Study says landmark buildings boost business
John Drake is famous for Tirau’s corrugated-iron sheep’s head building, and many others. Photo / Supplied
The construction of “landmark” commercial premises throughout New Zealand acts as a catalyst for the building and refurbishing of adjacent properties, according to new property research.
Analysis by Bayleys Research has highlighted that being first on the block with the construction or development of landscape-changing commercial premises often leads to other buildings sprouting up around the immediate location once positive economic impacts are sustained.
Bayleys national director commercial and industrial, Ryan Johnson, says visionary property developers — either as private individuals, corporate entities, or even local bodies — reap the financial benefits of being at the bow-wave of establishing ‘landmark structures’.
“It really underpins that old cliché … ‘the early bird catches the worm’. Spotting an opportunity for bringing innovation or change to a locale has been proven to reap capital growth rewards for those investing in the commercial property sector — with landmark buildings not only changing city skylines and landscapes, but also positively invigorating surrounding economies and real estate markets,” he said.
“It’s very much a ‘domino effect’ — where an initial development investment will often stimulate additional real estate investment. Our research identified this was particularly true in the hospitality, retail, and commercial property markets.”
Wellington’s Te Papa was completed in 1998. Photo / Supplied
The Bayleys research looked at four high-profile buildings: Sky Tower in Auckland, the sheep and ram premises in the Waikato township of Tirau, Te Papa museum in Wellington, and Forsyth Barr Stadium in Dunedin.
Since its completion in 1997, Sky Tower in Auckland has attracted 15 million visitors. Among the commercial property developments which have piggybacked off the hotel, casino, tower and function venue attractions have been:
- The reconfiguration of Federal St into what is now a laneway style hospitality hub featuring a handful of bars and restaurants in premises owned and operated as individual entities by parent company SkyCity. The company has also purchased a majority interest in the AA Centre on the Federal St block, in what will be the final piece to the avenue’s property jigsaw.
- Construction of the NZ International Convention Centre (NZICC) and five-star Horizon Hotel which will both eventually be directly linked to the existing SkyCity empire. The $703m budgeted project is scheduled for completion in 2020 and will contain 32,500sq m of convention space and a five-star/303 room hotel adding to SkyCity’s existing accommodation pool.
- The 24-storey Victoria Residences tower — with nine retail units on the lower levels — directly opposite Sky Tower’s front entrance. Many of the apartments within the tower are believed to be lined up by their investor owners for short-term rentals to people attending conferences and functions at Sky City.
In 1994, Tirau resident John Drake had a ‘Field of Dreams moment’ . . . deciding to clad his wife Nancy’s wool craft store in a giant corrugated-iron sheep’s head. He built it, tourists came and, in 1998, a dog’s head was added to a building that houses the tourist information centre.
In 2005, a ram’s head was built, adding more retail space to the original site, occupied by The Merino Story, a clothes shop, and The Honey Shop cafe.
As the buildings’ fame has grown, the dog, ram and sheep-styled buildings have been cornerstone entities in helping transform the small South Waikato town of 800 people into a busy tourism stopover — maximising the benefits of its location on State Highway 1 close to Hobbiton on one of the main routes linking Auckland and the Central North Island.
Tirau now has the nickname of ‘The Corrugated-iron Capital of the World’. The multitude of adjacent food and beverage and retail businesses in the town’s main street have seen revenues enhanced by travellers stopping in the town when they may previously have passed straight through.
Dunedin’s Forsyth Barr Stadium opened in August 2011. Photo / Supplied
Bayleys’ research noted high traffic volumes generally made it more attractive to lease premises in Tirau, compared to similarly populated towns without “tourist attractions”.
In the capital, taking four years to build, and completed in 1998, Wellington’s Te Papa incorporates 80,000m of concrete — with the resulting multi-storey building spreading over 36,000sq m.
Sustaining 1500 full-time jobs, Te Papa adds $90m to the Wellington council’s GDP figures. With various exhibitions in residence over the ensuing years attracting tens of thousands of visitors, many of Wellington’s hotels have undergone refurbishments and renovations to stay current with their customer offerings.
Most recently around Te Papa, what was the Museum Art Hotel underwent a $12m renovation and has since been rebranded as QT Museum Wellington.
The hotel was spared from demolition in 1993 when it was moved across the road on rails to make way for Te Papa.
The property is owned by Australian-based company Amalgamated Holdings which has reportedly bought the neighbouring site of $10m with expectations that the QT Museum hotel will be expanded in due course.
In the south, Dunedin’s Forsyth Barr Stadium opened in August 2011. Since then the venue has hosted 1.7m visitors attending a mix of concerts, sports events, conferences and consumer shows. Dunedin City Council estimates the stadium has brought in more than $210m in economic benefits to the city.
The arena’s footprint of 31,050sq m encompasses five lounges, 21 corporate suites and 12 food and beverage outlets.
As a consequence of the stadium hosting more events, brewing giant Lion invested $6m constructing the Emerson’s brewhouse restaurant and bar a few hundred metres away from Forsyth Barr Stadium.