Dairy firm backs move as critic questions need for ‘glossy’ city-centre site.

Global dairy giant Fonterra is moving into what could be the smartest new building in Auckland, but as farmers slash costs the move has been criticised as unjustifiable.

The interior floors of Fonterra's new landmark block gleam cool blues, bright greens and crisp teals with a series of vertical neon tubes igniting its architectural prowess.

The Jasmax-designed glittering corporate headquarters is a bold statement about the dairy giant's presence in the city but Fonterra shareholder and Waikato University agribusiness professor Jacqueline Rowarth is unimpressed.

"This just continues the disconnection between head office and the shareholders," Rowarth said of the new block. "Many have already asked, 'Why Auckland?' Fonterra doesn't have to rent prime real estate there at all," she said.

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"Fonterra shareholders would rather their company was in the news because of the great job it was doing for them and New Zealand's economy than because they're renting a glossy new building in Auckland.

"A professional front is one thing, but when all shareholders are being urged to cut costs, renting prime real estate is not seen as justifiable."

Maury Leyland says it will use space more efficiently.
Maury Leyland says it will use space more efficiently.

Maury Leyland, Fonterra's people, culture and safety managing director, said there was a clear rationale for the move. "The new building brings together staff from our Princes St and two Shortland St CBD office locations, as well as non-manufacturing staff from our Tip Top and Takanini manufacturing sites," Leyland said.

"Because we are using an activity-based working approach, rather than a traditional desk-based system, we can fit more people into a smaller space and use the space more efficiently," she said.

"This is bringing our average occupancy rate down to one person to 8sq m, when the New Zealand norm in a traditional desk-based system is one person to 12sq m," he said.

"This means the total occupancy cost of the move is more cost effective than leasing at multiple locations on a traditional fixed-desk occupancy basis, which we are currently doing." She said the low per square metre cost meant savings in the long run.

The move will be complete by March 31 and leasing ensures Fonterra doesn't have to fund a new build or put money into capital costs.

"The Princes St site lease expires [in] July, with no renewal rights. Sustainability features are reducing operational costs, with annual energy savings of up to $256,000."

Fonterra has more than $7.5 billion of debt, has reported a revenue decline and farmers face the prospect of two or possibly three years in a row of negative returns.

Back on the Fanshawe St/Halsey St corner, blue, teal and green are the colours of Fonterra' oval-shaped logo so the lighting reflects that. The colourful tubes also reinforce the sharp, strong angles on the building.

The $93.2 million block is a bold statement and a far cry from the more sedate existing headquarters.

Service ducts have been left exposed in a design inspired by the road frontage face of Fonterra's Te Rapa dairy factory, adding a somewhat industrial look to the building.

The seven-level, 16,000sq m block is clad in curtain walls of glass opposite Victoria Park in the Wynyard Quarter area near the waterfront, not far from Westhaven.

Jacqueline Rowarth is unimpressed with Fonterra's new home.
Jacqueline Rowarth is unimpressed with Fonterra's new home.

The building is owned jointly by a Singaporean government investment fund and the NZX-listed Goodman Property Trust.

John Dakin, Goodman (NZ) chief executive, described the block as "an outstanding property that represents the very best in current building design and function. Leased to a high quality customer on a long-term lease, it's a landmark office facility that is expected to deliver strong investment performance in one of Auckland's most progressive locations."

A Herald commercial feature published in 2014 told of the level of luxury Fonterra staff will enjoy.

"The firm's 1000-plus employees and visitors to the building will approach the entrance via a landscaped parkland northern plaza featuring manicured lawns and gardens that are irrigated by rainwater channelled from the building.

"Only after it has been filtered and purified through the gardens in a bioremediation process will the water enter the stormwater system," the advertising feature said.

"In addition to 'low-flow technology' employed within the building's water services, the rainwater runoff from the building will also be used to reduce water consumption in areas like the toilets."

Head office

• More than 1000 staff now moving in.
• 100 cycle parks in basement and 189 carparks.
• Rainwater to be recycled within building
• Fonterra has taken a 15-year lease, doesn't own block.
• 5-Star green rating, prime-quality office.

Sources: Goodman Property Trust presentation, Herald commercial feature.