An interesting little development that has some implications for the CRL. Stuff Reports:
AMP NZ Office is spending $90 million buying a downtown Auckland shopping centre from Westfield which it believes is the ”best site in town” for future development.
The NZX-listed company, which owns more than $1 billion of grade A office space in Auckland and Wellington, has reached an agreement to buy the Westfield Downtown Shopping Centre on Auckland’s waterfront.
Currently a four level, 14,000 square metre shopping centre, the site, approximately 6500 square metres, has an existing resource consent for a 71,000 square metre mixed-use office and retail development.
Chief executive Scott Pritchard said the site would not likely be developed for years but gave the company ample opportunity.
”This site… [gives] us the ability to acquire something that has long term development potential but provides us with a holding return,” Pritchard said.
”We get to choose when is the most optimal time to develop it which in the land of developing buildings, time is often the one thing that can hurt you.”
If the Auckland Council is able to proceed with its plans to build a rail loop it will need to use the site to develop it, and Pritchard said that factor was likely to determine future development plans.
“We support Auckland Council’s call in the city centre masterplan for this precinct to showcase Auckland, and we are keen for this site, along with our adjacent buildings, to contribute to that vision.”
There was currently ”no demand” for a new office tower in downtown Auckland but the company had options for future development.”We don’t think there will be for some time because a lot of the major occupiers in the market have got reasonably long term leases so this is very much a long term opportunity for us and ensure that when demand is there we have what we think is probably the best site in town to try to meet that demand.”
In the short term, the company had the opportunity to improve links with other buildings it owned adjoining Westfield, PwC Tower, Zurich House and AMP Centre.
I think this is great news. The downtown mall has always felt at odds with Westfield’s typical way of doing business which tends to be inwards focused suburban malls that all feel the same and that are surrounded by oceans of car parking. They like to treat pedestrians and any other transport mode like aliens from another planet with some kind of deadly disease. A classic example of which is in Henderson where pedestrians coming from the train station and bus station across the road face the ass end of the mall with a priority given to a loading zone and a disgusting walk around the edge of the car park.
Back to the downtown mall, it is pretty easy to see why AMP think it is the best site in the city. It is close to the waterfront and is easily big enough to put two large towers on. It is also has probably the best transport links in the city being across the road from both the ferry terminal and Britomart. Further they even know that they can get the council to pay for demolition of the existing buildings which will need to happen for CRL. I suspect a large part of their decision to buy this site is also that they believe in the impacts the CRL will have which will see a lot more people be able to get into town without having to drive. It will be really interesting to see what plans they eventually come up with but I for one am really happy with this news.
Adendum: A couple of views of the unlovely thing from the recently refurbished tower on the southeastern corner of the site showing the scale of the footprint [PR]:
Downtown from above; looking west.
QEII Square and Downtown; a failed public space.
CRL through Downtown
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I’m a bit disappointed if the crl, which I support, would mean the demolition of the shopping centre. The shopping centre has been there for many years and provides a range of shops, foodcourts immediately across from britomart. It’s one of my first stops when I come in to town on the train on Saturdays. I would have have thought it’s the kind of building we’d want to retain. Here’s a case where change of ownership will likely mean a ceasation of the business in favour of an office block. Sure they’ll be some shops, but not a dedicated buildung and if it doesn’t work out for AMP we can bet they’ll get their pound of flesh out of the council and ratepayers.
The retail can be rebuilt if there is demand. The building is a horrible beast and for that reason I can’t wait for it to be demolished.
The building is appalling but its shops are well used and profitable yet there is no car parking on site.
Jeff those shops can relocate for the duration of the build and we will end up with both an exponentially better transport system and a better downtown. It’s a nasty bit of 70s trash that will be no loss. The ‘plaza’ that faces back towards Britomart has always been an unpleasant wind blasted and therefore underused place so I look forward with a great deal of interest to see what AMP are thinking.
But the really great news is that they obviously get how much more valuable property on the rail network will be as patronage grows with the CRL so with the big players in property as well as the Employers and Manufacturers Association behind it that just leaves the MoT and the National Party as the only boneheads unable to work it out…..
