Unprecedented 55-storey CBD Development Opportunity

An Auckland CBD development site which has been granted fast-track planning approval for a residential tower which would be one of New Zealand’s tallest high-rise buildings has been placed on the market.

The 1,461sqm land holding at 65-71 Federal Street, on the corner with Kingston Street, is currently occupied by a seven-level parking building but it is being sold with a recently granted resource consent from the Environmental Protection Authority for a 55-storey apartment building with a nine-level podium.

The tower was approved under the Covid-19 Recovery (Fast Track) Consenting Act 2020 designed to speed up the resource-consenting process. It is consented at a 29:1 plot ratio (29sqm of building to one square metre of land), allowing the property’s purchaser significantly more development than a typical land holding of this size in Auckland’s city centre.

Bayleys’ National Commercial and Industrial Director Ryan Johnson says the site’s resource consent holds considerable value. “It is an extremely rare opportunity, with the density of development approved for this site substantially higher than what has been achievable on other sites throughout Auckland’s CBD to date. In combination with current annual holding income in excess of $1million from a carparking lease and the site’s corner position in an area undergoing significant rejuvenation, this makes it an exceptional landmark development offering.”

Bayleys has been appointed sole agents for the marketing and sale of the property by its current owner, Melbourne-headquartered ICD Property. Expressions of interest are being sought for its purchase, with offers to be presented by December 8. ICD Property Managing Director Matt Khoo says the opportunity to acquire significant development sites in Australia, where it is based, has resulted in the decision to sell the Federal Street property.

ICD acquired the site, located opposite Auckland’s iconic Sky Tower, in 2018 and invited five world-class architectural firms to participate in an international competition to design a landmark tower for the site. Australian firm Woods Bagot, in partnership with New Zealand architects Peddle Thorp, won the competition and their design was used as the basis for the resource consent.

The consented development has a gross floor area of 47,560sqm and a height of 183 metres, just a few metres shorter than the 187 metre Seascape apartment building currently under construction on Custom St East. But the Federal Street site’s more elevated position would make it the highest building in the CBD, excluding the Sky Tower.

The Woods Bagot design comprises 357 one-to-three-bedroom apartments, with larger apartments targeted at owner occupiers on the upper levels and smaller apartments suited to the investor market on the lower levels which could also potentially become part of a serviced apartment hotel operation. The lower podium levels also incorporate parking for cars, motorbikes and bicycles and a 1000 sqm marketplace at ground level designed to connect with the street. It would serve as a community space encompassing everything from vendors selling local produce through to eateries and bars.

Matt Khoo says ICD is proud of what has been achieved through the design and consent process, involving extensive consultation with Auckland Council and mana whenua. “We believe this has produced an industry-leading, very aspirational project for Auckland that unlocks the full potential of this site and connects it with the city’s past, present and future.

“In the process of doing this, we have also built a very strong support team of leading architects, engineers, urban landscapers and other service providers. Extensive work has also been undertaken on interior design and pricing for the apartments. We would be pleased to assist the next owner in whatever way we can, should they wish to proceed with this project.”

Cameron Melhuish, Associate Director of Bayleys’ capital markets division who is co-ordintaing the marketing of the property, says the site is currently occupied by a 1980s-developed seven-storey car park building leased to Secure Parking New Zealand until April 2029, with a three-month surrender/termination clause in favour of the lessor. This lease is currently producing gross annual rental revenue of $1,450,000pa plus GST.

“While much of the hard work has already been done in terms of preconstruction planning and design and obtaining a very favourable resource consent, the significant medium-term holding income provides additional flexibility to investigate other ways of adding further value to the property. This could include considering incorporating other uses permitted under the City Centre zoning such as office or hotel accommodation. The carparking lease would also provide income while any presales or leasing commitments are secured.”

Melhuish says the property is well located equidistant from the waterfront and Britomart transport centre and the Aotea civic, arts and entertainment area in a busy pedestrian precinct currently receiving major upgrades to improve walkability and foot traffic.

“Surrounded by some of Auckland’s best restaurants, cafes, shopping and entertainment attractions, it is attractively positioned to capitalise on the revitalisation of the area being provided by a plethora of nearby public and private investment initiatives either recently completed, in progress or planned. These include a number of nearby hotel and residential developments on Albert and Hobson streets, the Sky City convention centre and the City Rail Link.

“The Federal Street precinct has been identified in the City Centre Masterplan as part of a pedestrian priority laneway network connecting city centre destinations and character precincts. This is likely to see the current shared laneway alongside the Sky City casino extended all the way along Federal Street to St Patricks Square.”

Bayleys Executive Director David Bayley says a global campaign is being launched to market the property which is expected to attract strong offshore interest considering its rarity and unrivalled development value. He and Ryan Johnson will be travelling to Singapore later this month to present the opportunity to potential purchasers in conjunction with Bayleys’ international alliance partner Knight Frank.

Bayleys’ Director of Asian Markets James Chan will also be promoting the property to offshore and local Chinese developers and investors. He and David Bayley have been involved in the sale of a number of CBD land holdings to Chinese and Singaporean interests including the Seascape and Pacifica apartment sites and 5 Albert Street, purchased for a high-rise office development.

David Bayley says there has been a noticeable increase in Southeast Asian investment interest in New Zealand in recent months. “This is principally being driven by the reopening of our borders. There is only so much due diligence that can be done sitting at a commuter screen. Potential purchasers generally want to visit the site and get a feel for the area that its located in. The significant recent fall in our exchange rate against most currencies is also helping stimulate offshore interest, particularly out of Singapore but also from the United States and Australia."

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