CBD parking has future upside
The Federal Street Car Park offers an opportunity to acquire a standalone car parking building in the heart of Auckland’s CBD. It will be sold by Colliers International, on behalf of Skycity Entertainment Group, by deadline private treaty closing at 4pm on April 4, unless sold earlier.
A minute’s walk from Skycity Auckland and two blocks from Queen St, the property comprises a purposebuilt, 11,487sq m car parking building with 427 spaces over seven levels.
The building is on a substantial 1641sq m freehold site with Business City Centre zoning, which allows for the highest density of mixed use development under the Auckland Unitary Plan.
Skycity has owned the property since 2004, but new parking facilities in the nearby New Zealand International Convention Centre (NZICC) have made it surplus to requirements.
Colliers International Capital Markets Director Jason Seymour, who is marketing the property with National Director Peter Herdson, says it is being sold with vacant possession.
“Investors, developers and land bankers will not want to overlook this property’s superb location or the immediate opportunity to redevelop, release or reposition,” he says.
“Located in the heart of Auckland CBD’s growing entertainment precinct — anchored by Skycity Auckland, New Zealand’s leading entertainment destination — the property is surrounded by numerous restaurants, eateries, theatres, hotels and conference venues.
“It offers exceptional proximity to CBD offices, apartments and transport links, as well as two of Auckland’s most important development projects — the NZICC and the City Rail Link’s Aotea Station, both of which are under construction nearby.”
Seymour says the increasing rarity of standalone parking buildings in the CBD makes it a compelling investment. “Construction of these buildings almost completely stopped in the 1990s, despite rapid growth in the number of employees and residents.
“Since then, the Unitary Plan has capped the overall number of new CBD parking spaces and effectively halted the development of new standalone parking buildings.
“Constrained supply and increasing demand have led to significant price inflation, with daily casual parking rates increasing by 164 per cent since 2008.”
Herdson says investors have the opportunity to create substantial value by repositioning the existing Federal Street Car Park building.
Alternatively, developers and land bankers can draw on a robust holding income while they plan to unlock the site’s future potential.
“The site’s generous zoning, which allows for much greater density than the existing building, means it could readily be redeveloped for commercial, hotel or residential use in the long term,” he says.
Herdson says the property is conveniently located on the corner of Federal and Kingston streets, allowing access from both Hobson St and Victoria St West. “It has good proximity to motorway interchanges, public transport hubs, the waterfront, and the growing western CBD.”
Herdson says New Zealand’s ongoing tourism boom and the $703 million NZICC and Hobson Street Hotel investment make the property particularly appealing as a future hotel redevelopment site.
“As New Zealand’s main international gateway, Auckland boasts one of the strongest hotel markets in Asia Pacific. The NZICC will further increase demand for rooms.”
The 32,000sq m centre — five times larger than Auckland’s largest existing convention venue — will be capable of hosting international conventions for 3000 people and one-off events for some 4000 people.
Skycity’s Group CEO Graeme Stephens says the NZICC is expected to attract around 33,000 international delegates a year to Auckland.
“The NZICC will be a landmark and iconic building for Auckland and New Zealand, and is expected to be a significant demand driver for our Auckland precinct,” he says.
As part of the NZICC development, Skycity is also constructing a new 5-star, 300-room hotel on Hobson St.
Stephens says the hotel will be integrated with the wider SKYCITY Auckland precinct, including a pedestrian laneway with retail, food and beverage offerings, which will complement the world-class Federal Street dining offerings.
“The Hobson Street Hotel and new retail laneway will provide much needed tourism and hospitality infrastructure for Auckland and will complement the NZICC and our broader Auckland business.”
The Federal Street Car Park building has resource consent for 317 longstay and commuter car parks and 118 short-term visitor spaces. Built in 1983 and expanded in 2000, the building is of predominantly steel and reinforced concrete construction in a split floor layout.