A for sale sign has gone up on Auckland CBD’s newest and most sophisticated high-rise tower as international interest shows no sign of waning in premium New Zealand investments.
Owner, developer, builder and investor Brookfield Multiplex has decided to sell the premium 26,000 sq m, 23-level tower at 80 Queen Street as part of the company’s corporate direction of recycling capital when maximum value has been achieved through the development process.
Bookfield Multiplex New Zealand managing director, property Peter Wall says the market is throwing up some excellent new investment opportunities and with post credit crunch equity and debt being both scarce and expensive, the sale of 80 Queen Street will release capital to pursue these opportunities.
Colliers International is marketing the tower internationally and a sale will complete the agency’s decade-long involvement with the property, from its inception to completion.
Deloitte Centre, as the tower will be known when it is completed in 2010, is being built on the city’s only island site bounded by Queen, Shortland and Fort Streets and Jean Batten Place.
Professional services company Deloitte and the Bank of New Zealand have leased the tower’s office floors. BNZ will occupy 11,793 sq m over the podium floors as its head office on a 15 year lease and Deloitte has signed a 12 year lease over the 10 tower levels of 10,729 sq m. At street level, BNZ will anchor the Queen and Shortland corner, while four international premium brands will occupy the rest of the 1090 sq m retail space.
Colliers’ international sales director John Goddard, who is travelling to Europe, the Middle East and Asia visiting qualified property groups possibly interested in buying the tower, says it is the best high-rise commercial office building that has come on the market for many years and probably will be for the forseeable future. “Not only is it fully leased to outstanding tenants, but the BNZ and Deloitte have agreed to three per cent rent rises annually, guaranteeing excellent growth.”
Colliers International’s commercial leasing and retail brokers secured the tenancies in record time and the tower was fully leased two years ahead of its completion. “Tenants were particularly attracted to Brookfield Multiplex’s integrated property model, which effectively provides a one stop shop for development, construction, property management and end ownership,” says regional director Tim Pope.
The development has not been all plain sailing and it has had its share of ups and downs. The BNZ bought the Jean Batten Departmental Building and 80 Queen Street sites in the 1990s for a new head office. In 2003, the bank entered into a joint venture with Multiplex.
Heritage issues over the Jean Batten building surfaced shortly after. Intense negotiations with the Auckland City Council and Historic Places Trust resulted in Multiplex, BNZ, the council and Historic Places Trust agreeing to a covenant that is registered on the title in perpetuity.
The tower design evolved over two years and is a combination of both new and old construction, preserving substantially the heritage features of the Jean Batten Building. Retaining the heritage parts of the building involves the existing doorways and windows and salvaging some of the foyer materials and returning them to their place.
Typical floor plans incorporate a central core containing the lifts, toilets and stairwell. Stud heights vary throughout the building from 2.7 metres in the podium levels to integrate the new structure within the existing Jean Batten Building levels, up to 3.6 metres on level seven and 2.9 metres for levels eight to 18. Wall says the upper floors stud height is considered exceptional, being some 200mm than most other premium grade buildings in the city.
High standard finishes will be used in the main entrance to the building on Queen Street, which will incorporate an impressive 12 metre void with a bridge over the lobby. A café, similar to other in the city’s other premium buildings, will also be included for use by building tenants and surrounding businesses.
After partial demolition of the Jean Batten Building and excavation of the rest of the site was started in 2006, Canadian and New York listed giant Brookfield Asset Management bought Multiplex for A$4.2 billion.
Brookfield Asset Management is a global asset manager focused on property, power and other infrastructure assets. The company has about US$95 billion of assets under management, 10,000 employees, 50 asset locations across five continents and in its real estate division is responsible for about 11 million square metres in commercial buildings worth US$40 billion.
Multiplex was founded in Perth in 1962 and grew to become a global construction, property development and funds management company. It had become a major investor in the New Zealand property market during the past decade.
Multiplex delisted from the Australian Stock Exchange last December and was rebranded as Brookfield Multiplex.
Wall says Brookfield Asset Management has endorsed and promoted the roll out of the Multiplex integrated property model of development, construction, facilities management and funds and asset management.
This approach was responsible for the tower becoming the first high-rise building in New Zealand to be awarded a five star green rating for its design by the New Zealand Green Building Council.
Colliers International corporate sales broker Jason Seymour says an innovative ventilated double skin façade has been designed to reduce energy consumption and is coupled with the latest mechanical systems, computer controlled smart lighting and destination lift technology.
“The building sets a new Auckland benchmark for premium grade contemporary office space,” says Seymour.
Situated at the centre of the law, insurance and head office hub of Auckland’s CBD, the tower will anchor the junction of the city’s two foremost commercial avenues.
”The immediate area contains the majority of Auckland’s major office towers – the Vero and Lumley Centres, AXA Tower, Tower Centre and IAG House. In recent years, there has been a dramatic northerly drift, with tenants preferring offices toward the harbour, its views and the surrounding amenities, such as Britomart transport terminal, Downtown Shopping Centre and Queen Street retail.”
Goddard says its location on an entire city block, the outstanding design and specification of the building together with the strength of the tenants and their leases will ensure the sale has global attraction.
“Demand for core CBD office space has never been stronger, fuelled by lower vacancy rates, the expansion of many businesses, the belief in the CBD’s revitalisation and public transport growth.”
Wall says it took tenacity and vision from the BNZ and Brookfield Multiplex teams working on the tower to convince others within their companies the project was worth pursuing. “We have come out at the other end with a tremendous result – a building that shouts above the rest in terms of design, location, environmental sustainability and the property fully leased before it’s completed.”
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