Multimillionaire businessman and retailer Rod Duke of Briscoes fame is building a new Auckland mansion on a $12 million waterfront site.

Duke has bought two adjoining clifftop sites - and a big seaside boatshed - with panoramic views where he is gutting an existing house.

He will leave Remuera and move into one of Herne Bay's best streets, Sarsfield St, near Ben Cook's place, which set last year's top national house sale record of $24m.

Last August, Duke paid $12m to the Webster family for the north-facing site where builders are now almost completely demolishing an existing house.

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"It's just going to be a family residence. It's going to be ready about August next year. I'm taking out external and internal walls and the roof and leaving the piles and floors. Everything else will change," he said.

The boatshed will become a major entertainment venue, one person close to the changes said, while the basement floor of the new house will be dubbed the "TAB", a gaming, sports and entertainment zone.

Duke bought the property via real estate agent Graham Wall and said he had engaged Julian Guthrie of Godward Guthrie Architecture to undertake all the work.

Guthrie's design snared this year's top sale price so far, a Burwood Cres property which sold for $18m earlier this year.

Duke's Briscoe Group has a market capitalisation or worth of $720m. It issued shares to the public in 2001, is listed on the NZX and the RA Duke Trust is the group's majority shareholder.

Brands include Briscoes Homeware, Rebel Sport and Living & Giving.

Duke said Precision Construction has been engaged as the main building contractor.

Quotable Value recorded the $12m sale late last year.

That property has a large 1995 beige stucco two-level house on it with matching fence but partial demolition is under way on the 1563sq m site.

Charles Webster, an heir to the estate that sold it, said it was in his family for about a century.

"It's probably the nicest place to live in the whole wide world. You can just walk into the city. It's on the waterfront with a magnificent boatshed on Sentinel Road Beach."

Next to Duke, a enormous new multi-million-dollar Cape Cod-style mansion, able to accommodate a small fleet of vehicles, is being planned for the "Circus McGurkus" site.

Businessman Graeme Murphy said he paid $4m for that Sarsfield St site on Sentinel Rd corner, where a run-down abandoned house with a turret stood until most of it was demolished a few days ago.

That house was nicknamed "Circus McGurkus" for its unusual, eye-catching style and drew publicity when it was abandoned then inhabited by squatters for some years and services were cut, all in New Zealand's most expensive suburb and that area's best street.

Rod Duke will build his new house next door to the old 'Circus 'McGurkus'. Picture / Anne Gibson
Rod Duke will build his new house next door to the old 'Circus 'McGurkus'. Picture / Anne Gibson

Murphy described his extensive plans, once the site is cleared.

"It's going to be Cape Cod, really big. It's about 650sq m, four levels, 12-car garaging with a lap pool and a spa pool off the end of it."

David Delamare of Delamare Architects was commissioned to design the mansion, where Murphy will live with his family.

Location was a deciding factor, he said of the section overlooking the waterfront.

"I'm on the Milford beach but most of the directorships are in the city and my boat's in the Viaduct. It's a nightmare," Murphy said of travelling from the Shore to the CBD.

Resource consents are being lodged and Murphy has engaged specialist planner Nick Roberts of Barker and Associates who he said was extremely experienced.

Earthworks for the mansion will begin in the next month, Murphy said, describing a concrete residence.

"It's going to be pre-cast with suspended floors."

As for the original house, Murphy acknowledged neighbourhood curiosity.

"It's the end of an era," Murphy said of the demolition of the terracotta stucco-clad building.

"It could tell some stories, that house!"

And already, his investment has paid off.

"I paid $4mbut I've already been offered $7m," he said.

Last year, Murphy said the new house would be built towards the end of this year but delays mean it won't rise that fast.

"It took a long time because I'm a commercial developer and I have about $30m worth of work on."

City's second $2m suburb

Auckland has gained its second $2 million suburb after St Mary's Bay joined neighbour Herne Bay in the exclusive club.

The value of properties in the waterfront suburb has just ticked over to $2,035,900 according to data from qv.co.nz - a rise of 28 per cent in the past three months.

James Wilson from QV said it was only a matter of time before the established suburb reached $2m.

"The suburb is characterised by high quality, substantially sized character dwellings; when coupled with its proximity to the CBD the area has been sought after for many years," Wilson said.

Sixty-nine of Auckland's 167 suburbs had an average value of more than $1m after the addition of Hillcrest, Mount Albert, One Tree Hill, Flat Bush and Golflands.

Values in South Auckland were rising quickly as the area "played catch-up" with the more central suburbs and investor activity was strong.