New infrastructure being built across Auckland - spearheaded by the City Rail Link - is set to transform the central city and city-fringe commercial and retail real estate leasing markets, according to new property research.
The $4.4 billion City Rail Link – due for completion in 2024 - will not only transform Britomart from being a terminating or departure station into a "connection stop", but will also open up some 3.4 kilometres of new underground rail link connecting the existing network at a redeveloped Mount Eden station.
By more than doubling the city’s rail capacity, the infrastructure would also double the number of Aucklanders who live within a 30-minute commute of the CBD.
Two new underground stations are being created as part of the City Rail Link expansion – the first, Aotea Station, on the corner of Wellesley and Victoria streets, and the second at Karangahape Road, with entrances on Mercury Lane and Beresford Square.
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Bayleys Real Estate’s Auckland commercial and industrial director, Lloyd Budd, said that the two new stations in addition to what will be an expanded Mt Eden depot would add some 63,000 square metres of commercial office space, along with new retail developments and hotels, and residential apartments complexes.
“The city rail link’s ability to deliver workers en-masse to previously underserved CBD locations will further transform leasing activity across the central city and present new opportunities for tenants,” Mr Budd said.
“The CRL will promote new development patterns along the Queen Street/Karangahape Road spinal column. We are forecasting that older, B and C-grade stock in the midtown and uptown areas will now attract a second look from both developers and owners as they look to upgrade their space offering to match the new build stock which will ultimately be coming on line adjacent to the new train stations.
“Standout amongst the list of projects coming on line in the immediate future is of course Precinct Properties’ $1 billion-plus commercial, retail and hotel Commercial Bay development located beside Britomart.
“Major commercial tenants already taking up floor space include professional services giant PwC, and law firms Chapman Tripp, DLA Piper and MinterEllisonRuddWatts.
“Once fully tenanted, Precinct estimates 10,000 office workers will occupy space in this and adjoining buildings it owns, including the existing PwC Tower, the AMP Centre, Zurich House and HSBC House.
“Meanwhile in mid-town, the Aotea station site has around 5,000 square metres of developable land owned by Auckland Council - with resource consent secured for a 41,000-square metre office tower above the main station entrance on the corner of Wellesley Street and Mayoral Drive.”
City Rail Link Ltd’s construction development scenario for the site envisages office accommodation for 3,000 people, and a second commercial tower just to the south.
“Further along the line, Karangahape Road station will have an above-ground development on a 2,600sq m site owned by City Rail Link Ltd,” Mr Budd said.
“And City Rail Link Ltd says land it has acquired at its Mount Eden Station will provide potential for more than 100,000sq m of redevelopment – most of which will be in the residential sector, with an element of retail space to sustain the influx of residents who will occupy those dwellings.”
The CRL work is just one piece in the $29 billion of transformative projects underway or planned for Auckland.
Mr Budd said other big developments included the expansion of Auckland Airport's runway and terminals, along with growing its logistics amenities; opening the fire-damaged New Zealand International Convention Centre; and completing the Waikato Expressway and Puhoi-to-Warkworth motorway.
“Improved road and rail networks, are fundamental to most real estate developments – both commercial and residential,” Mr Budd said.
“Historically, road and rail improvements have delivered a particularly strong economic multiplier effect by making geographic areas more accessible than previously. Think the Northern Motorway expansions of the late 1990s which saw the likes of the whole Albany basin, and then concentrically Silverdale, grow exponentially.
“Or more lately, the North-Western motorway opening up Westgate shopping and civic centre, and the electrification of the Eastern Line rail link seeing major refurbishment and reconfiguration of commercial land in and around Panmure’s central business district.”
