Step off a train at Britomart or Sylvia Park and you're at the gateways to two of Auckland's busiest shopping strips. But if you didn't already know that, could you tell?

Exit signs provide directions but nothing more. Little about the spaces signal you are about to enter consumer wonderlands. But change is approaching fast, as transport authorities, retailers and property developers seek to unlock the commercial power of previously dormant transport hubs.

Bayleys national director commercial John Church says: "Developing commercial and residential space around transport hubs makes sense, both for developers and transport operators. With city centre space increasingly constrained, infrastructure-led developments have taken on new importance.

"Globally, most new large mixed-use schemes are part of existing or new transport hubs. By collaborating with a development partner, transport authorities can increase the level of income they receive from their assets, developing a revenue stream separate from fare-payers and taxpayers."


Church adds: "A well-connected and fully integrated transport hub can lead to increased economic activity in the area surrounding it, which in turn helps to attract new developments, occupiers, businesses and employment initiatives.

"For developers, the benefits are clear: transport hubs offer them urban land they can't get elsewhere, and the activity around the transport hubs themselves supports new development, potentially transforming the commercial and residential property market over time. Buyers and tenants want to be near the hub, so footfall and demand are increased."

In many cities, rail operators are exploring ambitious and creative ways to make the most of their commercial real estate.

Auckland Transport (AT) has been calculating the potential of existing and planned stations, and sees big opportunities.

Projects range from cosmetic enhancements to station environments to ambitious use of smart phone technology in partnership with major retailers.

The authority manages the largest and most strategically important urban transport network in New Zealand, serving a rapidly growing population - currently 1.5m and projected to reach 2m by 2033.

AT manages more than 300,000 trips per day on its rail, ferry and bus network and that massive footfall will increase. The network comprises $16.5b of mainly road and public transport assets. The train stations, bus interchanges and ferry ports alone represent substantial value to be unlocked.

AT property manager Sean Corbett says: "We see the opportunity to increase public transport patronage by offering a higher-quality, more integrated service.


"In terms of retail, that could be as simple as making provision for more small format, grab-and-go-type offerings in areas where commuters are either waiting for transport or are disembarking from it."

"We are setting the parameters and controls around what we put in our stations and interchanges. For example, the standard of coffee shops and their product at Albany should be the same as at Pukekohe or Newmarket. It's that consistency of service that we want to achieve," adds Corbett.

Partnering with the private sector to develop land around its train stations, bus interchanges and ferry terminals is one of the options available to AT. "It's about identifying the opportunities within and around our transport assets, including in some cases adjoining council land. The availability of funding is a big determining factor," Corbett says.

Church says the central city transport hub - which is home to Britomart rail station, a major bus interchange, the ferry and cruise ship terminals and the soon-to-be up and running City Rail Link - is undoubtedly the focal point of commercial development in Auckland.

"One of the reasons Precinct Properties chose to build its $680 million Commercial Bay office and retail project at Quay Street on the waterfront is the site's transport options, and worked with AT and the council early on to achieve a cohesive and co-ordinated development."

Developing transport hubs is not without challenges. Costs can be higher than standard developments due to the layout and engineering constraints imposed by the transport infrastructure, and the construction of high-density buildings comes at a premium. In addition, the aims and interests of the transport operator and the commercial developer don't always align.

Developers are looking for the best return, transport authorities are trying to operate their bus and rail networks efficiently - two very different business and construction cultures.

Church says: "Aligning the aims and commercial aspirations while enhancing the transport network is challenging, and relationships can often break down over the lifetime of the project. Early involvement of the developer, as in the case of Commercial Bay, is helpful, as they can then work with the infrastructure team to develop the most suitable structure, having fully explored the site and assessed its potential."

Kiwi Property is working with Auckland Council on plans for its holdings in the South Auckland suburb of Drury. Earlier this year, it announced it had bought two land parcels, totalling 42.7ha, for $39.8 million, and secured agreements to acquire a further 8.6ha.

The three greenfield sites are close to the junction of the Southern Motorway, Great South Road and the North Island main trunk railway line, approximately 35km south of Auckland's CBD.

Kiwi Property CEO Chris Gudgeon said the company's plan was to develop a town centre, to complement the existing Drury town centre.

"We will work with Auckland Council and infrastructure providers to secure a town centre zoning providing for commercial and retail uses integrated with high, medium and low-density housing, all within walking distance of an integrated public transport node," he said.

In Wellington, multimillion-dollar projects at Lambton Quay will be well served by the area's strong public transport network.

At Willis Bond's PwC building, the retail and hospitality offerings are in a high foot traffic area due their proximity to Wellington Railway Station.

Wellington transport officials are fully aware of the potential of their assets and are looking to improve facilities at their stations to better reflect the revival of the centre.

Changes being considered include a concierge service at the central city bus interchange and Wellington Railway Station to improve commuter flow, better signage that directs users to popular destinations and improved wi-fi. And a proposal to ban private vehicles from the central city and pedestrianise areas such as Lambton Quay could increase public transport patronage.

Retail consultants First Retail Group says that public transport is pivotal to the success of CBD retail and hospitality offerings, and that spaces close to public transport hubs will be in demand.

"The performance of street-facing businesses in CBDs will, in the future, be tied to consumer adoption of public transport.

"Transport hubs drive an audience past a retailer's doors on a consistent, reliable basis. Few other locations can deliver such volumes and diversity - both necessary in ensuring retail success," says the group's managing director Chris Wilkinson.

John Church, Bayleys.
John Church, Bayleys.