Makeover for a grand old lady

The Queen St face of the BNZ Tower. Photo / Supplied

Resource consent has been granted for a multimillion-dollar makeover of the retail levels of the BNZ tower building at 125 Queen St in Auckland's central business district.

The redevelopment of the building's first five levels will provide for large open-plan retail areas, car parking and a childcare centre. The redevelopment will also incorporate an upgraded, more modern facade on the Swanson St side of the building and a new entrance lobby for the office floors above.

The original Bank of New Zealand facade on the Queen St frontage, including the central double doors, columns and timber-framed joinery, will be retained as part of the redevelopment. However, the current internal walkway between the facade and the existing retail space will disappear, offering the tenant direct exposure to Queen St.

Construction of the original building on the Queen St site was undertaken during the 1880s. The building with its "neoclassical Greek revival facade" was designed by Leonard Terry of Melbourne.

The property was redeveloped in the mid-1980s as the Bank of New Zealand's corporate office, with the original colonial fa ade along Queen St retained and a new office tower built behind it. The complex is located on a 2020sq m site fronting on to Queen and Swanson Sts, with a rear access loading dock off Mills Lane.

The BNZ is relocating from the building early next year to the new Deloitte Centre being developed by Multiplex directly across the road on the other side of Queen St.

The owner of 125 Queen St, Milverton International Investments, is taking the opportunity to upgrade the building, starting with the retail space.

David Bernard and Michael Grainger, retail specialists with Bayleys Real Estate's Auckland Central office, have been appointed to manage the leasing of the retail space.

Bernard says the basement has a net lettable area of just over 1000sq m and the ground floor and first floors offer over 1200sq m of space each.

These would be available either to one retailer interested in taking on all three floors, which are connected by escalators and lifts, or to a small number of bulk or larger-format retailers or a grouping of similar retailers.

"Large-format retailers are not adequately catered for in Queen St and we believe there is definitely a gap in the market for a retail development which can provide substantial floor areas of over 1000sq m," Bernard says.

"This amount of space is very hard to access and what there is is mostly locked up in long-term leases to well-established tenants.

"The other option we're looking at is having clusters of similar types of retailers or service providers on each floor. In the current challenging retail leasing market it is important that options be kept open but a point of difference is needed to be successful with a project of this size - which is why we are focusing on market segments where there is not a lot of competing product."

Bernard says one of the concepts currently being looked at for the basement area, now operating as a food court, is to transform it into an upmarket gourmet food marketplace along the lines of other high-quality outlets which have been successful in a number of suburban locations.

"This would enable residents, tourists and workers in the city to pick up fresh meat, fish and vegetables, a bottle of wine and other essential grocery items on their way home at night.

"With so much pressure on everyone's time, there has been a trend towards convenience 'hand shopping' with increasing numbers of shoppers picking up a few bags of what they need every one or two days during the week, rather than battling for a space at the carpark and lining up in long queues at the supermarket."

Bernard says this type of marketplace in Queen St would draw its customers from over 84,000 people coming in daily to work in the CBD and around 18,000 people residing in the central city. According to Statistics New Zealand, the resident CBD population of Auckland City is expected to keep growing to over 24,600 in 2016.

A retail site analysis has been undertaken by CBRE senior analyst Kevin Anthony for Milverton. He estimates the total retail expenditure generated by the worker and resident population within the main Auckland CBD trade catchment area - that could be accessed by retailers within 125 Queen St - would sit close to $548 million and $164 million respectively.

This expenditure is forecast to continue growing to $678 million for the worker population and $212 million for residents by 2016.

Anthony says food retailing, including tobacco and alcohol, generates the highest volume of retail spending in the CBD, currently estimated at $288 million and forecast to grow to $356 million by 2016.

Bernard says concepts being investigated for the other two retail floors are a cluster of jewellery and related shops on the ground floor, where David Mansor Jewellers is the main tenant. A comprehensive medical centre and medical-related service providers are envisaged for the first floor. A corner cafe is also planned for this floor, at street level on the corner of Swanson St and Mills Lane.

Car parking will be retained on Level 2. Level 3 will also comprise car parking but an existing office area will be converted to a 350sq m childcare centre with an additional 300sq m outdoor deck for an open play area.

Nicholas Piper, commercial divisional manager for Bayleys Property Services, which manages the entire building on behalf of offshore-based Milverton International Investments, says one of the likely stipulations for the childcare operator would be that it be able to cater for casual "drop in" children as well as day stays.

"This would enable both visitors to the building and workers in it to use the creche facility. In particular, we think having a good quality creche in the building available for office workers' children will help in attracting new tenants for these floors."

Piper says Milverton has indicated it will undertake a minimum 4-star green refurbishment of the building's office floors once the BNZ has departed, along with the upgrade of the entrance foyer.

There will also be a completely new facade constructed along part of the Swanson and Queen Sts side of the building which will give excellent signage or naming rights opportunities, he says. This will incorporate brass and stainless steel basket-weave screens over an aluminium curtain wall.

Bernard says the site benefits from substantial foot traffic in one of the highest pedestrian count locations within the Auckland CBD. The latest pedestrian traffic count survey conducted by the Property Institute of New Zealand last year within 100m of 125 Queen St recorded from 1620 to 1622 people an hour compared with the Auckland CBD average of 964 people an hour - ranking the vicinity inside the CBD's top 10 highest pedestrian count areas.

"The northern end of Queen St is particularly sought after from a retailer's point of view because of the sheer volume of people who walk past shop doors every day," Bernard says.

"This is reflected in some of the world's highest-profile brands such as Louis Vuitton and Gucci occupying space nearby. The completion of the Deloitte Centre, located opposite the BNZ Tower, will also bring fresh impetus to this part of Queen St."