Purchased for $7 million in 2001, the property was modernised and rebranded as Shortland Chambers Building, subsequently attracting barristers as anchor tenants. The company went on to purchase two heritage buildings in Shortland St, the General Building and Hotel DeBrett, plus Walker Wayland Centre at 53 Fort St, which is linked to the Shortland Chambers by an overhead walkway. An adjoining building at 57 Fort St was also purchased.
Courtney says the company focused on this part of the CBD because it saw it as underdeveloped and being "close to the action" for the type of boutique business it was focusing on attracting - including specialist legal and accountancy practices, business advisory consultants and investment managers.
He says the redevelopment of the waterfront and Britomart has helped re-energise the area, particularly Fort St, which is currently undergoing an upgrade.
The pair have focused on building up a portfolio of office properties with floor areas that are typically too small for big tenants but too big for small businesses and dividing them up into two or three tenancies.
"Small-business owners have so many things consuming their time, the last thing they often want to do is think about their real estate requirements," says Courtney. "We take care of that for them by providing space that is customised to their needs, in many cases also providing the fit-out, right down to the furniture if need be."
Gross leases, where the landlord takes care of outgoings such as rates and insurance, are uncommon in the Auckland commercial and industrial market where most leases are net, with the tenant paying all the operating expenses in addition to rental.
Courtney believes net leases are primarily about protecting the interests of landlords. "Gross leases provide certainty for tenants about their overall occupancy costs which is important for smaller businesses where cash flow can be tight," he says.
Bayleys' Auckland leasing specialists Jason Corliss and Matt Gordon, who market Shortland's space, say this tenant-centred approach has provided a point of difference in a cluttered market.
"Shortland Management has created a strong niche for itself by offering more than just vacant office space," says Corliss. "They're offering a hands-on service, providing visually appealing boutique premises tailored to their tenants' requirements which makes a statement about their business."
Courtney says Shortland Management looks for tenants with good growth prospects and structures its portfolio so there is flexibility for them to relocate should they need more space.
But he says the reality of the post-GFC market of the past few years means they have also been handling clients who are often in consolidation mode.
However, he is optimistic about the outlook for the CBD given bold council plans for central city rail and waterfront development along with the continuing economic recovery. "Shortland St is where many boutique professional businesses want to be to capture this recovery wave."
