Prime CBD sites to get office, dining makeover

The recent purchase of two sites adjoining its 87 Albert St property for a combined $58 million has allowed Auckland Real Estate Trust (ARE) to begin development of a transformative new office complex near the new Aotea CRL station and SkyCity.

A new three-level link building will connect the three properties to create 14,500sq m of A-Grade office space and dining that will integrate seamlessly with Auckland’s future core infrastructure.

JLL NZ senior director John Binning, who worked with ARE to advise on and secure the purchase of 60 Federal St and 16 Kingston St, says that Fusion’s contemporary design will be just as important as its strategic location.

“It is broadly understood that the work-life changes propelled by Covid-19 lockdowns won’t diminish the need for offices,” Binning says.

“However, our latest research shows that there is an ongoing ‘flight to quality’ trend that is seeing vacancy in prime offices actually declining, while vacancy in secondary or older offices continues to rise.

“This is because occupiers are demanding more from landlords with regards to new and modern ways of working,” says Binning.

“ARE’s investment strategy to target value-add assets that are well located with significant vacancy due to neglect or age is a sound one.

“These older offices in the CBD that are left untouched can provide opportunities for investors as many of them are suited to repositioning to deliver growth.”

Fusion is the first major A-Grade office complex to be developed around the Aotea station.

ARE’s executive chairman, Andrew Saunders, is delighted to be playing a key role in the city’s revitalisation.

“The Fusion project is another positive step in developing our portfolio with the objective of providing businesses with modern, post-Covid workspaces,” says Saunders.

“The location next to both SkyCity and the Aotea train station, which is expected to be Auckland’s busiest transport hub upon completion, continues our investment strategy executed successfully at 1 Albert St.”

The station is due for completion in late 2024. With resource consent granted and works already underway, ARE anticipates Fusion to be completed within the next 18 months at a forecast cost of around $25 million.