Capital finally fulfils its Oracle

Friday 27th July 2001

By Campbell McIlroy

Four years after Shortland Properties announced the construction of Oracle Tower in Auckland Capital Properties has finally finished leasing it.

Capital Properties (which took over Shortland in 1999) has signed up government department Linz for the last three vacant floors in Oracle Tower as well as some of the vacant ground floor retail space.

The lease, negotiated by CB Richard Ellis and Colliers Jardine, for levels 11 and 12 are for a term of nine years but the leases in level 13 and the ground floor are for a much shorter term - 18 months.

Linz will lease 4406sq m out of a total net lettable area of 9500sq m.

Combined with the lease of level 14 to Mike Henry Insurance last month for a term of six-and-a-half-years, Capital has succeeded in leasing over half the building in the past two months.

When Shortland Properties launched the development in 1997 the company said the time was right for a new tower with vacancy rates falling and an abundance of 1980s leases due to expire around 2000.

But time and market trends moved against the tower as the office market has slowly abandoned the Symonds St ridge area in favour of the Viaduct and downtown sectors, providing food for thought for those contemplating launching a new development in Auckland's oversupplied CBD market.

Capital Properties chief executive Nick Wevers said it was hard space to lease and that was why the company was so pleased with the deal.

The tower has had to compete with an abundance of space in the area vacated by IT companies such as Microsoft and Compaq.

Meanwhile the company came in for praise from shareholders at its annual meeting last Friday for the level of disclosure in its annual report.

Capital went out of its way to disclose the good and the bad in its annual report including a frank disclosure on the level of over-renting.

The company also indicated then that it was looking into developing a new building on one of its three vacant Wellington sites.

Mr Wevers said there was a shortage of opportunities for tenants requiring larger floor plates. He also said there was more demand in the middle of the market instead of the top end and the company would look at creating a product which suited tenant needs of this sector.

But Mr Wevers said the company merely floated the idea at the annual meeting and was not committed to a time frame.

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