$850m Commercial Bay building site in Downtown Auckland with Scott Pritchard, Precinct Properties Chief Executive.
Plans to open Auckland's biggest new CBD shopping mall before next Christmas have flopped and most of the shops will not now open until after the festive season in 2019, according to the developer.
In its annual result presentation yesterday, Precinct Properties said that instead of opening all its Commercial Bay shopping centre in the new $941m tower in late 2018, it now had a new programme.
Scott Pritchard of Precinct. Photo/Jason Oxenham
That split the opening into two phases "with phase one, comprising around 20 per cent of the retail, planned to open earlier than previously indicated in mid-2018. The opening date for the balance of the retail is now programmed for late Q1 2019".
So 80 per cent of the shops now won't be trading before next Christmas - the most important date in any retailer's calendar.
Last year, Precinct chief executive Scott Pritchard said all the retail centre was scheduled to be open by next October and the office tower by mid-2019.
Fletcher Construction is Commercial Bay's head contractor and chairman Sir Ralph Norris this week told a post-result media briefing at Penrose that all was well with the Commercial Bay contract.
Precinct's results presentation yesterday said the centre's delayed opening dates would not mean it loses money.
"Based on site progress to date, the revised opening plan is expected to mitigate risk from construction delays and help ensure a successful opening. We retain a positive working relationship with our main contractor and remain comfortable with the provisions of the fixed price construction contract," Precinct said of Fletcher.
A Precinct spokeswoman explained the situation further.
Commercial Bay (centre) is rising in the CBD.
"Precinct has taken the decision to delay the opening of the retail centre following advice received from independent experts that the likely completion of the construction for the retail component of Commercial Bay will now be in Q1 2019 rather than Q4 2018," she said.
Shane Solly of Harbour Asset Management, which owns Precinct shares, expressed disappointment in the delay, indicating a pre-Christmas mall opening was what had been expected.
"The slight delay to Commercial Bay development was a small blemish on what was a solid result from Precinct," Solly said.
A Fletcher spokeswoman said yesterday: "The project is running to the programme agreed with the client."
Sources close to the project said extensions to the programme were provided to Fletcher under its contract, because of external circumstances which were outside the builder's control. Those extensions meant the building time line came too close to December for Precinct to be able to fit out its new shops in time for Christmas.
Plans for dining areas at Commercial Bay.
International clothing retailer H&M has leased space in the mall beneath the 39-level tower, rising on the ex-Downtown shopping centre site between Lower Queen St and Lower Albert St. Two years ago, Pritchard named Zara, Uniqlo and TopShop as other potential candidates, telling how big-named global retailers like these would enhance the city's shopping.
Seventy shops were demolished and more than 100 new shops are being built.
Precinct said yesterday 66 per cent of the Commercial Bay office tower was pre-leased, up from 60 per cent last year.
"In the period we secured a further 4000sq m of space. Achieving an unconditional agreement to acquire Queen Elizabeth Square in December 2016 provided additional certainty to launch the retail leasing, with commitments being secured over 46 per cent of the retail space. The retail precinct continues to attract high interest," its result presentation said.
"Pleasingly, the as-if-complete value of Commercial Bay increased by $88 million to $941 million. This increase was driven by leasing success, higher rental levels and in recognition of the quality of the development," the business said.
Forecast development profit had increased to $213m and once complete the project was expected to deliver a return on cost of around 30 per cent.
