The Warehouse Group is selling a huge 1.4 hectare freehold property in the heart of Newmarket and seeking a development partner for a major redevelopment project that promises to transform the suburb's retail centre.
Concept plans for 66-80 Broadway and 11-15 Railway Street in Newmarket envisage the development of 18,245sq m of retail space with The Warehouse, Warehouse Stationery and Noel Leeming already committing to nearly 8000sq m of the space.
In addition, the project will create a new 1858sq m 40-room hotel, 9165sq m of office space, a 17,925sq m 160-unit apartment complex and 720 carparks.
The total gross floor area for the finished redevelopment will be 47,914sq m.
"The Warehouse Group is the vendor of this site and will be a committed long term tenant on it," says Peter Herdson, capital markets national director for Colliers International who, with colleague and fellow director John Green, is exclusively marketing the property by international expressions of interest closing at 4pm on May 12 at the offices of Colliers International at 151 Queen Street, Auckland, unless it sells earlier by negotiation.
Herdson says this is the first time the combined site in six titles has been brought to market and Auckland Council has granted resource consent for a significant mixed-use development on the property.
"This site has a superb position on Broadway - one of Auckland's busiest and most popular shopping destinations.
"Due to the size and mixed-use nature of the development, The Warehouse Group is looking for a compatible partner to move forward with this project that will be a salient commercial property feature of Newmarket."
He says the site could be vacant from February 2017 and long term leases are proposed for The Warehouse, Noel Leeming and Warehouse Stationery upon completion of the redevelopment. The Warehouse will sign for 12 years for about 5400sq m while Noel Leeming and Warehouse Stationery will sign nine year leases for areas of 1610sq m and 900sq m respectively.
Fiona Shilton, general manager of property for The Warehouse, says the group has acquired the big site over a number of years as part of its strategy to secure long-term location footprint in the area.
"Given the site's location, in the nation's fashion capital and in one of Auckland's most tightly-held retail areas, this could be New Zealand's premier mixed-use development opportunity for the year," Shilton says.
"Mixed-use is a very new approach to development in New Zealand and we're looking for additional expertise to support us in our endeavour to provide a quality space that will enance living, working and playing for the community."
Herdson says the property has street frontage to both Railway Ave and the highly sought-after Broadway retail strip which carries over 40,000 vehicles a day.
"The property comprises 8330sq m of retail space across two buildings and 2100sq m of office space as well as car parking. It is home to some of The Warehouse Group's brands as well as significant national retailers like The Baby Factory.
"Retailers are expected to include a supermarket and will also be supported by both guests and immediate residents within the complex and nearby residential catchments, as well as those in neighbouring Parnell, Remuera, Grafton, Epsom and Mt Eden which are among the most affluent suburbs in the country."
The building currently at 66 Broadway was constructed around 1992 and is accessed from both Broadway and Leek Street. The main level is below the Broadway street level and is occupied by The Warehouse and two small food outlets.
The main building at 80 Broadway was constructed around 1993 and a two level parking structure adjoining to the south was constructed about two years later. This building has two levels with the upper level occupied by Bedpost, Noel Leeming and one food outlet, all of which have frontages to Broadway. The lower level is occupied by Warehouse Stationery, The Baby Factory, Waitemata Beds and a beauty therapy salon.
A two storey building at 11-15 Railway Street was built around 1984 and is occupied by Woosh Wireless on a monthly tenancy.
Under the consented development, the commercial and residential components have been designed so that each may be constructed independently enabling construction in two stages.
Commercial activities will occupy the building on the western part of the site and three levels of basement parking are proposed below. The ground level on Broadway will comprise one of three retail levels with shops along the street frontage and within the building fronting a covered street or arcade which will contain kiosks and street furniture.
The Warehouse will be located on Level 1, together with additional shops while another retail level will be located above that on the northern side of the arcade. To the south of the arcade, three levels of offices are planned above the retail levels.
Two levels occupied by a hotel are envisaged above the retail levels on the northern side of the arcade which will not be fully enclosed by a roof to enable natural light and ventilation.
At ground level, the Broadway frontage will consists of four metre high shop-fronts and, above that, a glazed curtain wall system.
The uppermost level of the office will be set back about five metres from Broadway while the hotel block will be stepped back about eight metres from the northern boundary of the site to allow for better views, light and air.
The residential component of the redevelopment will see the construction of two towers and a private landscaped courtyard above a three level parking structure. The northern tower will consists of six levels of apartments, totalling 74 residences above a parking podium with the top two levels set back from Railway Street where a landscape strip will be established.
A seven level southern tower will contain 86 apartments.
At ground level on the Railway St and Leek St corner, a retail tenancy is proposed and along the Railway Street frontage a commercial tenancy will be incorporated.
The property is currently zoned Mixed Use under the Auckland City District Plan Isthmus Section and under the future Proposed Auckland Unitary Plan [PAUP].
The purpose of the Mixed Use zone is to allow the development of urban areas with a diverse mix of activities including residences, offices, retail outlets, entertainment facilities, educational and community services, restaurants and cafes.
It is proposed that the site be zoned Mixed Use under the PAUP but any Council decision on this will not affect the existing resource consent.
Green says Auckland Council is promoting work, living and entertainment areas close to each other in order to help reduce Auckland city traffic.
"Good public transport is an integral part of this policy goal and Newmarket is home to the busiest section of rail track in Auckland, with 368 trains carrying 21,800 people over the crossing every week day," he says. "Located only two and a half kilometres from the Auckland CBD, Newmarket also has regular bus services."
Green says Newmarket is already a well-established business centre with Newmarket Business Association figures showing over 15,000 employees working in the suburb, as well as double-digit percentage resident population growth year-on-year.
"Colliers' 2015 Metropolitan Office Report measured zero office vacancy in A-grade office space in Newmarket which reflects the strong demand for a major new development like this.
"Among the well-known national and international brands that have selected Newmarket as the base for their flagship stores are fashion retailers Witchery, Country Road, French Connection, Stolen Girlfriend's Club and Adidas. Large Australian brands that have their sole New Zealand stores in the precinct, include Alannah Hill, Gorman and Nicola Waite.
"Many large corporates also have their headquarters in Newmarket, including 2degrees, Vector, Watercare, Fidelity Life, Scentre Group, Griffins, Roche, Tegel NZ and Arnott's." Green says there are over 1900 business locations in Newmarket - with a mix of professional, retail as well as financial and insurance-based companies.
"Another significant development for the area is the construction of the University of Auckland's Newmarket campus on the 5.2ha former Lion Brewery site. The university's redevelopment of the site over the next decade will be a significant catalyst to the further enhancement of Newmarket."
The marketing of the Newmarket site follows Colliers International's successful sale and leaseback of several other properties around the country owned by The Warehouse in recent years.
The NZX-listed company and New Zealand's largest listed retail group, The Warehouse Group comprises 92 The Warehouse stores, 72 Noel Leeming shops, 66 Warehouse Stationery outlets and 10 Torpedo7 stores across the country along with several online businesses.
The group has a market capitalisation of around $970 million and a recently-released group sales result of $1.560 billion for the first half of 2016.