Argosy is developing the Mt Richmond light industrial park at the foot of Ōtāhuhu.
Head of development Marilyn Storey says international healthcare company Viatris has signed a 10-year lease for the first building and will move in early next year.
She says the tenant will have modern office space with breakout areas.
“One of the boundaries to the site is the Ōtāhuhu Mount Richmond Domain, so while it’s in an industrial area, it has a campus-like feel,” Storey explains “Most of the site is asphalt, but we’ve created a 5m landscaping strip at the base of the mountain instead of the three required by Auckland Council.
“We’ve got some landscaping on the site but, aside from the strip, there’s not a huge amount of greenery, but the open space in the Domain behind provides green views.
“A natural waterway at the back of the site, at the base of the mountain, adds to this. It is also our overland flow path. That means there is no need for water retention tanks on the site.”
Argosy development manager Simon Brake says Viatris, the first tenant to sign for the site, says it values the landscape, the view of the mountain and the proximity to the Domain’s green space. He says the overall site is conceptually similar to a mini-Highbrook.
Ten minutes away, at 224 Neilson St, Argosy is developing a $100 million industrial park, its largest site to date. The company has leased a recently completed 5000sq m building to logistics and storage business Bascik Transport, which is now moving in. Next door, Argosy is constructing a 12,000sq m facility, due for completion in August, which is still awaiting tenants.
Brake says the site is already making a positive impact on the area, which has a long history of being industrial: “It’s a brand new state-of-the-art industrial estate that looks slightly out of place among its grungier neighbours. There’s a neighbouring residential precinct which should provide a local pool of labour.”
Argosy has a long-term goal for half its buildings to be green-rated by 2030. “By the time we finish the two industrial parks at Neilson St and Mt Richmond, around 59% of our portfolio will be green,” says Storey.
Marilyn Storey.
She says Argosy’s focus on sustainability helps attract high-quality, long-term tenants.
There’s another benefit. “A lot of innovation comes from sustainability and climate adaptation. We now provide high-grade, quality offices in our warehouse and industrial buildings. The working environment in one of these is as good as working in an office in the centre of town.”
Brake says this matters to potential tenants: “Industrial occupiers are among the most sophisticated occupiers. If you look at what’s happening in the industrial space, they need to attract the best talent – it’s just the same as your inner-city barrister chambers. Which means they need a good level of attractive office space.
“Logistics is a sophisticated operation. Some of our logistics tenants spend many millions on advanced handling equipment. They run intelligent operations. They need to have an office environment that matches the quality of their operations.”
It’s not uncommon for developers to talk about sustainability, but Argosy has a distinctive approach to carbon reduction. It focuses on retrofitting existing buildings. Brake says it is more sustainable and, in the long term, better for the environment, to repurpose an existing building rather than to demolish it.
A classic example is the high-profile, heritage-listed building at 8 Willis St in Wellington. Storey says: “We achieved a 38% carbon saving and a 5.5 NABERs rating.” NABERs is the National Australian Built Environment Rating System that measures the sustainability performance of a building compared to others.
She says many commercial tenants choose retrofitted buildings over new constructions. “It’s all about the sustainability push and lowering the carbon footprint. You are making significant carbon savings by using an existing structure. A lot of carbon goes into producing the cement, concrete and steel used in a new construction.”
Closer to home, Argosy retrofitted three buildings on Carlton Gore Rd in Newmarket opposite the Domain and one is now tenanted by Kāinga Ora.
Brake says when Argosy is looking for property suitable for retrofitting, the key is if the building has “good bones”. “Our most recent commercial office upgrade is 105 Carlton Gore Rd. Like the building at 8 Willis St, it has good bones – meaning it is structurally sound. It requires some NBS upgrading like all buildings of a certain vintage.
“NBS is the New Building Standard. Since the Christchurch earthquakes all new buildings and all existing buildings have to be upgraded to a seismic standard. New buildings need to reach the 100% mark; existing buildings have to reach 67%.”
When Argosy retrofitted 8 Willis St it took the NBS up to 130%, because that was a requirement of Stats NZ, which is a tenant in the building.
“The building at 105 Carlton Gore Rd was below the threshold, so we had to do the seismic upgrade. But it had good bones, it’s in a great location and, because it was built before the Unitary Plan, it has a good parking ratio. We’re allowed to keep existing parking ratios. It made sense to recycle the building.”
Though not everyone needs generous parking ratios, they can be vital for some tenants. “Say they have engineers working there who have to continually go out on site visits. Other tenants might have clients coming to visit who need car parks.”
There are other benefits from retrofitting besides the lower carbon footprint and legacy planning requirements. It’s faster than building from scratch, typically developers can save six months, which means the buildings cost less.
Storey says tenants get a building the same as the latest modern standard but at a lower price. “If they want a six-green-star-rated building, it costs less for us to reach that level by retrofitting than by constructing an entirely new building. Tenants get all the benefits of a new building at a lower rent”.
Argosy Property is an advertising sponsor of the Herald’s Project Auckland report.
