Latest / The SME Stream / Reissue: Vacant lots and empty stores: The dire state of Auckland CBD real estate revealed

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Reissue: Vacant lots and empty stores: The dire state of Auckland CBD real estate revealed · The SME Stream

• 0:19
  Speaker 1: Kyota A.
• 0:19
  Speaker 2: Chelsea Daniels here, host of the Front Page. We're taking
• 0:22
  Speaker 2: away breakover summer, but to help build the gap, we're
• 0:25
  Speaker 2: re issuing some of our most significant episodes of twenty
• 0:29
  Speaker 2: twenty five on behalf of the Front Page team. Thanks
• 0:32
  Speaker 2: for listening and we look forward to being back with
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  Speaker 2: you on January twelfth, twenty twenty six.
• 0:43
  Speaker 1: Kyota.
• 0:43
  Speaker 2: I'm Chelsea Daniels and this is the Front Page, a
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  Speaker 2: daily podcast presented by the New Zealand Herald. Is New
• 0:54
  Speaker 2: Zealand's largest city, dying Auckland is home to roughly a
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  Speaker 2: third of the country's population and is predicted to grow
• 1:03
  Speaker 2: even bigger in the coming years. The city of Sales
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  Speaker 2: is by far the largest contributor to New Zealand's economic output,
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  Speaker 2: generating about forty percent of GDP. But walk down many
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  Speaker 2: of the inner city streets and you'll see vague lots
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  Speaker 2: with a lot of potential. Today on the Front Page
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  Speaker 2: ends at Herald, Property editor and Gibson is with us
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  Speaker 2: to discuss what can be done to get developers moving
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  Speaker 2: on empty spaces, some that have been desolate for decades.
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  Speaker 2: First off, there are several high profile vacant sites in Auckland.
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  Speaker 2: Can you walk me through? I guess how many there
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  Speaker 2: are and maybe a couple of those ones that interest
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  Speaker 2: you the most.
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  Speaker 1: Well, good question for me. I've become so innuent to
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  Speaker 1: vacant sites that I don't even see them as vacant anymore.
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  Speaker 1: They're just part of the streetscape. But I think the
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  Speaker 1: one that is most concerning is nearly a half heck
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  Speaker 1: to you, and it's the old food Alley and Yates site.
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  Speaker 1: So this is in between Albert Street, Wolf Street and
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  Speaker 1: kind of the start of Fanchial Street, and it's right
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  Speaker 1: opposite the billion dollar commercial way. Can you believe prime
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  Speaker 1: real estate?
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  Speaker 2: You would have thought it's.
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  Speaker 1: Owned by the comm family of Singapore. Now they got
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  Speaker 1: Ward demolition in twenty twenty two and twenty three to
• 2:28
  Speaker 1: knock down what they called the Pigeon Palace, which some
• 2:30
  Speaker 1: people in Auckland would have called the Food Alley the
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  Speaker 1: Yates building. Now, can you believe it's not even a
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  Speaker 1: car park? Right?
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  Speaker 2: So what is that? They've just got fences up for you.
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  Speaker 1: I've got fences up with barboir on top.
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  Speaker 2: And do they need to do anything with that site?
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  Speaker 1: Well, that's a block from the waterfront. The com family
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  Speaker 1: who owned the Hilton Hotel down on Princess Wharf. They
• 2:51
  Speaker 1: don't feel any impetus to do anything there, although Peter Ball,
• 2:54
  Speaker 1: who works with the Comms, talked about being optimistic about
• 2:58
  Speaker 1: projects on that site to me last year, but he
• 3:02
  Speaker 1: also talked about it as being a post COVID challenge.
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  Speaker 3: Now.
