$220m plans by NZX property business: Albany, CBD projects in duel expansion drive

The smallest NZX-listed property entity is planning to create around $220 million of commercial real estate assets, in which it develops one new building and expands another.

Asset Plus plans to spend $120m building a new office block for Auckland Council in Albany and $100m on an existing CBD building which the council will soon leave.

Mark Francis, Asset Plus managing director, said around 1200 people would work at 6-8 Munroe Lane at Albany while three new floors would be added to the four-level Auckland Council Service Centre at 35 Graham St, creating an extra 13,000sq m of office space.

At Albany, a six-level building with 2.6ha of indoor floor space is planned as the new council northern service centre. Staff from Henderson Orewa and Takapuna could relocate there, although the council is yet to announce details.

At Graham St, council staff might move to the headquarters on Albert St or Bledisloe House.

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The Graham St building is on a 4841sq m freehold land block overlooking Fanshawe St and the Viaduct Harbour. Francis said once the extra floors were added, the building would be around 24,000sq m and able to accommodate a significant workforce.

Nearby, Mansons TCLM is developing a new office block at 136 Fanshawe St but is yet to announce its tenants. A walkway from Hardinge St to Fanshawe St is part of that project and Francis said it would give direct access to staff in his expanded building to the waterfront.

The value of 35 Graham St was not just its location but the third-hectare floor plates of 3439sq m, he said.

CBRE said when it was marketing the building for sale last year that it generated rent of $3.9m plus GST and was fully occupied by the council. But the lease only ran for a further two years, the agency said.

Asset Plus bought the building last June. It has a market capitalisation of just $100m, making it the lowest-value entity of 10 listed property stocks in this country.

Melbourne architects Woods Baggot was chosen from a group to design changes and Francis said a rooftop entertainment area which could show films, provide entertainment and stage social events was planned.

"The building needs a significant structural upgrade to take the extra floors," Francis said. Resource consent is anticipated by December and construction is due to start next June, with an expected completion around December 2023.

"The June 2021 start date for Graham St is indicative and is based on the assumption that we have a pre-commitment from a tenant or tenants," Francis said.

Part of 35 Graham St's facade and an artwork had heritage classification and would be retained, he said.