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Precinct Properties update

Precinct Properties have just released their annual results, and there are some interesting updates on the Downtown Shopping Centre and other projects.

Downtown Shopping Centre

According to Precinct, they’ve completed the master plan for the development, although this hasn’t been publicly released as far as I’m aware. They say:

The completion of the Downtown Shopping Centre masterplan was a milestone for the project and the company alike… Precinct now has a more comprehensive understanding of this unrivalled opportunity and has been able to better ascertain the scale, scope and overall cost of realising its potential.
As a result it has also revised its expectation for development spend estimates to between $400 and $500 million, reflecting a scheme that will maximise the opportunities offered by the site. This revised guidance compares with $300 to $350 million provided last year and comes after increasing the potential area to be developed.

That’s an encouraging sign, and Precinct now think they’ll end up with around 20,000 square metres of retail NLA (net leasable area), and 35,000 square metres of office NLA. The total gross floor area of the building will be around 71,000 square metres.

Additionally, Precinct’s negotiations with the council to enable CRL tunnels through the site are “significantly advanced”. They go on to say that “while a final agreement has not yet been signed, both parties are committed in principle to a solution whereby construction of the tunnels for Auckland Council will occur as part of the Downtown Shopping Centre redevelopment”.

As for the next steps:

Following masterplanning Precinct has entered the concept design phase. A select group of leading global architects was invited to submit proposals for this phase. Following a series of workshops and presentations NH Architecture from Melbourne was appointed as the retail architect and Woods Bagot based out of San Francisco was appointed as the commercial architect. Local New Zealand architecture firm Warren and Mahoney will ensure the integration of these schemes.

In their actual annual results presentation, which is a bit bullet pointy, they add:

  • Intention to restore Downtown and lower Queen Street as the heart of Auckland City
  • Leverage public transport as the site is bordered by rail, ferry and bus services
  • Precinct will have 5 office towers with around 12,000 workers amongst 130,000sqm of office space
  • Retail will knit the precinct together and provide;
    • Amenity for office users
    • Major city centre retail for Auckland
    • Access for public transport

In regards to the “5 office towers” bit, note that Precinct also owns  Zurich House and HSBC House, essentially the entire block that the Downtown Shopping Centre sits on, except for the council-owned Queen Elizabeth II Square. Across the road, they also own the AMP Centre and the PwC building. No doubt this will allow for some more wide-ranging master planning.

Precinct landholdings

Source: Precinct Properties 2013 annual results
Precinct have also given an indicative timeframe for the development. They aim to lodge their resource consent in December this year, and from then on it’s:

  • Project commitment Q4 2015
  • Commencement Q1 2016
  • Retail completion Q4 2018
  • Office completion Q2 2019

Wynyard Central

Precinct also talked a bit about their involvement in the Wynyard Quarter, although we’ve covered most of this previously.

In the period Precinct entered into a development agreement with Waterfront Auckland. This provides the opportunity to develop the commercial office property within Wynyard Central at Wynyard Quarter in Auckland. The 46,000 sqm of gross floor area is expected to be built over 5 stages and several years.
Precinct is making good progress on the design and commercials for the first stage of Wynyard Central. This site provides Precinct with the last remaining commercial waterfront development site and complements the Downtown Shopping Centre opportunity.

They do mention, though, that the first stage will involve around $50 million of spending, with the project getting underway in the second quarter of 2015 and wrapping up in the third quarter of 2016.

Wynyard Quarter - Precinct impression 1

CEO Interview

Lastly, Anne Gibson, the Property Editor at the Herald, recently did a video interview with the CEO of Precinct Properties, Scott Pritchard. Here are a couple of interesting quotes from the interview:

“We think that the way Auckland is going… there’s a significant growth in the number of CBD-based employees… we’ve seen vacancy levels reduce quite radically”

“Getting density into cities is what makes cities so great”

“We’ve seen 10,000 new workers come into Auckland’s CBD in the last three years, which is an enormous amount of people, that need desks. And so… the vacant space of a few years ago has truly been absorbed, and I think if it continues, we’re going to be short on space”

These are a lot of the things we discuss on the blog, and it’s great to hear them coming from the CEO of a major property company.

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