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  Speaker 1: The second one that I think is well known is
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  Speaker 1: the old Auckland Star site in between Shortland Street and
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  Speaker 1: Fort Street that has been vacant for I think thirty
• 3:18
  Speaker 1: six years. And the third one, very high profile, is
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  Speaker 1: what's known in the property sector, although I don't know
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  Speaker 1: if other people call it, this is the Royal International
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  Speaker 1: Hotel site. Now. This is below Albert Street, just right
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  Speaker 1: beneath the new train station there, and it had a
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  Speaker 1: reverse bungee jump on it for years. But as I
• 3:40
  Speaker 1: say in the story, even the reverse bungee jump people left.
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  Speaker 1: That is a car park, so it does have some use.
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  Speaker 1: Right beside the Attrium an Alia just at the back
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  Speaker 1: of Westmith and Coe's used to be. So these are
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  Speaker 1: all really central city important sites, and these are berg sites.
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  Speaker 1: And those two last ones that I've referred to have
• 3:59
  Speaker 1: been vacant plots of land for nearly forty years. Nobody
• 4:03
  Speaker 1: talks about them, Nobody asks the questions, why is that
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  Speaker 1: like that? These are like gaps in the teeth of
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  Speaker 1: perfect mouth, you know what I mean. You can say
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  Speaker 1: Auckland's not perfect. It's an evolving city. And some people say,
• 4:16
  Speaker 1: don't worry about the empty sites. Look at those, and
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  Speaker 1: I think, what a lost opportunity.
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  Speaker 2: It seemed like there was a time when you'd look
• 4:24
  Speaker 2: at the Auckland skyline and you'd see, you know, dozens
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  Speaker 2: of cranes and things like that, and now you kind
• 4:32
  Speaker 2: of drive into the sea, you don't see many at all.
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  Speaker 2: Do you do you feel the same?
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  Speaker 1: I couldn't believe it. Driving over the Harbor Bridge, thinking
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  Speaker 1: about making this with you today, I looked specifically now.
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  Speaker 1: The one crane I did see is the China Construction
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  Speaker 1: crane on the side of Seascape, the huge new apartment
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  Speaker 1: building downtown which Icon has taken over from China Construction finishing.
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  Speaker 1: That there's a crane there. But you're right, the cranes
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  Speaker 1: have vanished, and you know, this is really a sign
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  Speaker 1: of the recession. This is the downturn. This is the
• 5:06
  Speaker 1: developers not having the confidence to go ahead and build.
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  Speaker 1: There are a few other cranes on the skyline, like
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  Speaker 1: Pompealia on Pontsamby they've got a towel crane CMP Constructions
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  Speaker 1: working there, but generally no, there are no on the
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  Speaker 1: skull line anymore. And I also hear people say, well.
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  Speaker 3: Hold on, foreigners are going to come in here, they're.
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  Speaker 2: Going to buy up New Zealand and they're going to
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  Speaker 2: leave and it's going to be ghost town galore.
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  Speaker 3: Look, there's always solutions. Yeah, you know, you could do it.
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  Speaker 3: Have a vacancy tax if a home was vacant for
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  Speaker 3: more than six months a year, charge commercial council rates.
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  Speaker 3: You know in Wellington that three point seven times higher
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  Speaker 3: the residential rates.
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  Speaker 2: In Auckland that's two point five times higher than residential rates.
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  Speaker 3: Yeah.
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  Speaker 2: Right, So plenty of ways. It's going to cat where
• 5:51
  Speaker 2: you could get some more deuce out of the lemon
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  Speaker 2: potentially there. What are some of the main reasons why
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  Speaker 2: these developers are sitting on these vacant sites, whether it
• 6:02
  Speaker 2: be years or like you said, decades.
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  Speaker 1: Well, I think the main reason is the foreign I mean,
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  Speaker 1: I'm not against foreign investment, but they don't have any
• 6:10
  Speaker 1: buy into Auckland. They live in Singapore and they live
• 6:14
  Speaker 1: in China. Now have they land banked those sites?
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  Speaker 2: I don't really know.
