ANZ's new 15 year lease quashes speculation

The ANZ Centre in downtown Auckland. Photo / Dean Purcell

Speculation that a major bank would shift into a new 26-level high-rise office tower in Auckland has been dashed.

AMP NZ Office, the listed real estate company, said it would not only keep ANZ as a tenant in its Albert St tower in Auckland but that the high-rise office tower would undergo a big refurbishment worth $76 million.

About a year ago, talk was of developer Tim Edney applying for resource consent to build a 26-level office tower for the bank opposite Britomart.

As a rival of Edney, AMP NZ Office Trust tried to force notification of plans for Auckland's biggest new tower.

Through its lawyers at Minter Ellison Rudd Watts, the NZX-listed business last year sought any hearings to be in public.

But now AMP says it has signed a new 15-year lease with ANZ from January 1, 2014 on 17,700sq m in the bank's existing building. That would make the bank the landlord's single biggest tenant.

AMP said it would undertake a comprehensive redevelopment of the ANZ Centre for about $76 million.

"The redevelopment will include a substantial new pavilion lobby and entrance as well as the provision of new building services on a floor by floor basis. The ANZ Centre will be repositioned as one of Auckland's premier office towers," the company said.

Scott Pritchard, chief executive, said: "We are delighted that ANZ has chosen to remain with ANZO and within the ANZ Centre. This is a strong reflection of the quality and adaptability of ANZO's portfolio to match the needs of our customers. We believe this transaction will be positive for the long-term health of the Auckland CBD office market."

The company said the new lease would have a positive effect on rental growth prospects, projected vacancy rates, and values across the Auckland CBD office market.

"It will also increase ANZO's portfolio weighted average lease term [WALT] by 1.2 years. Combined with further leasing successes, the new ANZ lease will lift ANZO's WALT to 5.8 years, up significantly from 4.6 years at the end of December," the company said.

"In addition to the four new leases in 21 Queen St which were announced with ANZO's interim results last month, a further four new leases over five and a half floors have now been secured, lifting the building's occupancy level from 30 per cent to approximately 63 per cent. Additionally an undisclosed new customer has secured naming rights over 21 Queen St."