Orphan Auckland CBD sites on the block
Two prime Auckland CBD sites are on the block, both with resource consents for towers that never went ahead.
The site at 28 Shortland St has stayed vacant since the 100-year-old Auckland Star building was torn down in 1989, despite efforts by a series of owners to attract tenants for several tower designs.
It has a resource consent for a 2008 Gordon Moller designed building, believed to have been designed to tempt ANZ. The bank chose to stay in its current headquarters.
The site at 85 Customs St also has a resource consent for a tower, also believed to have been offered to ANZ. However, its marketers point out that that its resource consent, issued in 2010, covers 35,305sq m, which they say is 50% higher than at 28 Shortland St for a smaller cost.
Shortland Star Trust, which owns the 2010sq m site between Fort and Shortland St has confirmed it is seeking $40 million. Marketers for 85 Customs St owner Waikoro Ltd (owned by industrial developer Tim Edney) say the owner is seeking less but declined to name a figure.
Waikoro aggregated a number of sites over time until it owned an entire block from Gore St through to the eastern end of Fort St. Among the buildings on the site are the historic Rose & Crown tavern and Ballantyne House. Waikoro was able to plan a larger tower because it could transfer air rights over the two buildings.
Waikoro had planned to redevelop the whole 2629sq m block (4 lots) between 69-105 Customs St, including retention and refurbishment of the Rose & Crown Tavern; excavation and construction of six basement levels of vehicle access, servicing and parking; construction of a 26-level commercial, retail and office tower; and retention of the existing 12-level Ballantyne House office building.
The owner's marketer sayd the fact that few corporates are looking to move headquarters and, given Fonterra has decided to settle on the waterfront at Wynyard Quarter, there are few opportunities for new commercial or office towers.
Waikoro has chosen to run an offshore marketing programme, due to close on May 22 by tender. It is believed overseas interests may see the site as suitable for a hotel.
The 28 Shortland St site is also for sale by tender closing June 6, according to Shortland Star Trust general manager Sean Park.
“We think the market is buoyant at the moment and we are planning other developments around town, so we always have an option if there is a purchaser out there. We think there are buyers.
"It’s a prime site and the agent couldn’t give us a direct comparison with any other site so we are putting it on the market to see what happens.”
The Shortland St site was originally owned by NZ News, which was bought by Brierley Investments. The Auckland Star building was demolished in 1989 and new owner Trans Tasman Properties obtained resource consents for two different towers without finding a corporate tenant.
Trans Tasman put it on the block in the mid 2000s and up to six developers are believed to have bid for it. However, an industry source said the successful offer fell though, which allowed Dae Ju Engineering to put in its bid of $13.75 million.
Three years later in 2008 Dae Ju sold the vacant site to South Korean New Zealand resident Gil Soon (Christie) Hwang’s interests for what is believed to have been $28 million. Ms Hwang is a commercial investor and residential property developer who spends time in South Korea, where she owns an important golf course, and Auckland.
The vacant site has been run as an outdoor carpark for many years, gaining the reputation of being the most dilapidated but most expensive CBD carpark in Auckland. Late last year the owners had the site leveled and modernised the carpark, replacing attendants with carpark machines.
Interestingly, Barfoot & Thompson marketer Greg Clarke says 28 Shortland St may find a buyer willing to spec-build (going ahead without signing up corporate tenants).
He argues that responsible businesses and banks want to be located in buildings of good size “and maybe the cost of things is secondary almost to the importance of the their people”.
“And certainly that’s the line the government has taken on the earthquake strengthening requirement. They don’t care what it will cost to build because human life is paramount.”