If you’ve been keeping up with the news or if you’ve been following our Development Tracker, you’ll know that there’s a lot of new office development activity starting to happen in Auckland’s city centre. And a significant amount of it right on the CRL route:
- 151 Victoria Street West, with 17,600 square metres (sqm) due for completion later this year.
- There’s 40,000 sqm of office space going up at the southern end of Wynyard Quarter in the VXV park. This is across three buildings, Fonterra, Datacom and VXV Three, due for completion in 2016 and 2017.
- Also, there’s 125 Queen St which is currently being refurbished. That’s 15,000 sqm of space coming back into circulation after being vacant for some years.
- The Downtown Shopping Centre redevelopment – this will add 35,000 sqm of office space for completion in early 2019. It will get underway next year, when the City Rail Link works begin.
- 1 Mills Lane is being developed by Mansons and will have enough space for 4,000 workers.
- Precinct Properties is developing 48,000 sqm of office space across five buildings in Wynyard quarter. The first stage of 12,000 sqm gets underway shortly.
- Mansons are also developing 10 Sale Street, with 10,000 sqm of space.
All up, the projects currently under construction will provide space for more than 5,000 workers. The proposed projects would accommodate at least another 10,000. This excludes developments which currently seem to be off the boil but could come to life at any time, such as Shortland Star and the Britomart Central building.
This is during a time when CBD vacancy levels are at record lows, and the city centre simply doesn’t have the office space it needs to grow employment.
So, assuming these buildings are completed more or less on schedule, and the number of jobs grows to fill the new space available – all of which seems a reasonable bet, in the current climate – these would be significant increases in employment. Nationally significant, even. By comparison, New Zealand has increased employment by just 93,000 people in the last four years. Currently, the Auckland city centre has around 90,000 employees (in the Auckland Central West/ East and Auckland Harbourside area units), or 100,000 if a slightly wider definition is used (adding in Grafton East and Newton).
This sounds like a “good news” story, and for the most part it is. However, the reason we’re so interested in employment numbers on TransportBlog is that the government has said it will only support an early start on the City Rail Link (CRL) if Auckland is on track to meeting two targets – one based on train patronage, and one based on city centre employment.
We’ve written extensively on these targets in the past. We don’t think the employment target is a valid way of deciding when the CRL should start, for a number of reasons. It propagates the myth that the project is all about the city centre, which it’s not. It’s also a target that has little to do with the effectiveness of the CRL. Plus, there’s the “chicken and egg” situation where the CRL is actually the project needed to dramatically improve city centre accessibility, allowing much more employment (and other) growth there.
When John Key announced the government targets for early support of the CRL, he said that city centre employment would have to increase by 25 percent. As it happened, the target was so poorly defined that the Ministry of Transport had to go away and decide exactly how it would be measured. As I’ve argued in the past, the definition they eventually decided on was rather unfair, requiring 24,000 employees to be added to the CBD between 2012 and 2020. The linked post suggests that a start date of 2006 is “more consistent with the reference to the [City Centre Future Access Study] in National’s targets”.
So, as the government currently defines the target, do these new developments put us on track to achieve growth of 25% by 2020? No. Even if all these developments go ahead – and the Precinct Properties work at Wynyard is likely to take longer to be completed – we would still be a long way off achieving the target by 2020. However if we define the target in the way that I’ve argued is more consistent, we are on track. We’ve already had growth of around 13,000 employees since 2006, and with the developments that are currently under construction or proposed, we have a very good chance of reaching the remaining 11,000 by 2020.
This would be a really good time for the Ministry of Transport to take a hard look at their targets, and reassess whether they are defining them in the most sensible way. The good thing about the target being so vague is that they’ve left themselves a lot of wriggle room to reinterpret it from the current hardline position. This would be easier politically than scrapping it altogether. If they do what I’ve suggested, it won’t be long before the Prime Minister is able to come out and say, “With strong growth in train patronage, and city centre employee numbers set to grow substantially, the CRL has met our targets for early financial support, and we will be will be full financial partners to the Auckland Council on this”. Now that would be a good news story.