AMP would have rocks in their head if they didn’t include large scale retail at the ground floor(s). There is absolutely no reason why there can’t be a huge mall on the lower levels with a tower or two above. I just hope they consider the exterior too and put in some good edge retail, but I’m sure they would to maximise their rents.
I would expect that they would attempt a retail interface with the CRL. The large throughput of passengers would make it an attractive proposition.
I think it’s good to see companies like AMP supporting the CRL. Hopefully it will help convince National of the project’s benefits.
After 2014 it won’t matter what National think.
Working toward that result myself.
I guess if AMP hold to their statement that they “…support Auckland Council’s call in the city centre masterplan for this precinct to showcase Auckland…” then all good, as long as it’s positive for Auckland. We’ve all got memories of how we have been served by property developers at times. The EMA’s in support of this? Great. 2014, roll on.
That’s good. One of the wish list items from the CCMP is to open up a lane east-west between Britomart and Albert st, effectively putting in a new street between Customs and Quay.
If AMP develop a large tower to the south and a smaller one to the north that would fit perfectly with the concept.
Well this is interesting. So far AMP and the University have publicly made land purchasing / capital development decisions based in part on amenity to good public transport and both sites are on/near existing parts of rail that will form the CRL.
That’s two major organisations that have put their money in and are lining up to reap the benefits of the CRL that the current Government tells us don’t exist…
What will be interesting is whether they do a renovation soon expecting to have it in its current form for the next 8+ years or whether they just let if fall apart in hope the CRL gets built.
In the redevelopment, i am sure they will put the shops back in. They will do their best to get direct access from Britomart so that it becomes a main exit point for people coming to the city to shop. Add in easy access to the new tower above, plus their other three in the area, that is a huge catchment for a food court (especially when it rains. Add in a gym, plus outdoor area on the non tower part of the site and it could be a real attractive area
They’d be mad to spend anything much on it now, it’s going, and it made Westfield a 5mil profit last year.
Alternatively they could proceed with a major redevelopment anytime by building the tunnels along with the new project, the engineering design work is already underway, the route is clear.
I think this blog post is unnecessarily harsh towards Westfield. They are one of the world’s largest owners of shopping centres and they know more about retail than just about anyone. They bought their portfolio of NZ centres about 13 years ago, and Albany’s the only one they developed from scratch – the inward-facing mall thing mainly reflects what they inherited, and these days they do try to have some shops facing outside. I do agree with the “sameness” of the malls. The oceans of carparking reflects NZ’s preponderance on cars. Westfield know their customers and in NZ, almost all of them are drivers. In other countries they have created plenty of industry-leading malls which have much higher use of public transport.
I would suggest that in general shopping centres can actually be a very effective land use, since:
1) They tend to have higher sales per square metre of retail space than other retail formats;
2) If they build upwards i.e. multi-storey, again you’re getting more use out of that land. This would be the case in (usually larger) CBDs overseas, and CBD retail performs very well, even in NZ.
The Downtown shopping centre has zero shopper carparks (literally) and is therefore at the pinnacle of PT-friendly shopping in New Zealand. However, it’s actually not very successful – it’s quite run down and doesn’t trade well. Most of the value is actually the land, and the centre will probably be demolished whatever happens. If the CRL happens, the site will be rebuilt on, probably as a multi-level retail and office type thing; if the CRL doesn’t happen, same again but with a lot more floors of offices since the foundations can go deeper.
I think AMP are right that it is a primo site – and Westfield knew this too – and that the future’s bright once we (hopefully) get confirmation on the CRL, and get some certainty over what can be built there. Something pretty good, hopefully.
Oh and I meant to add 3) Their popularity, i.e. several million shopper trips per year, would hopefully mean that they can be efficiently served by PT (even if very few people do use PT to visit shopping centres in New Zealand)
This is nothing but good for the CRL:
From the Herald: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10836316
Although still a chance for Cameron Brewer to make a further twat of himself:
“Mr Pritchard said: “With excellent access to public transport and positioned by Auckland’s waterfront, this property has to be one of New Zealand’s best long-term investment opportunities. It has enormous potential for future development as both an attractive public amenity and a great working environment.”
http://www.propbd.co.nz/afa.asp?idWebPage=8338&idBobDeyProperty_Articles=18371&SID=828259148