Parnell’s commercial property renaissance

3:05 PM Friday January 26, 2018 Colliers International

Parnell has long been home to a diverse range of businesses, from designer boutiques to some of the city’s most popular restaurants. Photo / Supplied

Parnell is undergoing a commercial property renaissance on the back of a newly opened train station, a host of trendy new businesses, and the growing popularity of Auckland’s city fringe.

Colliers International broker David Burley, who specialises in commercial property sales in Parnell and neighbouring Newmarket, says investors are attracted to the location’s strong fundamentals.

“Parnell is a well-established suburb with a unique village atmosphere that offers an appealing mix of residential, retail and commercial premises, right on the doorstep of Auckland’s CBD,” he says.

“The area is within walking distance of Auckland Domain, the University of Auckland, and the ASB Tennis Centre, and is well served by regular Link buses.

“Public transport access was improved in March last year with the opening of the first stage of the $18.9 million Parnell train station — the first new stop to be added to the line in 100 years.”

Burley says Parnell’s characterful heritage buildings and high-end modern developments have attracted a number of exciting new tenants over the last year.

“Parnell has long been home to a diverse range of businesses, from designer boutiques to some of the city’s best-loved restaurants, like the Auckland institution that is Non Solo Pizza.

“These businesses have recently been joined by the likes of funky 80s-themed bar Pineapple, hipster-friendly cafe Winona Forever, organic vegan eatery and deli Kaiaroha, and modern Korean restaurant Han, run by former Meredith’s chef Min Baek.”

Burley says the suburb’s retailers enjoy strong advocacy from the Parnell Business Association, which recently expanded its reach beyond the main retail strip on Parnell Rd.

The association now encompasses the growing commercial precincts around The Strand, St Georges Bay Rd and Carlaw Park.

Colliers International Auckland Investment Sales Director Gareth Fraser says Parnell’s growing popularity is part of the wider success story of Auckland’s city fringe.

“As vacancy rates in the CBD remain near record lows, city fringe areas like Ponsonby, Eden Terrace and Newmarket are increasingly attractive to occupiers and investors.

“Parnell’s characterful streets and excellent amenity make it among the most desirable of all the city fringe suburbs.”

Fraser says Parnell’s reinvigoration is reflected in buoyant sales and leasing activity throughout 2017.

“There is tremendous investor confidence in Parnell, as evidenced by the recent $57.3 million sale of the iconic Saatchi & Saatchi building at 125 The Strand,” he says.

“This is the first time the building has changed hands in 22 years, which reflects how tightly-held property in the area is.”

Fraser, who brokered the sale with colleague Simon Felton, says the historic building was constructed in 1911 and converted to office and showroom use in the early 1990s. It was substantially upgraded structurally and cosmetically in 2014.

“Saatchi & Saatchi has anchored the building for many years, but it is also home to other well-known brands and companies including Huckleberry, Ecostore, NZ Rugby, Sabre and Kada,” Fraser says.

The building was sold by interests associated with NBR rich-lister Peter Kraus to a local investor.

General manager Jonathan McElwee is optimistic about the fundamentals of the Parnell area.

“Parnell is undoubtedly going through a renaissance, making it an attractive place to invest,” he says.

“We’d like to acknowledge the Saatchi & Saatchi building’s previous owners in helping to shape the suburb’s success. Their hard work, energy and vision created a landmark property in Parnell.

“We’re thrilled to be able to build upon that legacy and to write a bright new chapter in the building’s history.”

Waitemata Local Board chair Pippa Coom says Parnell offers a good combination of heritage and urban living. “It’s a great destination. Being right by the Domain, there’s this access to great open space and a bush area with tracks, as well as access down to the coast.

“It has a vibrant main street and a really proactive business association that’s done a lot of work to activate Parnell and make it a destination.”

Coom says the Parnell train station is an important step in improving the transport options to the suburb.

The station already connects with Parnell Rd via Cheshire St, while the board is funding a new path to link the station with Nicholls Lane.

Once completed in May, the new path will provide access to the business park and student accommodation at Carlaw Park, and the University of Auckland and AUT University beyond.

“That will make a huge difference,” Coom says. ”It’s really important to get the station working more effectively.”

Other station improvements this year will include ticket machines and platform upgrades.

A second pedestrian crossing, more shelter, and improved access to the Domain are expected to be built as part of the station’s second stage.

Coom says the Waitemata Local Board has also been working with the community and Parnell Business Association to develop a Parnell Precinct Plan, which will go out for consultation this year.

It is also planning to fund upgrades to lower St Georges Bay Rd.

“That’s where the local board can really add value — by improving the urban space and amenities to make it more desirable for increasing foot traffic, and to drive business.”

Burley says new development is also helping to drive Parnell’s growth, with a new retirement village being built by the train station.

There are also plans for a cafe within the heritage station building itself, which once stood in Newmarket until the latter suburb’s train station was substantially redeveloped.

“As more residents move to the area and the train station improves, Parnell will become even more sought after, making it a highly desirable commercial investment location.”