The Auckland supermarket damaged by fire yesterday was undergoing the biggest upgrade of a New World store in New Zealand, in a contract thought to be worth around $28 million.
Insiders said the job by Savory Construction was so big that planning started last decade and had taken years before work even began.
Previous store owner Jason Witihira worked on plans to transform what was considered an extremely dated building, unable to offer full services to New Zealand’s wealthiest in Herne Bay, the CBD, Ponsonby and St Mary’s Bay.
Current owner/operator Steve Purton had begun the long-planned changes before the blaze started, having only bought the store this decade.
Funding the upgrade may well have been a 50/50 arrangement between property owner Foodstuffs via its subsidiary The National Trading Company and Purton.
But the works were planned during the last four to five years because they were so extensive.
Foodstuffs saw the job as crucial to its brand, in its high-profile western CBD position.
The 1990s cream-coloured store at 2 College Hill was to be reclad to give it a sharper, dark exterior, more like the newer New Worlds at Hobsonville, Pukekohe and Pt Chevalier.
New World Victoria Park’s dated curved glass curtain wall feature window behind checkouts, facing Victoria Park, was also to be removed.
A different style of glass curtain wall was to be installed, with more of a square, distinctive, edgy profile to put the 1990s behind the store.
All up, the idea was to attract more customers to keep such an important location relevant by offering customers all the extras they find in newer stores.
New travellators were to be installed between the ground-floor car park and the suspended floor of the supermarket.
An entirely new store layout was planned with a number of zones within the store to be boarded off from shoppers while plans were carried out.
At no time was the store to be shut, despite the extensive scope of works.
New lighting, refrigeration, racking, air conditioning, checkouts and the introduction of a “click and collect” system in the basement were also part of the scope of works.
To update the store’s operations and give customers click and collect as well as online delivery via vans, new storage and delivery areas were being built.
Those were to be in two parts of the property: in the mezzanine area and the suspended deck, which is the loading bay off Franklin Rd.
Distributing groceries in this way means new ambient, chilled and frozen storage areas had to be created and that was what was happening when yesterday’s blaze hit the mezzanine area.
A massive seismic upgrade was also planned for the entire three-level structure with concrete and steel to “stiffen” the building, the source said.
Foodstuffs aims to have its supermarkets around 67% of new build standard for seismic rating but New World Victoria Park was not near that, he said.
Around $3m of the current works alone were the cost of the steel and concrete to strengthen the building.
“This was the biggest New World upgrade in New Zealand because that store is the flagship for the brand, bringing in annual revenue of $100m at least annually,” the insider said.
No other New World comes close to that, he said.
From approximately $100m annual revenue, net after tax profit of $4m to $6m was being generated, making it the most profitable and valuable New World in New Zealand, he said.
“The whole store was being reconfigured,” the insider said.
Zones of the store were being cordoned off for the works to occur, with one shopper telling how jackhammers were operating in boarded-off areas behind checkouts.
But what happened to the sprinklers, which are meant to extinguish any fire before it takes hold, is one question many in the sector are asking right now.
Were some or all of the sprinklers turned off yesterday, and if that happened, were the insurers told? Reconstruction within zones like this can mean fire protection measures are temporarily affected while works are carried out.
New supermarkets have many self-service checkouts and fewer staff checkouts so that was also part of the plans for change.
New World Victoria Park was the local store for Lindsay Rowles, one of Foodstuffs’ top bosses.
He is the general manager of retail and property and said to be the man who’s watching how we shop and eat.
So will the store be demolished and a new structure rise there or could the fire-hit building be fixed?
That will be the call of Foodstuffs’ insurers, who will engage structural engineers to assess how much water and fire damage has affected the structure.
The engineers will write a comprehensive report recommending either fixing or demolishing and rebuilding.
Experts are divided about the rebuilding costs, one estimating only $20m but another estimating $50m. Demolition alone could take months and cost $1m to $2m, they say.
Auckland Council values the building at $17m but the site at more than $30m, giving an end valuation of $54m for 2 College Hill.
One thing is for certain: people in the area will be without their New World Victoria Park for months, perhaps years, depending on what decisions are taken about the existing structure’s future.
Anne Gibson has been the Herald‘s property editor for 25 years, written books and covered property extensively here and overseas.
Agent gets early morning call about deceased estate.