Friday 3rd November 2000
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There is more off- the-water action for Auckland's hottest real estate CAMPBELL MCILROY reports
As local bodies celebrate the $640 million windfall the America's Cup created, property developers have descended on Auckland's Viaduct Basin in a race to finish 45,000sq m of developments in the next year.
A total of 28ha of the hottest development property in Auckland's most sought after non-CBD district is owned by Viaduct Harbour Holdings.
The area has undergone a phenomenal amount of development since the company bought the freehold land from Ports of Auckland in September 1996.
Chief executive Chris Parkinson said a six-month event did not really affect land values and there was sufficient infrastructure so people did not see the viaduct area as a flash in the pan.
Agents have talked ad nauseum of a drift to the area as both listed and private property companies have staked their claim with about 18,500sq m of office, 9500sq m of retail and 17,000sq m of residential space due for completion in the next 12 months alone.
One of the largest developments under way is Prism Properties' building on Beaumont St next to the Fanshawe St offramp for the southern motorway.
Prism, owned by the family trusts of John Coldicutt and Paul Shaw, expects the development to be completed in late November and subject to final resource consents will include up to 6000sq m of office space and 4000sq m of retail with 230 carparks.
Rentals are to be in the $250 to $285 a sq m range for the four-level development.
Magazine publisher Australian Consolidated Press is the likely tenant of the top floor, with its 270 staff moving in to an open plan layout.
Further along Fanshawe St Trans Tasman Properties recently took the last development site in Maritime Sq on top of the 26,0000sq m holding it has over two blocks fronting Fanshawe St between Halsey St and Beaumont St.
Chief operating officer Bruce Catley said the company had been approached by people associated with syndicates in the America's Cup offering up to $250/sq m for what was basically warehouse space for the next two to three years.
By Mr Catley's own admission that is more than the company was making from some of its office towers.
The two-block holding was a mixed bag of leases showing a holding return of 9% on value.
Trans Tasman was working on a master plan for the area which it hoped to have finished early in the new year but it would be two to four years before any development work took place, Mr Catley said.
Multiplex was due to start work on its Maritime Sq site any day with the building due to be completed by August 1 next year.
A number of existing Maritime Sq tenants are understood to be interested in securing expansion space in the building.
Right in front of Trans Tasman's building is Newcrest's development which is due for completion about the same time.
Director Tim Dromgool said the company had a couple of concepts for the site of either a two-to-three-level building with a total of either 1200sq m or 1600sq m.
He said people spent a great deal of time in the office and having an environment like the Viaduct was a real breath of fresh air.
Mr Dromgool would not comment on who would occupy the building but it has been suggested a leading stockbroking firm is interested.
Kiwi Income Property Trust owns two buildings known as C and E in Maritime Sq - building A is on the far left looking at the site from Fanshawe St. Buildings A and B were being sold off on a strata title basis.
Bayleys agent Bruce Whillans negotiated the sale of level one in building B which is let to Viaduct Harbour Holdings, and level three in the same building which is let to Hartford Group.
Mr Whillans also negotiated the sale of Trans Tasman's site for Building D as well as its holdings further along Fanshawe St.
Back on Customs St west next to the Tepid Baths Terry Mikkelsen's Phoenix Properties plans to complete the three-level Viaduct House by March next year.
The building will include two floors of office space of 1155sq m each, and retail at ground level.
The top floor has been let to Totem, a conference and seminar co-ordinator, with two rooms which can accommodate up to 200 and 50 people respectively and six smaller meeting rooms.
The company is understood to have an arrangement with a number of the city's top hotels for the use of its facilities in an area which has a shortage of conference and meeting facilities.
Mr Mikkelsen said the other floor had been spoken for by a professional firm but not signed, but would not elaborate further.
Rentals had ranged between $230 and $240/sq m for the office space and $280/sq m for the ground floor retail, he said.
Further along Customs St west Oceania & Eastern has begun construction on a four-level mixed office and retail development.
Director Cecil Murray said the company would not be taking the project to market until early next year with construction due for completion some time between the middle and end of next year.
Mr Murray said floor plates would average roughly 600sq m each with mixed-use retail on the ground floor and office above.
Symphony Group has already signalled its intentions for a residential development across the road from its AGC office development with building due to start in February or March next with a 12-month construction time.
Managing director Chris Minty said the company had now signed a head lease for its proposed food emporium on the ground floor of the AGC Building.
Old City Markets Management is understood to have sublet between 70% and 80% of the space and is aiming to launch in Anniversary weekend at the end of January.
That leaves 1000sq m vacant on the ground floor and 3700sq m of office space vacant upstairs, which Mr Minty said the company was close to leasing.
Another potential development site on the corner of Fanshawe and Halsey sts is owned by private interests associated with Kiwi Income's Richard Didsbury and Ross Green.
But Mr Didsbury said it was unlikely the site would be developed for another two to five years.
Meanwhile, the mystery over whether the old log farm will be the home to America's Cup bases or a residential development were put to rest by Viaduct Harbour a few months ago.
With the announcement of the new Team New Zealand management structure of the basin Viaduct Harbour has entered direct negotiations with four syndicates for use of the land.
Mr Parkinson would not comment on which syndicates were interested in the sites.
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