foot traffic and corresponding increase in retail business are all good news for retail property investment in the Queen Street Valley Precinct.

Source: http://www.aucklandcity.govt.nz/news...905/31/a01.asp

[Davo36]

Dymocks closure is in the Herald: Link

Sounds more like they are going to liquidate the operation than shift it now, but the article is a little unclear.

[Davo36]

Akl CBD Vacant Space

I was watching the Weekend Business program on channel 7 on Freeview yesterday (Saturday) and they were saying how vacancy levels for office space in the Akl CBD has reached 7.5%. But the real kicker is that they also estimate that another 7.5% is unoccupied with the tenant's having departed but still paying the lease. So when these tenancies come to an end there'll be a big jump in vacany levels to 15%. So I thought that was quite interesting.

And then a friend came over today and was saying his firm moved into their headquarters offices last year to save on the rental of the Mt Eden offices. Both the headquarters and satellite office had shed some staff so could now fit into the single head office. But he said they hadn't saved any money because they simply haven't been able to assign or sublease their Mt Eden space and so have had to pay the rent on that space for a whole year. So they incurred the moving costs and saved nothing in rent. So an interesting anecdote that seems consistent with what the property consultants were saying on tv. And now his business is laying off staff...

I think there might be quite a few businesses in this kind of predicament. High overheads-but nothing they can do about them.

I wouldn't want to own inner city office space right now unless you really knew what you were doing.

David

[Keys]

I wouldn't want to own inner city office space right now unless you really knew what you were doing.

David

There's a thread here started by someone who (I believe) owns a bit of inner city space. I made the suggestion that that person may be finding things a little tough (amongst other things). The response was a threat and the post which contained the threat was removed, together with my reply.

Time will tell, as it usually does.

[Davo36]

Yes, I imagine there's a few landlords out there who just can't lease their space no matter what they offer.

I forgot to mention that in the business programme on the weekend, they were saying that some landlords were offering trips to overseas locations and some even offering to pay 2 or 3 times the normal commission for a leasing deal.

[Davo36]

Office space for 6000 lies empty in Auckland

Saw this in the herald this morning:

Office space for 6000 lies empty in Auckland

4:00AM Monday Jun 08, 2009
By Anne Gibson

Auckland has enough empty office space for more than 6000 people and undeveloped commercial land values have halved since 2007, the latest six-monthly update on Auckland's commercial property market shows.
Zoltan Moricz, research director at consultants CB Richard Ellis in the PWC Tower on Quay St, said landlords were having to offer sweeteners to office tenants.
He said the city's empty office space was enough to accommodate about 6600 workers.
And the scenario for developers holding empty commercial development sites was even more dire.

Rest of article: Link

[Keys]

........., said landlords were having to offer sweeteners to office tenants.

-//-

And the scenario for developers holding empty commercial development sites was even more dire.

I wonder. How many of those developers/landlords have high Fixed Term Loans?

[fudosan]

Lower Queen Street

From the print version of NZ Herald dated May 30, 2009

While vacancies were observed on Queen St, these were few and mostly to areas where pedestrian traffic is lower. There was only one vacant unit observed in the sought after lower Queen St precinct, stretching north from Victoria St towards the waterfront.
...
Key money is no longer a requirement to gain premises in lower Queen St, for example, and instead incentives are now being offered in some instances for retailers to take space.

It's turning, though slowly.

[fudosan]

According to the same article, there are 420,000 sqm of prime CBD office and 810,000 sqm of secondary CBD office, giving a total of 1,210,000 sqm of office space in CBD. If vacancy is 103,000, the office vacancy rate is only 8.5%. It's not dire yet. According to the recent issue of National magazine from Colliers, the vacancy rate in 1994 was 30-35% (page2). Now that sort of figure will be dire.

Take a look at my monthly survey CBD Retail & Office Supply. Despite increasing office vacancy, the number of office units on the market is still small, so I think the crunch time has not arrived yet. Maybe the market is still buffered by the extremely low interest rate.

[fudosan]

arty central, with a $100m hangover

Prime Minister John Key yesterday said the Government would help with the purchase of the wharf, leaving the council to develop a cruise ship terminal and public spaces on the 474m-long structure at the bottom of Queen St.
...
Auckland City Mayor John Banks said he was excited at the prospect of securing Queens Wharf, but it would cost more than $100 million to strengthen the 100-year-old structure and develop it into a cruise ship terminal and public open spaces.

The council had set aside $10 million for Queens Wharf and would have to borrow the rest.
...
It is understood the Government will contribute $20 million towards buying the wharf, on top of its $190 million contribution towards the $240 million Eden Park upgrade.

Good idea to revitalize the waterfront, but -- where is the money? We probably end up leasing the space to use as cruise terminal during the Rugby World Cup. It will still be that old unattractive wharf.


Source: http://www.nzherald.co.nz/politics/n...ectid=10577993

[fudosan]

"Shared space" street concept put into action

It may transform the retail scene in lower Queen Street area, turning it into a giant outdoor shopping arcade, IMHO.

Urban designers have won approval in principle from the city council's transport committee for developing a suite of streets into "shared space" where pedestrians will be free to roam as long as they do not unduly hold up motor traffic.

Footpaths will be removed, as will parking spaces and most street signs, leaving the onus on drivers to act on visual cues and clues to nose their way carefully past pedestrians.

Four thoroughfares centred on Elliott, Fort, O'Connell and Lorne Sts are being proposed for trial treatment in time for the 2011 Rugby World Cup, although the public will be consulted before the council decides whether to approve designs on a case-by-case basis and expand the concept.

Source: http://www.nzherald.co.nz/nz/news/ar...ectid=10578461

[Davo36]

Vero takes 2 less floors:

http://www.stuff.co.nz/business/mark...ntre-occupancy

KPI are putting a positive spin on it, but this just mean a bit more vacant space for them.