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  Speaker 1: It's impossible too, very hard, bit of a spectrum to
• 6:23
  Speaker 1: engage with them unless they have a local consultant. Very
• 6:27
  Speaker 1: hard to know what they're thinking, is, what their reasoning
• 6:31
  Speaker 1: is and what can be done about it. And I
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  Speaker 1: talked to Shane Brearley from Simplicity Living last night about this,
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  Speaker 1: and he said, Anne, tax them, tax them up to
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  Speaker 1: ten percent per annum per year of the value of
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  Speaker 1: their site. Give them a couple of years advance, warning
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  Speaker 1: you going to do it, and then you see some action.
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  Speaker 2: I remember when I lived in Christchurch actually, and we
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  Speaker 2: spoke about this this morning. A the Dirty thirty. So
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  Speaker 2: the council basically decided to publicly shame at least thirty
• 7:00
  Speaker 2: either derelict or abandoned lots in the central city in
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  Speaker 2: christ Church. This would have been maybe ten years ago,
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  Speaker 2: maybe twenty seventeen. Say esh, I think you may have
• 7:12
  Speaker 2: incentivized a couple of them and then raised rates, or
• 7:17
  Speaker 2: that they threatened to raise rates as well. But they
• 7:20
  Speaker 2: did other things like helping developers navigate consent processes for example,
• 7:26
  Speaker 2: or offer those incentives or even the public shame part
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  Speaker 2: of it got a couple of them moving.
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  Speaker 3: So there are.
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  Speaker 2: Different ways to try and get developers to actually do
• 7:36
  Speaker 2: some work.
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  Speaker 1: Okay, well that's a really good point. You know, I've
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  Speaker 1: talked about a punishment at Detrent for them leaving the
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  Speaker 1: sites vacant. But that's a good point you make about
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  Speaker 1: the encouragement, so the carrot rather than the stick. And
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  Speaker 1: what Shane Brawley also told me about last night is
• 7:54
  Speaker 1: when he was working for a big Australian developer here
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  Speaker 1: and they were developing the Key West apartments on Albert Street.
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  Speaker 1: There were a two pronged incentive attack you told me
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  Speaker 1: under the Mayor Les Mills. Now, what they got as
• 8:08
  Speaker 1: developers was basically a rebate on rates, so rates were
• 8:13
  Speaker 1: suspended for a period of time, plus development contributions were suspended.
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  Speaker 1: This was an act of financial incentive and encouragement for
• 8:23
  Speaker 1: developers to build. I mean there are a lot you
• 8:26
  Speaker 1: could say that, having the Auckland Unitary Plan, having no
• 8:30
  Speaker 1: height limit in the CBD, obviously having to honor view shafts,
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  Speaker 1: as my colleague Simon Wilson has been writing about recently,
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  Speaker 1: but having no height limit is an incentive. But you know,
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  Speaker 1: at the moment, developers just can't sell apartment buildings off
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  Speaker 1: the plans. So apartments were a big part of the
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  Speaker 1: redevelopment and the regeneration of the Auckland CBD, and those
• 8:53
  Speaker 1: have stopped, and even the ones that are developed, like
• 8:57
  Speaker 1: I've been talking to John Love at the CAAB, the
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  Speaker 1: former Civic Administration building, and he's still got twenty, he
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  Speaker 1: tells me, out of one hundred and fourteen to sell.
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  Speaker 1: Now that project was finished some time ago, and that's
• 9:08
  Speaker 1: a very beautiful building. John Love has done an extraordinary
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  Speaker 1: job there. Those apartments are very attractive and he's still
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  Speaker 1: got twenty to sell.
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  Speaker 2: Why are developers choosing the outer suburbs. I suppose you're
• 9:25
  Speaker 2: Ponts and bees your new markets to develop apartment living.
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  Speaker 1: That's where people want to live. That's the really sad thing.
