CBD parking has future upside

3:45 PM Friday March 2, 2018 True Commercial

The carpark at 65-71 Federal St occupies a substantial 1641sq m freehold site. Photo / Supplied

The sale of the Federal Street Car Park presents an opportunity to acquire a standalone car parking building in the heart of Auckland’s CBD.

It will be sold by Colliers International, on behalf of SkyCity Entertainment Group, by deadline private treaty closing at 4pm on April 4, unless sold earlier.

A minute’s walk from SkyCity Auckland and two blocks from Queen St, the property comprises a purpose-built, 11,487sq m car parking building with 427 spaces over seven levels.

The building is on a substantial 1641sq m freehold site with Business City Centre zoning, which allows for the highest density of Mixed Use development under the Auckland Unitary Plan.

SkyCity has owned the property since 2004, but new parking facilities in the nearby New Zealand International Convention Centre (NZICC) have made it surplus to requirements.

Colliers’ capital markets director Jason Seymour, who is marketing the property with national director Peter Herdson, says it’s being sold with vacant possession.

“Investors, developers and land bankers will not want to overlook this property’s superb location or the immediate opportunity to redevelop, re-lease or reposition,” Seymour says.

“Located in the heart of Auckland CBD’s growing entertainment precinct — anchored by SkyCity Auckland, a leading entertainment destination — the property is surrounded by numerous restaurants, eateries, theatres, hotels and conference venues.

“It’s exceptionally close to CBD offices, apartments and transport links, as well as near two of Auckland’s most important construction projects — the New Zealand International Convention Centre (NZICC) and City Rail Link’s Aotea station.”

Seymour says the increasing rarity of standalone parking buildings in the CBD makes it a compelling investment. “Construction of these buildings almost completely stopped in the 1990s, despite rapid growth in the number of employees and residents.

“Since then, the Unitary Plan has capped the overall number of new CBD parking spaces and effectively halted the development of new standalone parking buildings.

“Constrained supply and increasing demand have led to significant price inflation, with daily casual parking rates increasing by 164 per cent since 2008.”

Herdson says investors could create substantial value by repositioning the Federal Street Car Park building.

Alternatively, developers and land bankers could draw on a robust holding income while planning to unlock the site’s future potential.

“It’s generous zoning, which allows for much greater density than the existing building, means it could readily be redeveloped for commercial, hotel or residential use in the long term,” Herdson says.

He says the property is strategically located on the corner of Federal and Kingston Sts, allowing access from both Hobson St and Victoria St West. “It’s close to motorway interchanges, public transport hubs, the waterfront, and the growing western CBD.”

Herdson says New Zealand’s ongoing tourism boom, the $703m NZICC and Hobson Street Hotel investment make the property particularly appealing as a future hotel redevelopment site.

“As New Zealand’s main international gateway, Auckland has one of the strongest hotel markets in Asia Pacific. The NZICC will further increase demand for rooms.”

The 32,000sq m centre — five times larger than Auckland’s largest existing convention venue — will be capable of hosting international conventions for 3000 people and one-off events for some 4000 people.

SkyCity’s Group CEO Graeme Stephens says the NZICC is expected to attract around 33,000 international delegates a year to Auckland.

“The NZICC will be a landmark building for Auckland and New Zealand; and is expected to be a significant demand-driver for our Auckland precinct,” he says.

As part of the NZICC development, SkyCity is also constructing a new five-star, 300-room hotel on Hobson St.

Stephens says the hotel will be integrated with the wider SkyCity Auckland precinct, including a pedestrian laneway with retail, food and beverage offerings, which will complement the world-class Federal St dining precinct.

“The Hobson Street Hotel and new retail laneway will provide much needed tourism and hospitality infrastructure for Auckland and will complement the NZICC and broader business community.”

The Federal Street Car Park building has resource consent for 317 long-stay and commuter car parks and 118 short-term visitor spaces. Built in 1983 and expanded in 2000, the building is predominantly of steel and reinforced concrete construction in a split floor layout.