Precinct Properties is gaining Bell Gully as a tenant for its Commercial Bay development once the project is completed in 2022 and the law firm will leave a five-floor vacancy at Kiwi Property Group's Vero Centre in Auckland's Shortland Street.

Precinct is also gaining the Media Design School as a new tenant at stage two of its Wynyard Quarter development.

It appears that Bell Gully may be downsizing; it currently occupies 5,912 square metres of the Vero Centre but has committed to lease just 3,800sqm at the One Queen Street building at Commercial Bay which is replacing the Downtown shopping centre at the bottom of Queen Street.

Bell Gully managing partner Haydn Wong says the new premises will provide "a modern working environment with greater efficiency of space requirements and less need for onsite storage.

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"In the coming years, the Commercial Bay/Queen Street precinct will be at the heart of the Auckland CBD and we are looking forward to being part of this new growing community," Wong says.

Precinct says the design school has signed a 15-year lease on 4,760sqm at the Wynyard Quarter, occupying 60 per cent of that part of the project – the property investor announced in November that stage two would proceed on an uncommitted basis.

"The addition of the Media Design School to our innovation precinct is significant and demonstrates the momentum that's underway to create a vital new creative community," says Precinct chief executive Scott Pritchard.

"We believe Wynyard Quarter will be on a par with leading international innovation precincts and having secured one of the world's leading design and digital tertiary institutions is a huge advancement," Pritchard says.

The second stage of the development is expected to complete at the end of 2020 and will provide total net lettable space of 8,290sqm. Once fully let, Precinct is expecting a yield on cost of more than 7 per cent.

The Bell Gully commitment takes the One Queen Street project to being 76 per cent pre-committed – as previously announced, InterContinental Hotels Group has committed to 11 levels of the building.

"We are delighted to have secured leading law firm Bell Gully at One Queen Street, three years ahead of practical completion," Pritchard says.

"Securing this commitment from outside our existing portfolio is a great result and illustrates the quality of the Commercial Bay precinct."

Kiwi chief executive Clive Mackenzie says his company wishes Bell Gully "every success in their onward journey. While we are disappointed to see the firm leave, the advance notice by Bell Gully provides us with sufficient time to begin discussions with prospective tenants."

Including the Bell Gully lease, the Vero Centre is 94 percent occupied with a weighted average lease term of seven years.

- BusinessDesk