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  Speaker 1: When I talked to the developer Shane Braley yesterday, he said, Anne,
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  Speaker 1: I don't want to come into the CBD anymore. So
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  Speaker 1: where are they going. They're building a North Kit and
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  Speaker 1: they're building a line level building on former Calma order
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  Speaker 1: land over there. They're building in Remuera they're building in Allislie,
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  Speaker 1: They're building in mornings Are they building all over not
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  Speaker 1: in the CBD. Now, Precinct Properties is another example. They're
• 9:58
  Speaker 1: building in Carlton Gore Road in Newmarket. They've got a
• 10:02
  Speaker 1: really big site of all places, our premiere office developer.
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  Speaker 1: They're building in Dominion Road and Mount Eden. Now, when
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  Speaker 1: that starts happening, I begin to think there's been some
• 10:13
  Speaker 1: big shift happen here. People are not building in the
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  Speaker 1: CBD anymore. Why just where people want to live. They
• 10:20
  Speaker 1: know they can pre sell in those suburbs.
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  Speaker 2: When you look at somewhere like Queen Street, right, and
• 10:33
  Speaker 2: we've been speaking about revitalizing Queen Street for some time,
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  Speaker 2: for years in fact, but in terms of businesses on
• 10:41
  Speaker 2: Queen Street, businesses need people, but people don't go to
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  Speaker 2: Queen Street because there's no businesses. Well, there are some,
• 10:50
  Speaker 2: but it has the vibrant sea has been lost. I
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  Speaker 2: think that's fair to say, hey.
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  Speaker 1: Well, it's terrible to think of Smith and Corey's shutting.
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  Speaker 1: I mean that was such an anchor for the midtown.
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  Speaker 1: A really large development site across the road on Queen Street,
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  Speaker 1: the Saint James Sweets where there was a four hundred
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  Speaker 1: million dollar apartment project planned. Chinese are now selling that site.
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  Speaker 1: Good luck to them. This is a really bad market
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  Speaker 1: to be quitting a site like that. And now that
• 11:18
  Speaker 1: was to be right beside the Saint James Theater. Saint
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  Speaker 1: James Theatre sitting there partly wrecked. Where's that going?
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  Speaker 2: You know?
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  Speaker 1: I mean, so many holes in our CBD, so many opportunities,
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  Speaker 1: but such a lack of movement, and to a large extent,
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  Speaker 1: it's really COVID. And it's also the economic downturn at moment.
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  Speaker 1: So things may change.
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  Speaker 2: And is it things? Is it hard to get consents
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  Speaker 2: and funding for things or is it just literally a
• 11:46
  Speaker 2: vibe check.
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  Speaker 1: We're not going to apply for consent if you know
• 11:50
  Speaker 1: you can't pre sell them. So to get the funding,
• 11:52
  Speaker 1: you need the pre sales to get the ten percent deposits,
• 11:55
  Speaker 1: to go to the bank and say give us the
• 11:57
  Speaker 1: top up. And if the pre sales are not there,
• 12:00
  Speaker 1: which they're not, you know, this is just a sign
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  Speaker 1: of people are not selling their houses and moving to apartments,
• 12:07
  Speaker 1: People are not buying apartments, people fair job losses. This
• 12:10
  Speaker 1: is the economic downturn in gorm reality. It's a very
• 12:14
  Speaker 1: good point you've just made Look at the skyline. Where
• 12:17
  Speaker 1: do the cranes go? Where are they in storage yards?
• 12:21
  Speaker 1: Stacked up in little bits like lego sets? Is the answer.
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  Speaker 1: That's where they went.
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  Speaker 2: That's a good vestor that's sad, that's really sad.
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  Speaker 1: It's terrible because I mean, well, so you know, you say, well,
• 12:33
  Speaker 1: do we need the city to be changing. There's a
• 12:34
  Speaker 1: really good University of Auckland paper that I was looking
• 12:37
  Speaker 1: at which sort of encouraged more acceptance of the dynamic
• 12:41
  Speaker 1: or even non dynamic shape of Auckland CBD, and it
• 12:44
  Speaker 1: sort of said, look, it's always evolving, just accepted as
• 12:47
  Speaker 1: it is. And I kind of like that more optimistic
• 12:50
  Speaker 1: sort of to say it'll be fine, it'll work out
• 12:53
  Speaker 1: fine in the end. It's just that we've gone from
• 12:56
  Speaker 1: a period of extraordinarily intense development and a lot of
• 13:01
  Speaker 1: developers to crol for the clean out of Albert Street.
