New era in store for Auckland's Old Customhouse

By Bob Dey

Auckland's Old Customhouse is back on the market, three years after being bought by developers Andrew Krukziener and Arthur Morgenstern.

They bought the lease of the historic 110-year-old building for $1 million, gutted and revitalised it at a cost of $13 million for all but some of the basement to be turned over to upmarket retailing by DFS New Zealand.

Mr Morgenstern sold his half to his partner on completion two years ago and is awaiting signing of the Britomart master development agreement so he can start work on that project's grand entry statement, the old central post office.

The Old Customhouse, now called the DFS Galleria, has 5000 sq m of retail space on five floors plus the Richard Seddon Room tower. It is returning $1.75 million in rent a year, with another $100,000 from a safe deposit box business Mr Krukziener set up in half the basement.

The French Renaissance building designed by Thomas Mahoney was built in 1889 on what was then Auckland's foreshore, now the corner of Customs and Albert Sts. Among the offices it housed was that of the sheep inspector.

The property is virtually freehold, with a perpetually renewable lease and a peppercorn ground rent of $10 a year. DFS's 10-year lease is guaranteed by DFS Australia and Citibank.

The tender, through David Bayley and Bruce Whillans of Bayleys, closes on September 2.

Mr Krukziener's most notable Auckland investment is the $180 million Metropolis apartment hotel overlooking Freyberg Place from the old magistrates' court site, fast approaching completion.