Empty offices on Auckland's High St. Photo / Michael Craig
Empty offices on Auckland's High St. Photo / Michael Craig
New tower blocks are still rising in Auckland's CBD, despite the empty floors in many existing buildings.
A new survey found the ex-Chorus House on Wyndham St 59 per cent empty, the former Lumley Centre on Shortland St 30 per cent empty and the ANZ Centre on Albert St 22per cent empty.
The latest office vacancy study by real estate consultancy JLL identified the city's emptiest blocks.
Gavin Read, head of research for JLL in Auckland, said these three towers were the highest-quality partly empty buildings in the CBD. They accounted for 45 per cent of all vacancies in the central city.
One of the most expensive towers, the ex-Lumley Centre, now renamed Shortland & Fort, is just under a third empty, he said.
"Because these partly empty buildings have had high vacancies for some time, it's not that surprising to us. This has been the story even before I joined JLL in July last year. If you take three of the properties with the highest vacancies, they equate to 45 per cent of all the vacancies in the CBD. A large portion of vacancies are concentrated in a few buildings," he said, naming ANZ, Shortland & Fort and 66 Wyndham.
Two other towers with a lot of empty space feature in the report: QBE Centre with a 38 per cent vacancy and Citigroup Centre with 23 per cent empty.
Meanwhile, Precinct Properties is refurbishing 1 Queen St and building in the Wynyard Quarter. Precinct is the owner of Auckland's largest new office tower, the PwC Tower at the $1b Commercial Bay development.
Mansons TCLM is building a new $650m office block at 50 Albert St and has recently completed new blocks at 136 and 155 Fanshawe St, providing new premises for law firm MC, 2degrees, Fidelity Life, Lion and KiwiBank.
Mansons TCLM is also well underway on groundworks for an office block in the Wynyard Quarter.
JLL's Read said no rent was being paid on many of the empty floors.
New developments had pulled tenants from existing towers. "The flight to quality has seen Commercial Bay and Britomart attract occupiers. Our leasing team have inquiries regularly about trying to find space there for occupiers, so if a floor came up in either of those, it would be snapped up pretty quickly.".
Ex-Lumley Tower, renamed Shortland & Fort
Address: 88 Shortland St Owner: Deka Immobilien Investment Gmbh Total floor area: 19,500sq m Vacancy: 30 per cent
Shortland & Fort, 88 Shortland St: now 30 per cent vacant. Photo / Google Maps
The most expensive building with large empty areas in Auckland CBD, according to JLL.
Germany's Deka Immobilien Investment Gmbh owns Shortland & Fort, which has 194 carparks and is near the 40-level Vero Centre.
"Shortland & Fort is a 19,500sq m building where four-and-a-half floors are not tenanted," Read said. That included level 15, part of level 17, and all of levels 18 and 20, he said.
Shortland & Fort has a pedestrian link to Fort St below. Its owner said in 2020 that it had a major refurbishment programme under way.
On August 3, 2020, law firm MinterEllisonRuddWatts left what was then the Lumley building for the PwC Tower at Commercial Bay. The law firm's Auckland office, with 245 people, is now on three-and-a-half floors of Precinct's new tower.
At the time, Precinct was said to be paying the law firm's Lumley rent for about two years to allow the lawyers to leave the tower. Asked if it was paying the rent, Precinct said it "did not comment on commercial contracts".
ANZ Centre
Address: Corner Albert St/Swanson St Owner: America's Invesco and Singapore-incorporated Reco Augustine Private Total floor area: 33,000sq m Vacancy: 22 per cent
The ANZ Centre: 22 per cent is empty. Photo / Dean Purcell
In JLL's latest report this ranked third in terms of valuations and vacancies, after HSBC and Shortland & Fort.
Empty floors in the ANZ are levels 11, 13 to 15, with more partial vacancies towards the top.
In 2018, former owner Precinct Properties sold half of the building for $181m to giant American business Invesco. Precinct has a policy of selling older buildings and recycling capital.
On February 9 last year, Precinct told the market it had struck a deal to sell the remaining half of the tower. On March 22, the Overseas Investment Office approved Reco Augustine Private's application to buy an equal and undivided half share in the office tower.
Ex-Chorus House, now called 66 Wyndham
Address: 66 Wyndham St Owner: NZ Federal Total floor area: 21,000sq m Vacancy: 59 per cent
66 Wyndham St - 59 per cent empty, according to JLL. Photo / Google Maps
Opposite St Patrick's cathedral, the former Chorus House is the worst off for vacancies among the collection of CBD towers. JLL lists it as 59 per cent empty and seven levels of the building don't have tenants.
In 2019, the Overseas Investment Office cleared United States-controlled NZ Federal to buy 66 Wyndham St from Christchurch-based interests for $144.5m.
NZ Federal is 80 per cent US-owned, 9.6 per cent various overseas entities, 3.1 per cent United Kingdom and 2.4 per cent Canadian, then Japanese, French, Norwegian and German interests.
The OIO said a special-purpose vehicle of Invesco Real Estate Asia Fund III had been established to buy the building, owned by New Zealand's 66 Wyndham Ltd.
