An artist’s rendering of the future Northcote town centre.
An artist’s rendering of the future Northcote town centre.
Eke Panuku’s urban regeneration role centres on breathing life back into the areas of Auckland that are not reaching their full potential.
It does this by working on existing town centres across the city, creating plans, preparing the sites, then attracting private investment for residential and commercial development.
The model has already worked well in the reinvigorated Wynyard Quarter and is now being applied in other centres, including Northcote, Manukau and Avondale.
A key part of Panuku’s regeneration strategy is selling development sites, which can be challenging because of today’s property market and economic settings.
Panuku chief executive David Rankin says Panuku continues to sell development sites: “We are taking sites to market and we’re getting quality development partners, but the process is slower and harder than it was.”
He says developers face issues scaling new apartment construction due to high inflation and decreased demand.
“It’s particularly hard with the higher-density apartment projects we are looking for. If you look at council consenting and residential consenting in general, both are well down from the earlier highs. Having said that, we are still getting site sales.
Eke Panuku CEO David Rankin.
“It depends on who you listen to, but we see signs the residential property market may have bottomed out… even if it is a modest recovery. When we endeavour to sell sites, a developer needs the feasibility for building and selling apartments to stack up. That’s difficult right now, because there has been significant inflation in the cost of building apartments over the last three years.”
At the same time, he says residential developers are seeing a drop in apartment pre-sales.
“There is still strong demand for A-grade commercial property. It was already that way, but the backwash of Covid (and the move to working from home) means employers are trying harder to make the workplace more interesting and enjoyable for staff.
“Mansons is going gung-ho with office and hotel projects. Precinct Property recently went into the final stage with us over agreements for big office developments in the Wynyard Quarter and have entered a development agreement with us for the Downtown Carpark site. It will have significant residential and other components, but there are offices going in there as well.”
Panuku is not immune to the effects of property cycles. The price it can get for a site sale, the time taken to reach an unconditional agreement and the cost to a developer of building on a site all have an impact on the development agency. Nevertheless, Rankin remains optimistic.
Panuku’s strategy is to stick to its programme: “We operate to value, we don’t do fire sales. We accept we have to buy and sell on the market, over the long term. As a regeneration agency, that works well for us.”
“Regeneration is not an overnight thing. We have a plan in each area we work in and a clear set of strategies. It’s important to execute on them. Obviously the economic cycle can speed it up a bit or slow it down a bit. But the basic aim is to maintain momentum.”
Late last year, Panuku took two sites to market: North Wharf is currently a hospitality area on the harbour edge of the Wynyard Quarter and, on a much larger scale, the whole of Northcote’s town centre.
Wynyard Quarter's North Wharf.
Rankin says neither project is going to start immediately. “We’re in the process of beginning development and the consenting still needs to be done. But the stable development players in this market, the kind of partners we tend to deal with, are looking through the cycle to a time when they’ll be ready to proceed and sell their product.”
The Northcote site stands out as the first time anyone in New Zealand has been able to create an entire town centre in an existing suburb and put together a redevelopment plan for the whole thing. The land extends over several hectares and includes multiple parcels. Panuku started with an underlying ground lease and accumulated all the other property interests over time.
“The old original Northcote Borough Council, which was developed in the late 1950s and early 60s, had the underlying ownership, but then there were dozens and dozens of investors and businesses all stacked up on that with leases in perpetuity.
“We worked our way through two and a half years of buying them all out. We used the urban renewal provisions of the Public Works Act where it was necessary. This is a unique sort of authority that regeneration agencies have, and it means you can stop one or two property owners holding out on a comprehensive redevelopment.
“It’s going to be a really exciting opportunity, a 10 to 12-year project. The centre will be significantly changed and massively intensified. There are no residents there at the moment; we will triple or quadruple the housing in the immediate area.”
Panuku works to regenerate priority locations, mainly town centres such as those in Northcote or Manukau, but it also has responsibility for managing other properties in Auckland Council’s portfolio. “They offer an opportunity to get not only revenue, but to help contribute to the council’s growth strategy, which is usually enabling a decent, well-designed medium to high-density development.”
One such site sits on the corner of Dominion Rd and Valley Rd in Mount Eden. Immediately before the Christmas break, Panuku reached a conditional agreement for the site.
Rankin says it is a terrific site for an apartment development.
“This was a positive sign for use despite the time it took and the difficulty getting it over the line. We’ve got a quality player who is looking through the cycle.”
The site is well-connected for public transport, sitting directly on a major bus route to the city centre. Across town, another Panuku development at Avondale looks set to make use of the City Rail Link when it opens.
Rankin says it’s no accident all of Panuku’s main regeneration areas are either on the rail line or are in places like Takapuna and Northcote, where there are frequent fast bus services.
Eke Panuku is an advertising sponsor of the Herald’s Project Auckland report.
