This is the last “development update” post for the year, so I want to look back on some of the big news from the year (and things which weren’t ‘news’ in the media sense but which I think are important). Christchurch gets special attention, because of the massive changes that have had to happen down there.
This was the year that Christchurch started to get on top of its post-earthquake shortage. Consents peaked at around the start of 2015 on an annualised basis, and have started to decrease slightly. The housing situation is starting to return to normal. Rents went up hugely after the quakes, and that has eased off; it’s a similar story with house prices. People’s lives are still being disrupted by the rebuild, and there are ongoing insurance battles and the like, but most people (not all) are now living in repaired homes.
It’s going to be a much bigger challenge for Auckland to get its housing shortage under control, but I’m sure we all knew that. Auckland building consents have kept increasing, albeit more slowly than anyone would have liked. Much of the gain has come from “attached” dwellings, not detached houses.
Other parts of NZ haven’t had quite the same growth pressures, and have seen a much smaller rise in construction.
We’ve given particular attention to apartments and terraces in Auckland. There have been about 1,000 completed this year, and the Development Tracker is showing 5,325 under construction (up from 3,177 at the start of the year), and 2,255 in the pre-sales stage (up from 1,566 at the start of the year). Things ramp up in 2016 – I’m expecting more than 3,000 units to be complete next year, and even more in the years to come.
After a long wait, some of the biggest projects in the city began this year. In the “Retail Precinct” identified in the CBD blueprint, those projects include The Crossing, The Terrace, BNZ Centre (aka Cashel Square), and the ANZ Centre. These are major developments; this will be the densest part of the CBD, with the most foot traffic. They’ll be finished in the next 1-2 years, so by December 2017, it should be possible to walk around downtown Christchurch in much more buzzing surrounds.
In the “Innovation Precinct”, a number of buildings are underway, including new headquarters for Vodafone (South Island HQ) and Kathmandu. Most of these will be complete in the first half of 2016.
These are all positive things, and will bring people back to the Christchurch CBD – workers, shoppers, hopefully to be joined by tourists and residents.
However, the Cathedral itself, and most of the sites surrounding the square, remains painfully barren. Many other parts of the CBD are still home to empty, damaged buildings, or gravel carparks. It will take years more to sort this all out.
Some of the “anchor projects” the government announced have been stalled or delayed. The bus interchange is complete, the justice precinct well underway, and funding has been agreed for the sports facility – but the convention centre is still up in the air, the performing arts precinct lagging, the stadium looking unlikely, the Breathe Urban Village now on hold. No doubt we’ll hear more on these next year, and perhaps some plans will have to change.
The NorthWest Shopping Centre opened in October, the first new mall in Auckland for eight years. The Herald called it a “monster mall”, which seemed a little overblown – it’s either the 9th or 10th largest enclosed shopping mall in Auckland, not counting ‘bulk retail’ centres. Taken as a whole, though, the Westgate area is indeed a retail monster – it’ll be roughly the size of Albany when it’s done.
Much of the retail action, though, was on main streets and in town centres, rather than in shopping malls. Farmers reopened on Queen St. Topshop opened for the first time.
Here’s an interesting stat I read a few months ago – according to Whillans Realty, rents at the lower end of Queen St went up 30% in six months. These increases, in what was already the most expensive retail precinct in New Zealand, really show the value of foot traffic (and tourism too).
As we heard earlier this year, there’s a real shortage of high-end office space in Auckland. 151 Victoria Street West (occupied by NZME and various other media businesses) was the only major building completed in 2015, but more are on the way: Fonterra and Bayleys buildings in Wynyard Quarter, which should be ready in the next few months, a refurbished and reoccupied 125 Queen St not long after that, and so on. 1 Mills Lane, on the site of the old Herald headquarters, was also one of the big announcements this year: an office tower, billed as Auckland’s highest, with a hotel and shops too.
Downtown redevelopment, aka Commercial Bay
Lastly, what better way to finish than with the announcement last week that the Downtown Shopping Centre redevelopment will be going ahead – the area will be branded as Commercial Bay, with the new building to be known as the PwC Tower.
Precinct Properties New Zealand Limited (Precinct) (NZX: PCT) announced today that it will proceed with a $681 million development including a new 39 level commercial office tower and a world class retail centre at its Downtown Shopping Centre site on Auckland’s waterfront.
A construction contract for the development has been entered into with Fletcher Construction. Reflecting Precinct’s development agreement with Auckland Council, construction will also include works to complete tunnels under Commercial Bay for the City Rail Link.
Commercial Bay will integrate the adjoining Precinct owned towers’ PwC Tower, AMP Centre, HSBC House and Zurich House, to create a new central business, entertainment and retail destination. On completion, Precinct estimate 10,000 workers will occupy space within these five towers, each of which will have direct access to the retail centre.
The decision to proceed had been taken as the tower had achieved 52% pre-commitment, with Precinct delighted to welcome another four businesses as foundation clients. The retail leasing has recently commenced and negotiations are advancing with a range of mini major retailers for the flagship stores.
Work is expected to begin with the demolition of the existing Downtown Shopping Centre in June 2016. The Commercial Bay retail centre is expected to open by October 2018, with the office tower completed in mid-2019.