• 13:04
  Speaker 1: But you know, I have been down the Tibayhoo two
• 13:06
  Speaker 1: station and I have to say it's very, very beautiful.
• 13:10
  Speaker 1: So if there's going to be a revitalization, maybe it's
• 13:13
  Speaker 1: that big transport project, and maybe it's the beautiful new
• 13:16
  Speaker 1: train stations you've got to go there to look at.
• 13:18
  Speaker 3: The After COVID, it kind of went a bit downhill
• 13:24
  Speaker 3: in terms of the city center and you know, the
• 13:27
  Speaker 3: shops not being as busy.
• 13:29
  Speaker 1: Traffic is horrendous.
• 13:31
  Speaker 3: Auckland transport has slowed traffic down, so it makes it
• 13:34
  Speaker 3: harder to get anywhere in the city. Too many speed bumps.
• 13:38
  Speaker 3: We need basically more events in the city and more
• 13:42
  Speaker 3: reason to come into the city because you know, parking cerebral,
• 13:47
  Speaker 3: traffic cerebral. You have to go three one way straight
• 13:50
  Speaker 3: to even get anywhere.
• 13:54
  Speaker 2: In terms of Auckland, is it a dying city? Because
• 13:59
  Speaker 2: I know that we like to compare ourselves to other
• 14:02
  Speaker 2: metropolitan centers around the world, and the prices absolutely reflect
• 14:09
  Speaker 2: that as well, if I'm going to be honest, in
• 14:10
  Speaker 2: terms of rent, house prices, cost of food, et cetera,
• 14:14
  Speaker 2: cost of living. Rather in terms of Auckland and it
• 14:19
  Speaker 2: being the country's largest city. A third of us live
• 14:24
  Speaker 2: in Auckland and it contributes what about forty percent GDP
• 14:29
  Speaker 2: to the rest of the country. Does Auckland get the
• 14:32
  Speaker 2: respect it deserves? Do you think?
• 14:34
  Speaker 3: Well?
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  Speaker 1: There was that Committee for Auckland report which came out
• 14:38
  Speaker 1: just recently, which talked about how far Auckland had fallen behind,
• 14:42
  Speaker 1: and I found that really concerning in terms of respect.
• 14:45
  Speaker 1: You know, all the relatives in the mainland hate the
• 14:48
  Speaker 1: Auckland is right, you know, they give me stick when
• 14:51
  Speaker 1: I go down there, and it's like a badge of dishonour,
• 14:54
  Speaker 1: isn't it. She's from Auckland. Really okay? But I think
• 15:00
  Speaker 1: that that is a big city sentiment that's reflected in
• 15:03
  Speaker 1: every country, whether it be London or Paris, or Berlin
• 15:08
  Speaker 1: or Sydney. It's just the way it.
• 15:10
  Speaker 3: Is, right.
• 15:11
  Speaker 2: Well, I read in the Deloitte report. Actually they did
• 15:14
  Speaker 2: a state of the City report for Auckland which compares
• 15:17
  Speaker 2: Auckland with other global s around the world. And it's
• 15:20
  Speaker 2: funny you bring up Paris because Paris generates this is
• 15:23
  Speaker 2: a quote from the report thirty one percent of France's
• 15:27
  Speaker 2: GDP and gets treated accordingly, which I thought was that
• 15:33
  Speaker 2: stuck out to me because do you think Auckland gets
• 15:35
  Speaker 2: treated accordingly?
