Fonterra hunts for new HQ

Fonterra plans to leave its current head office in Princes St in Auckland. Photo / Chris Gorman

Global dairy giant seeks perfect site in Auckland CBD to build state-of-the-art structure.

The world's largest global milk processor and dairy exporter wants to move into New Zealand's best new building in four years, in a $100 million-plus boost for the construction sector.

Theo Spierings, Fonterra's chief executive, issued a detailed 21-page brief describing how the new headquarters must surpass much of the existing real estate stock, be of international quality, designed to promote 21st century knowledge and working patterns, and be able to enhance work style.

As the world centre for an organisation with 16,000 staff in 50 countries, Spierings indicated Fonterra wanted its new building to match its image and reputation, leaving behind AMP's building at 9 Princes St in Auckland which has suffered weathertightness problems.

"Fonterra's new accommodation solution will facilitate driving cultural change, sustainability and the health and safety of Fonterra employees," said Spierings' request for information issued to the country's top developers.

An aerial map showed an area bounded by the waterfront to the north, Westhaven, Mechanics Bay to the east and Mt Wellington to the south.

Spierings said Fonterra would consider city-fringe locations but wanted good light penetration, exposed, robust and honest construction and large efficient floor plates so staff could work collaboratively "bringing our people and our ambition together".

Fonterra wants an office area of between 1.1ha and 1.3ha, not counting other ancillary services like carparks.

John Schellekens at real estate consultants and agents CBRE is handling proposals. One industry source said many parties had expressed interest.

Geoff Cooper, Auckland Council's chief economist, said the move was a huge plus for the city and could have significant knock-on benefits to the Auckland and national economy, even though it was a relocation and not the arrival of a new business.

Only about 100,000 people work in Auckland's heart - equivalent to 13 per cent of the region's working population, which Cooper called "far too low" by international standards.

London and some Australian cities had 20 to 30 per cent of regional working populations in the CBD which created great benefits, he said.

Bigger working populations also created "growth pains" for infrastructure and transport, he added.

Brian Dackers of cost consultants Rider Levett Bucknall said any new construction activity had a benefit but it left a gap with the existing Princes St building.

Non-residential construction in Auckland was subdued and consent values fell 10 per cent in the year to July.

"With reduced public spend and the difficulties in private sector investment conditions, there is a real lack of significant projects on the horizon in Auckland and little suggests any real improvement in the short to mid-term," RLB said in its latest construction report.

"We expect current market conditions to prevail for the balance of 2012 with optimism that conditions will improve mid to late next year."

Zoltan Moricz, CBRE senior director of research and consulting, estimated the new headquarters could be worth about $100 million.

New Auckland office buildings to be finished next year and in 2014 would provide 35,000sq m of office space, he said, referring to Goodman Property Trust's development at Greenlane's Central Park and Manson TCLM's new Remuera Rd block near the former Mercury Energy building.

Prime and secondary office vacancies had fallen, he said, indicating a healthy sector.

Fonterra wants:
• New-build proposals from developers
• Will consider existing buildings
• To sign up for a minimum 12-year lease
• Eco-smart offices for 1000 or more people
• State-of-the-art contemporary building
• 200 on-site secure carparks and 300 third-party carparks
• To move in by May 1, 2016