Anyone living or working in the Auckland CBD will certainly attest to the chaos that has prevailed through lower Queen Street and surrounding streets over the last four years – closed roads, temporary bus stops, re-directed footpaths and thousands of orange cones! Behind the hoardings hundreds of hi-viz construction workers toil away on one of the largest commercial and public sector projects NZ has seen – redeveloping the waterfront block between Queen Street, Customs Street East, Albert Street and Quay Street – into a mixed use precinct encompassing the tallest office tower in NZ, redevelopment of 1 Queen Street into an office and hotel complex, the development of a multi-level retail and food/beverage/hospitality lane-way and the extension of the city rail link. This $1b development (excluding the City Rail Link investment) is collectively known as Commercial Bay.
Steffi McKeown, from our Auckland team (who just so happens to work and live in the area), gives us an insight into some of the key features of this new “lifestyle” area – past and present.
Working and living around Britomart for the last few years has been a bit of challenge! So I’m genuinely looking forward to when Commercial Bay is finally finished – not only so this part of the city can get back to normal but because of the transformation this project is going to make to this area – particularly now Auckland Transport is also upgrading Quay Street and the waterfront. With the office tower (PwC Tower) nearing completion you’re starting to see how all the bits fit together. And the food and hospitality offering that is part of the retail development will provide a whole new experience. While the project has caused a lot of disruption to the CBD it’s all part of positioning Auckland as a true international city!
There are a number of components to this development so I thought I would provide some key facts to orientate those not familiar with the area and to put the scale of the project in context.
- Where is Commercial Bay: Waterfront block between Queen Street, Customs Street East, Albert Street and Quay Street
- What’s the history of this site:
- Much of the land is reclaimed (like a lot of the northern CBD)
- The name Commercial Bay dates back to the string of bays along the Waitemata shoreline that were used by trading ships and for the exchange of goods
- Until recently the site housed the Downtown Shopping Centre (the first of its type in NZ), open public space, Zurich House (which remains) and 1 Queen Street (currently HSBC) which is being redeveloped
- What are the key elements of the development:
- PwC Tower – office
- Food & Beverage
- Zurich House – office
- 1 Queen Street – office and hotel
- City Rail Link tunnel/line – part of the CRL project
- Developer: Precinct Properties
- Completion: Mid 2020 – mid 2022
How much office space is being created?
The scale of this development is unprecedented. The office building provides a total office footprint of 39,000m2, making it the second largest office building in New Zealand by some.
There will be no surprise therefore that this initiative has generated a flurry of activity in the CDB office market over the last 3-4 years. Several major occupiers have used the opportunity to trade-up their workspace particularly many of the key players in the professional services sector. TwentyTwo is currently assisting one of the anchor tenants, Chapman Tripp, with independent advice on their ITC and AV requirements.
The expected completion later this year has also created a number of back-fill opportunities in buildings being vacated by these tenants. In many cases, landlords are using this window to upgrade and re-position these older buildings for the next cycle. As a result, refurbished options are being presented to the market in locations like Shortland Street and Albert Street which will suit some businesses looking to grow or upgrade their current workplace.
The uptake of space in Commercial Bay and the flow-on effect across other precincts continues the heightened leasing activity across the wider CBD market. There are a number of major occupiers who have either made decisions to relocate/upgrade their workspace or are in the process of determining their future needs including Southern Cross, KiwiBank, Genesis, TradeMe, Westpac, Deloitte, 2 Degrees, Meredith Connell and BNZ to name a few. TwentyTwo is currently acting for Southern Cross, Deloitte and Meredith Connell who are all at varying stages through their process.
In our upcoming research on the Auckland CBD office market Dan Longmire will highlight the indicative office rentals being set by PwC Tower but as will be expected the rentals for the upper floors have set a new net rent benchmark for the market. We will also consider what will be the next premium CBD office tower to compete with Commercial Bay.
- PwC Tower:
- Major tenants: PwC, Chapman Tripp, DLA Piper, Minter Ellison, Marsh
- Zurich House (to be known as Jarden House later in the year):
- Major tenants: Zurich (exiting), Jarden (incoming),Guardians of the Superannuation, Regus
- One Queen Street:
- Office: 8,700m2
- Major tenants: Bell Gully
- InterContinental (244 room hotel)
But wait…there’s more to Commercial Bay than just office space…
The Commercial Bay development is not only about office space, it’s about creating a “lifestyle” precinct that brings together the largest concentration of high-quality retail and food and beverage in the city and a luxury hotel. It will also have exceptional public transport access once the City Rail Link project is complete in 2024.
This package of office, retail and food and beverage in one place is what many business leaders, who are looking to attract and retain top talent, are looking for.
As someone who lives and works within two blocks of Commercial Bay, at the moment I try and avoid the CBD on the weekend as much as possible as I find it pretty uninspiring. I tend to spend most of my time on the fringe of the CBD where I believe the food, beverage and retail options are superior. However, once the new retail centre is open I expect the offering will surpass that in the fringe – I will have no reason to leave the CBD!
- H&M, Calvin Klein, Tommy Hilfiger, Superette, MECCA
- Food & Hospitality:
- Harbour Eats – 700 seat foodcourt
- New York-based restaurant Saxon + Parole (in my opinion the most exciting restaurant– a trip to which should probably warrant ditching the latest fad-diet for)
- The City Rail Link
- Due to be complete in 2024
- Capacity at peak: 54,000 people per hour across the CRL stations