• 15:38
  Speaker 1: Very interesting, very interesting comparison. I remember Grant Robertson at
• 15:44
  Speaker 1: one of the I think it was the Infrastructure of
• 15:46
  Speaker 1: the Auckland Project events, and he was saying how difficult
• 15:50
  Speaker 1: it is when he was Finance minister to live in
• 15:53
  Speaker 1: a city that's being redeveloped. And we know that the
• 15:55
  Speaker 1: mayor has the War on Cones, so we know that
• 15:59
  Speaker 1: development has its price and makes it very inconvenient for people.
• 16:03
  Speaker 1: It's just that when development stops you sort of sit
• 16:05
  Speaker 1: there and look at it and think, right, what's going on.
• 16:08
  Speaker 1: I'm sure that development will come back. Auckland is a
• 16:12
  Speaker 1: huge generator of wealth. It has so many of the
• 16:15
  Speaker 1: growing financial services and the other spects to New Zealand's
• 16:20
  Speaker 1: economy that is so important. Fon Terra's headquarters is down
• 16:23
  Speaker 1: on Vanchul Street. I mean, you know, what is it
• 16:25
  Speaker 1: an export lead recovery. So it's a really good question
• 16:29
  Speaker 1: to ask about the role that Auckland plays in terms
• 16:33
  Speaker 1: of New Zealander. The rural growth we know at the
• 16:36
  Speaker 1: moment is coming from the agricultural sector, and a lot
• 16:39
  Speaker 1: of people who work in services have fears about job
• 16:42
  Speaker 1: loss and unemployment. Has you know, that's been something that
• 16:46
  Speaker 1: is a real issue now. You can only hope that
• 16:50
  Speaker 1: for Auckland's sake, that that dynamic nature of the city
• 16:54
  Speaker 1: continues and the developers will return. We need good shops,
• 16:58
  Speaker 1: we need good offices, We need good hotels and apartment buildings,
• 17:03
  Speaker 1: we need really good infrastructure, and I would say that's
• 17:07
  Speaker 1: one aspect of Auckland that hasn't had the attention it deserved.
• 17:11
  Speaker 1: I remember someone from Auckland Transport telling me years ago
• 17:15
  Speaker 1: that in nineteen fifty nine people said, why do we
• 17:17
  Speaker 1: need to harbor Bridge? This only Strawberry Fields on the
• 17:20
  Speaker 1: north shore. Lack of vision, right, And many people are
• 17:23
  Speaker 1: critical of the City rail Link, and I think they
• 17:26
  Speaker 1: really don't understand the difference that City rail Link is
• 17:29
  Speaker 1: going to make to Auckland. And I hope with that
• 17:32
  Speaker 1: movement and easy movement of people around the CBD that
• 17:38
  Speaker 1: we do see some change. There's a proposal for the
• 17:41
  Speaker 1: Symphony Center, like multi million dollar project of offices and
• 17:47
  Speaker 1: apartments right above the teawater y hodd A two station
• 17:51
  Speaker 1: on the old Bledislow car Park, the Auckland Council car
• 17:54
  Speaker 1: Park site. So you know, let's hope that those developers
• 17:59
  Speaker 1: are finding in the market the ambition and the drive
• 18:03
  Speaker 1: and the determination of businesses to commit and people to
• 18:06
  Speaker 1: buy apartments. Otherwise that scheme will not go ahead.
• 18:10
  Speaker 2: And in the meantime we should tax them if they
• 18:11
  Speaker 2: don't do anything.
• 18:12
  Speaker 3: With their land.
• 18:14
  Speaker 1: It's quite a controversial idea, isn't it.
• 18:17
  Speaker 2: Thanks for joining us, An. That's it for this episode
• 18:24
  Speaker 2: of the Front Page. You can read more about today's
• 18:27
  Speaker 2: stories and extensive news coverage at enzidherld dot co dot MZ.
• 18:32
  Speaker 2: The Front Page is produced by Ethan Sills and Richard Martin,
• 18:36
  Speaker 2: who is also our editor. I'm Chelsea Daniels. Subscribe to
• 18:41
  Speaker 2: the Front Page on iHeartRadio or wherever you get your podcasts,
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  Speaker 2: and tune in tomorrow for another look behind the headlines.