COMMERCIAL REAL ESTATE with Andrew Hiskens of Colliers North Shore

Looking back, moving forwards

This month, Colliers International celebrated its tenth birthday on the North Shore. Flowers, speeches, balloons, champagne - it was a great birthday party.

However, once the effects of the champagne had worn off, I started to think about how the commercial property market on the North Shore has changed over the decade - and what lies ahead. Ten years seems both a long time – particularly when I consider where we started from and how much we have achieved – and the blink of an eye, in terms of the development of North Shore and the wider city in which we live.

A decade ago, I was setting out by myself to create this commercial property business in Takapuna, which has now grown into a stable and highly successful team of 16 able people. We grew from a beachfront house office to our current commercial premises on Hurstmere Road, which today provides a professional work environment and high quality auction facilities.

Franchise of the year. It was fantastic news for us that at the same time as we celebrated this major milestone in our existence, we also won the prestigious Franchise of the Year accolade at Colliers International NZ’s awards. We have been recognised as the clear market leaders in the industrial and office sectors in our region, consistently winning appointments to dispose of large assets on the Shore, including some of the biggest leases and sales in the past 10 years, such as 3M Wairau Road, 51-55 Hurstmere Road and the Arrenway Drive subdivision. But enough about us.

What’s changed on the Shore? If you’re looking for new office buildings in Takapuna over the last ten years, you’ll be disappointed. A notable feature of the city’s commercial landscape has been the lack of new buildings put up over the past few years.

Instead, the layout of the North Shore has changed, with the spread of separate, fragmented villages creating a growing and disparate suburban office market. Demand for work space close to home has spawned the intensive development of office parks around fringe areas, which has impacted on central commercial areas like Takapuna and Albany.

However, there are signs that as more high quality office product becomes available in Takapuna and Albany, there will be a move back into that environment. This should increase along with efforts to intensify the city to avoid urban sprawl.

Ultimately, the market today is all about prime availability. Demand is driving future projects, as it should. With demand growing from owner occupiers for smaller scale, but high quality, office environments in Takapuna, we could see a new centre emerge.

Smales Farm growing strongly. One example of how to attract office occupiers is evidenced by the quality covenants collected at Smales Farm including Government agencies, call centres and IT-based businesses that have flocked to the 10.8ha Smales Farm Technology Park between Takapuna and the Northern Motorway.

Fully let since the start of 2010, Smales Farm is just the sort of high quality campus-style environment that businesses are keen to occupy.

The park’s owners plan to offer employment opportunities for 8000 workers across a total development of approximately 110,000sqm when fully developed over the next 10 years. It will contribute more than $700 million to the North Shore economy each year and influence the creation of a further 35,000 jobs elsewhere in the region and beyond. Not to mention their acquisition of more strategic property outside the park.

Campus popularity set to grow. Campus business precincts are increasing in popularity all over the shore. For example, we have only seen the start of Albany becoming more of a campus, with a noticeable driver in the sports science management industry – including AUT and the Millennium Institute of Sport & Health.

They will be joined over the next few years by the planned National Aquatic Centre. With more champion sailors coming from the North Shore than anywhere else, a major driver going forward will be the growth of the region as a sporting hub. This will of course require high quality facilities and people.

This growth is all about catchment and cost-effective management. The burgeoning trend to link businesses with higher education that we have been seeing in our leasing is likely to develop further over time.

Old buildings, new uses. It’s not all about future plans and split-new buildings though.

We are also seeing the successful re-engineering of industrial buildings to service retail, such as on Porana Road and Wairau Road. This has been great for the area because it has provided an increase in capital values for building owners plus higher and better use of the property – not to mention better services for the community.

A united plan. Going forward, one of the benefits of being part of a greater Auckland is the lack of a fragmented, village approach. We are already seeing a united view as to how Takapuna will evolve as part of the ‘Auckland Unleashed’ blueprint recently unveiled by Len Brown, who is at pains to improve connectivity between the North Shore and the rest of Auckland. The better we do this, the more opportunities that national and international companies will see in our area.

Against this backdrop, the Takapuna Business Association has big plans to unite occupiers, tenants and owners to drive a more effective retail hub. Their work is underway now, and the networking and planning has begun.

Takapuna future. A wide future opens up in front of us. There are many exciting projects in the pipeline which, if they eventuate over the next few years, will help galvanise Takapuna as the leading commercial hub of the Shore again.

And, ten years down the line from our starting point on the Shore, we at Colliers International are better connected than ever with the local business community and local government, working hard to keep our clients connected with marketplace and the many opportunities that lie ahead.