Parnell's key selling point is its boutique and specialist retailing appeal
Parnell is rising as 'the phoenix' of Auckland's city fringe commercial and retail suburbs, says John Church, Bayleys' national director commercial real estate.
"Since it fell from favour with the city's hip and elite crowd in the early 2000s, Parnell is now re-establishing itself as a sought after commercial precinct," Church says.
Office vacancy data from Bayleys highlights that there are no vacancies in A-grade or premium-grade commercial buildings in the area, while the overall vacancy rate has dropped to 13.1 per cent, down from 18.8 per cent just two years ago.
Church says he expects overall Parnell vacancy levels to reduce further over the course of the year and put pressure on rents at the upper end of the market.
"This is a welcome scenario for existing Parnell businesses wanting to see the 'village' return to its 1980s/1990s halcyon days. Anecdotal response from Parnell commercial and retail building owners reflects a confidence that recent activity shows Parnell to be undergoing a sustainable revival."
From a hospitality perspective, Parnell gradually fell from favour throughout the late 1990s and early 2000s as The Viaduct, Mt Eden, Newmarket, Ponsonby Rd, and more recently the Wynyard Quarter, Britomart and areas around Sale St and the City Works Depot rose in popularity.
Major commercial developments adjacent to these precincts also served to increase the outflow of office tenancies from Parnell.
However, a list of high quality restaurant and bar operators are continuing to set up shop in Parnell alongside boutique retailers and innovative design-led businesses wanting to be close to the city, but in a location with a bit of exclusivity and character.
Hospitality and food and beverage are leading the pack with the arrival over the past year of the Woodpecker Hill eatery in the Old Bog premises, the recently opened 46 & York behind the top of Parnell Rise, Italia Square hub with its café, bar, gelateria, delicatessen and restaurant medley, and Biskit Cafe housed in a modern redesigned space on the corner of Parnell Rd and Gibraltar Rd.
Church says that over the past 12 months, Parnell has also welcomed a number of big Auckland commercial players with plans to redevelop and reconfigure existing spaces and restore historic buildings.
The list includes the likes of Krukziener Properties, Mansons, Masfen Group, Phillimore Properties, Fearon Hay Architects and Vantage Group.
Ross and Ken Healy, along with Terry Gould of Phillimore Properties have purchased the 13,850sqm Textile Centre at Kerwyn St, and plans are underway to create something akin to their successful hospitality and retail development Imperial Lane in downtown Auckland.
At present the Textile Centre building is virtually fully occupied with an existing broad spread of different sized tenancies, and a variety of tenants. Phillimore Properties wants to create a laneway with the possibility of a café and upmarket retailers.
Just down the road, three 1940s sheds in Faraday St have been purchased by award-winning Fearon Hay Architects - with plans to create a mixture of office, hospitality and retail space. The 1,461sqm property comprises four areas split into a warehouse, loft, galley and hole-in-the-wall unit perfect for a cafe.
Fearon Hay wants to retain the character of this property and its heritage aesthetic features such as the brick façade, timber beams and high stud ceilings.
Seasoned property investors Vantage Group, headed by Justin Wyborn, have snapped up 101 The Strand with a vision to transform the large character building into a retail and showroom complex similar to that of the City Works Depot in central Auckland.
Neighbouring tenants include an exclusive collection of specialty homewares stores including Matisse, Dawsons Furniture, Palazzo Kitchens and others that could see it become a destination shopping precinct for home decorators and DIYers.
Mansons has released its plans to demolish an existing warehouse and showroom at 96 St Georges Bay Rd and build a 12,000 square metre $100 million office block with 240 carparks.
Krukziener Properties has purchased the Attwoods site and plan to redevelop the block between Faraday St and Cleveland Rd.
"There is a tight group of landlords that own a large proportion of Parnell's commercial real estate and they are demonstrating a willingness to work in unison to make Parnell 'cool' again," Church says.
Church says that increasingly, Parnell landlords now had the freedom to pick and choose who will be the most suitable fit for their property.
"There is, however, a lack of larger floor plates available for lease given Parnell's recent history of smaller tenancies. Post the Global Financial Crisis, landlords had to carve up their premises into smaller tenancies to keep pace with the number of businesses that were downsizing," he says.
"That meant a lot of the larger floor plates were lost so for a tenant looking for more than 300 square metres in Parnell there's not a lot of options."
Church says that cementing Parnell as a destination for shopping, dining and drinking is a common vision among existing operators and one that will be made easier with the completion of the new rail platform.
The $6 million two platform facility near the Auckland Domain is expected to have 2000 people through its gates during the morning peak making it one of the busiest stations in the country when it opens around October this year.
"Parking is very tight in Parnell which can put some people off. We are expecting the future rail platform to ease some of the pressure on the roads and make it easier to get to and from the main village," Church says.
"Given its location between the CBD and upmarket residential suburbs like Remuera, Epsom and Newmarket, Bayleys Research' data indicates the rail platform will act to intercept people on their commute home.
"Theoretically they can stop in before work for a coffee or breakfast, and then after work for dinner and a drink before continuing home once the traffic has died down."
Historically, Parnell has fallen in and out of favour several times since 1841 when land was purchased and subdivided into 36 blocks to create Auckland's first suburb. Early Parnell was home to mechanics and tradesmen who worked in the industrial hub of Mechanics Bay.
By the 1900s the burgeoning suburb was connected by highway and rail links, with tramcars running up Parnell Rd.
Cheryl Adamson, general manager of the Parnell Inc business association, says that as new retail and commercial premises begin to emerge "it feels like we're on the cusp of a return to what Parnell was described in the '80s and '90s, although I think it (a full recovery) will take some time."
Adamson says Parnell has become particularly attractive to high-tech marketing and design-led businesses which are taking advantage of being close to the city and the good transport connections.
To reflect the area's growth beyond the main shopping and hospitality hub of Parnell Rd, Parnell Inc has expanded its boundaries now taking in the area from the former Carlaw Park site across to Gladstone Rd.
The Real Estate Institute of New Zealand has its headquarters in Parnell and the institute's head Colleen Milne notes that Parnell's key selling point is its boutique and specialist retailing appeal - with no real space for big box outlets.
"Parnell's shopping district has also proved resistant to the effects of malls, which have hollowed out other village-style high streets around Auckland," Milne says.