The opportunity to acquire the former Auckland Star site at 28 Shortland Street, carrying a resource consent for a 35-level commercial and apartment tower, is on offer through CBRE.
Located just two blocks from the waterfront in Auckland’s premier CBD commercial precinct, the site offers the chance to plan and realise a significant city project, says CBRE executive chairman Brent McGregor.
“This is an opportunity to make a high-profile contribution to the continuing development of the Auckland cityscape and add to the premium working and living opportunities in the CBD.
"As one of just a few vacant development sites in the CBD, the timing is good as occupier demand is returning and interest rates are falling.”
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The 2,000sq m site, which has dual frontages to Shortland Street and Fort Street, is for sale by international expressions of interest closing on December 11, following the current owner’s decision to divest it in order to focus on other projects.
As well as the streamlined development pathway provided by the approved resource consent, the site offers holding income amounting to $1.275m annually from leases to Wilson Parking and a small cafe, says CBRE senior director of capital markets Warren Hutt.
“The new owner will receive the dual benefits of the existing resource consent to construct a mixed-use tower, as well as strong holding income while they firm up their development plans and embark on the journey towards bringing the long-awaited development of this site to life.”
The resource consent permits the construction of a landmark tower development, including eight levels of retail and office space and 27 levels of apartments. Four levels of basement car parking are also provided for.
The consented plans allow for a podium base, designed to accommodate two levels of retail and hospitality premises, with dual entrances from Shortland Street and Fort Street.
This will activate both the north and south frontages of the building and provide high quality public interactions with the new development, which will also face directly down O’Connell Street to the south and Commerce Street to the north.
CBRE senior director Warren Hutt says development opportunities in this tightly held, centrally located CBD precinct are not often seen on the open market.
“The chance to develop a highly significant addition to the Auckland CBD skyline, with truly meaningful scale afforded by current and planned zoning rules, is extremely rare.”
A protected viewshaft down Commerce St means any development on the site will benefit from views along the Commerce Street corridor to the harbour, which is just two blocks away.
The site is located close to the luxury retail stores of lower Queen Street, with brands including Prada and Gucci no more than 150 metres away.
A new Cartier high-end jewellery store is also planned for the corner of Fort and Queen Streets, which will include a substantial frontage to Fort Street extending down towards the site, Hutt says.
“The addition of luxury retail brands to this area has contributed to a real uplift of the lower Queen Street retail precinct. This will gain further traction with the arrival of Cartier, which will ignite further reinvigoration of Fort Street on the doorstep of the site.”
The impressive roll call of office occupiers on Shortland Street show that the precinct is already well-established as a premier business address, says McGregor.
“Shortland Street tenants including Craigs, BNZ, Russell McVeagh, Simpson Grierson, Suncorp, Goldman Sachs, Forsyth Barr, and Cameron Partners, among many others, all demonstrate that this is the place to be for financial and professional services organisations.”
Key transport amenities including Britomart Station, the ferry terminal and the Albert Street Bus Exchange are also close by, as well as multiple hotels and the Commercial Bay retail and hospitality development.
The trend of a flight to quality among office occupiers has gained momentum since Covid, with employers realising the importance of providing attractive office environments for recruitment and retention of staff, Hutt says.
“Recent leasing activity has demonstrated the strength of the premium office market, with new leases commanding notable increases on previous contract rent levels. This trend is positive for developers considering the 28 Shortland Street opportunity.”
The 2024 New Zealand Office Occupier Sentiment Survey, recently published by CBRE Research, also highlights the desire among employers to relocate to higher quality offices.
The survey found that 39% of organisations nationally planned to relocate to better offices, while in contrast, only 12% were planning to stay put and renegotiate their existing leases.
The strength of the central Auckland apartment market is a further benefit to developers considering the site. Central Auckland apartment rents have seen steady growth, with post-Covid rental growth well above long-term averages.
The Auckland apartment development pipeline is also constrained, with numerous projects reaching completion and only a few launches of new developments. High forecast net migration will add to the shortage of apartments.
“With the consented plans for 28 Shortland Street including 177 apartments, this is a key opportunity to contribute to the central city residential market in a meaningful way,” McGregor adds.
- Supplied by CBRE
