Action in city, fringe, Shore and Penrose

By Bob Dey

Auckland's tallest office tower, the Royal SunAlliance Centre, is topped off, Symphony Group opens the Heritage Grand hotel and apartment building next week and Clear Communications has just celebrated its move across the harbour to Takapuna with a formal opening of its Smales Farm headquarters.

Also in Takapuna, NZI House has been sold to Kea Property Group and a private local investor for $4.4 million and may in time be converted to residential or tourist use, although long leases should keep the building in office use for some time.

The strength of the industrial market was confirmed this week with a decision to add two new industrial developments worth a total $9 million to the Stadium Business Park in Penrose.

Down in the city, developer Symphony Group hands over the Heritage Grand on Nelson St to the Dynasty Hotel Group on Friday. Dynasty already operates the adjoining 269-apartment Heritage Auckland in the former Farmers department store.

The new 14-storey building will be run under the name Heritage Auckland Tower. Two floors are dedicated to owner-occupiers, with most of the rest of its 218 units bought by investors.

An unusual feature is the tennis court, built across the service lane between the two buildings. First official guests for the new building will be Apec delegates next month and the hotel will open to the public on September 15.

Kea director Dave McAlpine says he bought NZI House in Takapuna as a long-term investment - the potential rent of $600,000 would put a 13.6 per cent yield on the purchase price - but there is the option of conversion once NZI's new six-year lease over three floors and some nine-year leases expire.

Daryl Devereux, of Bayleys, says the building was put up for tender 18 months ago, but in a new marketing campaign through Bayleys and CB Richard Ellis four serious contenders surfaced. All looked at turning the top two floors into apartments and some at adding a seventh floor.

McAlpine says Takapuna is going through a transition as some larger tenants head for Albany. He believes Takapuna has the potential to become the North Shore's Newmarket with a mix of upmarket retail, restaurants and apartments.

Clear has taken a position in the Smales Farm development on Takapuna's northern fringe, with an official opening for its $50 million, 17,400 sq m headquarters a week ago.

The Clear Centre, a striking see-through structure with a full-height central atrium, was originally expected to save half the company's $1 million a year of energy costs, but project manager Neville Fox says the saving has risen to 85 per cent. Sensors and dimming will help cut the electric light bill by 40 per cent.

Clear had 11 floors in its end-of-the-80s Symonds St building and will retain two, with 100 staff there out of a total 950. National leasing manager Chris Gemmell says two floors have been subleased and a deal is pending on three, with net effective rents between $165 and $190 a sq m - better than rents on much of Queen St, which Gemmell says has been helped by the IT slant to tenancy based on Clear's cables and fibre-optics.

In the industrial market, Colliers Jardine brokers Charlie Oscroft and Nigel Ingham leased an Airport Oaks facility to global logistics provider Circle International a few months ago and knew Circle wanted more space.

As a result they have helped negotiate a Stadium Business Park lease between Circle and the landowner, Fletcher Property. On completion in January, the property will be syndicated.

Circle has been growing its business in contract logistics for the high-tech sector, says logistics manager Paul Williams. The company's new complex will include an electronics workshop with anti-static provisions and will have space for expansion.

Another 1.2ha stadium park site, sold for $1.2 million, will be developed for an exporting company, says Marty Roestenburg of Colliers Jardine. That leaves four sites, ranging in size from 3000 to 6200 sq m, in the park for sale as bare land or for design-build development.

The property, originally covering 12ha, was occupied by NZ Forest Products and then Fletcher Wood Panels since 1940. Rationalisation brought a change of use for part of the site in 1994 and three design-build premises have been erected. Fletcher Challenge Forests House was syndicated by Dominion Funds two years ago.