AMP gets its tower off the mark first

By Campbell McIlroy

Friday 19th May 2000

SPACEY: The triangular floor plates will deliver more lettable area per floor than any high-rise building in New Zealand

AMP NZ Office Trust's new PricewaterhouseCoopers Tower will have no adverse effects on AMP's own office stock but will make some older buildings in Auckland's CBD obsolete.

That is the view of the trust's executive manager, Anthony Beverley. "It was inevitable that a new tower was going to be built and we wanted it to be ours."

Construction began on the new 30,000sq m Stephenson and Turner-designed office tower on Monday.

Modelled on PWC's Sydney office in Darling Park, the 31-level, $171 million office building has three confirmed tenants taking up 12 of the 23 levels of office space.

PWC will reduce by 20% the 10,500sq m of office space it occupies over six floors of the ANZ Tower on Albert St and four floors in the PWC Centre on Wyndham St when it moves into floors 20 - 25.

The 8100sq m of space it will occupy represents an average of 13sq m a person, down from 17sq m a person.

Law firm Buddle Findlay will average 18sq m a person when it takes up floors 17-19, leaving six-and-a-half floors vacant in the Telstra Business Centre on Queen St.

The ANZ has also signed up for three floors on levels 9, 10 and 11 but has yet to decide the future of its offices in Brookfield House on Victoria St West, the ASB Bank Centre on Albert St, 277 Broadway, and ANZ Bank House on Queen St.

AMP has negotiated an option for ANZ to take up space left over by PWC in the ANZ tower or to place it in the new Quay St tower, depending on demand for space.

Mr Beverley said AMP was negotiating with another potential tenant for a further two floors, and was in talks with up to half a dozen multi-floor tenants. Inquiries had come from tenants across the board including banks, agents and brokers, he said.

Set on a two-storey podium facing Quay St, the building includes 358 carparks, plus retail space at ground and plaza level.

Office accommodation is provided on levels seven to 29, with the tower itself occupying only 33% of the site area.

The triangular floor plates deliver a massive 1352sq m of net lettable area, more than any high-rise office tower in New Zealand, with rents averaging around $350 a sq m.

Mr Beverley conceded that once the new tower was completed in May 2002, it would be a struggle to sell office space.

But there had been a strong response from tenant groups and the trust had been working on the project for 12- 18 months, so the new development should come as no surprise, he said.

Property Council of New Zealand figures showed a 14.34% vacancy rate at the end of last year, representing a total of 143,200sq m.

Colliers Jardine put the figure at 14% at the end of the March quarter.

Head of consultancy, research and valuation Alan McMahon said the new tower would probably push CBD vacancy levels up to 17% by the end of 2002.

Overall vacancy levels would increase substantially for the lower end of the market but would pose no problem for top-grade space which was still at a premium.

Vacancy levels and the quality of product available in the Auckland market, including the Royal & SunAlliance Centre which still has eight floors to let, have made it a great time to be a tenant looking for space.

A large number of long-term leases signed in the late 1980s are due to expire in the second half of this year.

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