‘Work from work’ - office popularity soars: Precinct Properties

Name: 'They're back' - landlord welcomes worker return to CBD
Uploaded: 2022-11-09T11:27:47+13:00
Duration: 236 s
Description: Scott Pritchard, CEO of Precinct talks One Queen Street, how Auckland is rebuilding and where it's going as a city. Video / NZ Herald

By Anne Gibson

Property Editor·NZ Herald·

17 Jul, 2023 05:17 AM5 mins to read

NOW PLAYING • 'They're back' - landlord welcomes worker return to CBD

Scott Pritchard, CEO of Precinct talks One Queen Street, how Auckland is rebuilding and where it's going as a city. Video / NZ Herald ...

More Aucklanders are back at their offices five days a week in a trend dubbed “work from work” by New Zealand’s largest commercial listed landlord.

Scott Pritchard, chief executive of multi-billion dollar landlord Precinct Properties, says his business has been studying office workers returning to their desks.

Those workers are buzzing up and down in their office lifts in greater numbers as Covid fears recede.

Data from Commercial Bay office block lift usage showed the number of people returning to work was back to pre-pandemic levels, he said.

Around 10,000 people work in Precinct’s towers at Commercial Bay, on two waterfront blocks:

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* New $1 billion PwC tower, 15 Customs St West;

* Aon Centre, 29 Customs St West;

* Jarden House, 21 Queen St;

* HSBC Tower, 188 Quay St;

* One Queen Street (yet to re-open after refurbishment) where 1000 people will soon work.

Not only are more employees in their offices but most are there Mondays to Fridays, Pritchard said.

That’s a turnaround after the lockdowns ended in 2021, although Pritchard has previously said that Precinct was less hit than other businesses by people working from home.

Last year, Pritchard said more than 7000 of the approximately 10,000 workers whose offices are in Precinct Properties’ two downtown blocks were back at work and he thanked them for that.

Today, he said an example of offices’ popularity was his company’s leasing success at One Queen Street opposite the ferry terminal.

Deloitte's name is now up at Precinct Properties' refurbished One Queen Street building opposite the Ferry Terminal. Photo / Precinct Properties

“What we’re seeing in the commercial office market confirms that there is continued demand for A-grade office accommodation – the flight to quality phenomenon for many businesses,” he said.

Deloitte’s name has now gone up on the $298 million refurbishment of One Queen Street. Installation is a milestone in Commercial Bay’s completion, Pritchard said. The building is 95 per cent leased.

Deloitte signed a 20-year lease for 7500sq m in six levels, leaving levels 12 to 18 at the Deloitte Centre, 80 Queen St for the waterfront.

Pritchard said law firm Bell Gully had taken a 15-year lease for three levels of One Queen Street. That business has a reception at level 21 of the Vero Centre, 48 Shortland St. The Vero tower is owned by Precinct rival Kiwi Property.

“Our new clients Deloitte and Bell Gully, as well as others in our private office suites on levels four and five, will bring over 1000 more people to Commercial Bay every day,” Pritchard said.

Thomas Pippos, Deloitte chairman and chief executive Mike Horne said the sign going up meant they were a step closer to shifting in.

Precinct’s ‘private offices’ within One Queen Street were designed by Warren and Mahoney, and Pritchard said they had set a new rent benchmark for office space in this country, some areas leased at $1000/sq m per annum.

Private offices were also offered from level 36 of the PwC Tower and level 17 of the HSBC Tower. Offices are from 139sq m to 454sq m and have shared boardrooms.

A new 139-room five-star InterContinental hotel with frontage and main lobby entrance from Quay St is also at One Queen Street.

The hotel will operate from levels six to 11 but a rooftop bar has been developed on level 21 of the made-over building, with construction work carried out by L.T McGuinness.

But don’t be fooled all Auckland blocks are so well occupied. The city has a significant ‘ghost tower’ problem. New tower blocks are still rising in Auckland’s CBD, despite the empty floors in many existing buildings.

A survey last year found the ex-Chorus House on Wyndham St is 59 per cent empty, the former Lumley Centre on Shortland St is 30 per cent empty and the ANZ Centre on Albert St is 22 per cent empty.

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. 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.

The latest vacancy report from JLL out in May showed occupation in the towers surveyed had risen lately.

Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.