Ponsonby Central-style development and new offices reshaping suburb
A wave of urban renewal is transforming the Auckland city fringe suburb of Morningside as zoning changes attract more mixed-use development to the area.
Colliers International Investment Sales Associate Director Jonathan Lynch, who specialises in city fringe property, says the heart of the suburb has historically been occupied by small-scale light industrial and service retail users.
But that is quickly changing after the Auckland Unitary Plan rezoned much of the land as Business Mixed Use, opening up the area for a mix of retail, residential and office redevelopment.
Lynch says a number of exciting new developments in Morningside are already underway or soon to be announced.
“One of the most transformational new developments will be a benchmark new hospitality complex akin to Ponsonby Central that will set the trend around change of use in the area.
“The development at 14-18 McDonald Street will nod to the area’s industrial roots while providing a contemporary office and retail space where people can gather to dine, drink, shop or work.
“While full details are still to be announced, the developers have a long-established track record of successful urban renewal and redevelopment, which gives me great confidence that they will be able to deliver on their ambitious plans.
“I have little doubt the development will reshape the character of the suburb and provide a blueprint for Morningside’s growth into the future.”
Lynch says significant redevelopment is already taking place nearby, with Rod Duke’s NZX-listed Briscoe Group developing a new corporate headquarters and Rebel Sport store at 1-5 Taylors Road.
Due for completion in mid to late 2019, the development will comprise a large-format retail space on the ground floor with modern, well-appointed offices above.
Lynch says the company also plans to redevelop its nearby site at 36 Taylors Road, replacing the old Briscoes outlet store with a new, modern full-format store.
“Briscoe Group’s significant development in the area shows how desirable this location is becoming. It really is a show of confidence in the area for an NZX-listed company to relocate its corporate headquarters within Morningside.
“With CBD office vacancy rates at record lows and unprecedented demand for quality city fringe and suburban offices, it’s likely more companies will look to relocate to Morningside in the coming decade.
“The area is superbly located for renewal given its city fringe location, generous zoning, proximity to key arterial routes, and excellent accessibility to regular bus and train services.
“These attributes make the suburb ideal for many types of redevelopment. Showroom retailers, cafes, offices and medium to high-density residential developments will become more and more common.”
Lynch says the changing face of the suburb is exemplified by Crave cafe, which was first established almost a decade ago.
“Crave was a trailblazer in bringing the Morningside community together and reinvigorating an area of mostly older light industrial properties,” he says.
“The cafe was established by a collective of locals who wanted to create a shared space where neighbours could meet and get to know each other.
“Over its first two years, Crave expanded from a small 20-seat cafe into a full venue with a stage, sound system and upstairs bar and meeting area.
“In late 2016, the cafe finished renovating a ‘grimy old tyre warehouse’ across the road into the funky new space where it is now located, at the corner of Morningside Drive and McDonald Street.”
Lynch says improvements to rail services have also contributed to the area’s renewal.
“Electrification of the Western Line has enabled more efficient, comfortable and reliable commuter trains to regularly service the Morningside Train Station.
“The upcoming completion of the City Rail Link will greatly improve capacity on the network and allow Morningside residents to access two more stations in the heart of the CBD.”
Lynch says Morningside’s gentrification has led to an increase in land and building sales rates.
“The difference between light industrial and mixed use properties is typically within the realm of $500-$1000 per square metre,” he says.
“The more competitive sales results achieved recently have been largely driven by owner-occupiers who see a fit for their business, or add-value investors with an eye to future conversion or rental rate rises.”
Lynch says rental rates over the last 12 to 18 months have become competitive.
“We’re seeing a lot of pressure in the immediate area,” he says.
“The Ponsonby Central-style development at 14-18 McDonald Street is starting to set a trend for higher rents for smaller tenancies.
“This trend is likely to continue as more redevelopment reshapes the area – and we’re already starting to see that take place.”