Big movers shake things up in CBD
The relocation of Fonterra from its former Princes St head office (above) to a new headquarters in the Wynyard Quarter is one of the corporate moves freeing up space in the Auckland CBD.
For the first time in years, Auckland central business district office space is becoming available to medium to large-sized companies.
Colliers International says that as major office towers are planned, some corporations are moving to city-fringe offices, while others are rationalising space requirements.
This has resulted in more opportunity for businesses to enter the CBD.
Matt Lamb, director in Colliers’ Auckland office leasing team, says that following years of virtually zero vacancy in prime-grade CBD offices, several major companies are on the move, shifting to bigger and better premises.
“It’s an exciting time for Auckland’s CBD office market,” says Lamb.
“A combination of a new office tower being pre-leased plus office space opening in locations such as Victoria St West and Wynyard Quarter — along with some companies focusing on the utilisation of space in order to reduce their overall footprint — is finally resulting in vacancy opening up.”
“For the first time in two to three years, we’re able to offer medium to large businesses real future options in the CBD.”
Another director in Colliers’ Auckland office leasing team, Sam Gallaugher, says major corporate relocations have created movement and ‘churn’ — easing pressure in the core CBD office market.
“Our research shows stock coming, or recently added to the market — to help alleviate CBD supply constraints over the next three years — totals close to 110,000sqm,” says Gallaugher. “This includes Precinct Properties’ 39,000sqm new PWC Tower at Commercial Bay; the repositioning of 125 Queen St (17,000sqm); Mansons’ new 12,000sqm build on Sale St; Goodman’s buildings at VXV and Precinct’s development at Wynyard Quarter.
“PWC, Chapman Tripp and First NZ Capital are moving to PWC Tower at Commercial Bay and leaving space behind them.
“Others, such as Fonterra, Mayne Wetherell, Meredith Connell and Maersk have moved away from the core CBD into bigger floor plates within the inner city fringe. This has resulted in more space being freed-up within the core CBD,” says Gallaugher.
“Now we can have conversations with tenants about core CBD space becoming available; that’s exciting following almost two years of near zero availability of prime space in there.”
Gallaugher says the trend of businesses becoming smarter with property strategies and making more efficient use of office space, is freeing up additional vacancy.
Russell McVeagh and Vero are examples of companies that have undertaken such workspace rationalisation.
“Businesses moving out of the core CBD in search of bigger and more efficient floor plates have resulted in a much bigger and busier year in 2015 than our team anticipated,” says Lamb.
“Numbers last year paint a picture of businesses growing and moving up in the world. In 2015 our team completed 107 office leasing deals – equating to over two businesses moving premises every week of the year in Auckland. Our Auckland CBD and city fringe team leased 120,000sqm of office space in 2015 – the equivalent of 12 rugby fields of floor area.”
Key deals included: 6500sqm leased to Meredith Connell, Pernod Ricard and Maersk in Mansons’ NZME Building, 151 Victoria St; 1050sqm to Mayne Wetherell, in Goodman’s VXV 3, on the corner of Halsey and Gaunt Streets and Vodafone’s commitment to take an 18,000sqm building at Smales Farm, Takapuna.
“However, in the first five months of this year, the team has already transacted more than 40 deals over a wide geographical,” says Lamb. “So based on deals in the pipeline, we expect this year will exceed what was a record year in 2015.”
Matt Lamb (left) and Sam Gallaugher (right), of Colliers International