Warehouse Newmarket on the market

5:00 AM Saturday March 11, 2017 Colin Taylor

The big Warehouse store in Newmarket is up for sale. Photo / Supplied

A huge and prominent Auckland city fringe redevelopment site has become fully available to the market following a decision by The Warehouse Group to sell its Newmarket property.

The 1.4ha site comprises six separate titles at 66-80 Broadway and 11-15 Railway St which are home to The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7 and some smaller retail tenants.

“The sale will allow for the development of a transformational new mixed-use complex in line with Auckland growth strategies,” says Peter Herdson, capital markets national director of Colliers International who, with director John Green, is marketing the Newmarket site for sale by deadline private treaty offers closing on Thursday, April 20.

Warehouse Group Property General Manager Fiona Shilton says the company has occupied the site since 1993 and now is the right time to offer it for redevelopment.

“With Auckland’s unprecedented period of growth and rising land values it is clear that large format retail use is simply not the best value for the site,” she says.

“Newmarket is a sought-after location and works really well for smaller format stores, offices and residential developments but becomes less viable for larger format stores.”

The decision to leave Newmarket had been difficult for The Warehouse Group, and the company had explored several options for the property, including ways of partnering with a developer to remain on the site.

However, Shilton confirmed the site was now more suited to a mix of small format retail, residential and office development.

“Worldwide, the economics of large format retailers in CBD locations are unattractive,” she says.

Herdson says this sale represents an exciting redevelopment opportunity in the heart of Newmarket that will be attractive to a variety of parties.

“We believe a development here will help to transform Auckland into a world-class city,” he says.

“Demand for large, developable, mixed-use sites in this popular location are immense. The Warehouse believes opening up the Newmarket site to new uses is the right thing to do for Auckland’s future.”

The Warehouse Group will continue to occupy the Newmarket site on a short-term lease allowing a new owner to finalise development plans while receiving a holding income.

Shilton says the Warehouse is confident it can continue to service its Newmarket customers well.

“We’re already seeing people in that area shopping at Sylvia Park or Royal Oak and others are increasingly making use of our online store and our click-and-collect options,” she says.

“The wide variety of options and changing shopping habits should give customers assurance that they can still have their needs met.”

The properties are in the sought after ‘metropolitan centre’ zone in the Unitary Plan. Resource consent for a 47,914sq m residential, retail and office development was granted in 2014, Herdson says.

True Commercial - Warehouse Newmarket - area for sale within red border - aerial .jpg

An aerial view depicting the Newmarket property for sale within a red border. Photo / Supplied

The proposed development plan includes a 160-unit apartment block, 40-room hotel, 9615sq m of office, 18,245sq m of retail and 720 carparks. “However, further development potential is possible,” he says.

Green says a mixed use residential, retail, retirement and hotel complex would be ideally positioned close to public transport, premium shopping options, leisure and entertainment amenities, and within the double Grammar school zone.

“It is close to the Newmarket train station, which will double in capacity once the City Rail Link is completed. The suburb is also covered by many of the major bus routes,” he says.

“The site is directly opposite the Newmarket pools and cinema complex, and a short stroll from the Domain and Newmarket Park.

“Newmarket is well-served by premium retail offerings, including the 277 shopping centre and supermarket, as well as great cafes and bars,” says Green.

Herdson says the property has street frontage to both Railway Ave and the highly sought-after Broadway retail strip which carries over 40,000 vehicles a day.

“The property comprises 8330sq m of retail space across two buildings and 2100sq m of office space as well as car parking.

A new development with a retail component would also be supported by both guests and immediate residents within the complex and nearby residential catchments, as well as those in neighbouring Parnell, Remuera, Grafton, Epsom and Mt Eden which are among the most affluent suburbs in the country.”

The building at 66 Broadway was constructed around 1992 and is accessed from both Broadway and Leek Street. The main level is below the Broadway street level and is occupied by The Warehouse The main building at 80 Broadway was constructed around 1993 and a two-level parking structure adjoining to the south was constructed about two years later.

The two storey building at 11-15 Railway Street was built around 1984 Under the consented development, the commercial and residential components have been designed so that each may be constructed independently enabling construction in two stages.

The property is zoned `Metropolitan Centre’ under the Auckland Unitary Plan with the zoning designed to allow the development of urban areas with a diverse mix of activities including residences, offices, retail outlets, entertainment facilities, educational and community services, restaurants and cafes.

Green says Auckland Council is promoting work, living and entertainment areas close to each other in order to help reduce Auckland city traffic.

“Good public transport is an integral part of this policy goal and Newmarket is home to the busiest section of rail track in Auckland, with 368 trains carrying 21,800 people over the crossing every week day,” he says. “Located only two and a half kilometres from the Auckland CBD, Newmarket also has regular bus services.”

“Among the well-known national and international brands that have selected Newmarket as the base for their flagship stores are fashion retailers Witchery, Country Road, French Connection, Stolen Girlfriend’s Club and Adidas. Large Australian brands that have their sole New Zealand stores in the precinct, include Alannah Hill, Gorman and Nicola Waite.

“Many large corporates also have their headquarters in Newmarket, including 2degrees, Vector, Watercare, Fidelity Life, Scentre Group, Griffins, Roche, Tegel NZ and Arnott’s.”

Green says there are over 1900 business locations in Newmarket – with a mix of professional, retail as well as financial and insurance-based companies.

“Another significant development for the area is the construction of the University of Auckland's Newmarket campus on the 5.2ha former Lion Brewery site. The university’s redevelopment of the site over the next decade will be a significant catalyst to the further enhancement of Newmarket.”

The marketing of the Newmarket site follows Colliers International’s successful sale and leaseback of several other properties around the country owned by The Warehouse in recent years.

Newmarket is a well-established business centre with Newmarket Business Association figures showing over 15,000 employees working in the suburb, as well as double-digit percentage resident population growth year-on-year.

True Commercial - Peter Herdson%252c Colliers.jpg True Commercial - John Green%252c Colliers International.jpg

Peter Herdson and John Green of Colliers International