$250m property gamble: Building without tenants – Mansons goes big in Newmarket
It’s a quarter-billion-dollar punt: build a nine-level Auckland office block without any pre-commitment from tenants.
There were forecasts that Covid-19 would kill offices, but New Zealand’s wealthiest privately-owned commercial developer is seeing the opposite.
Mansons TCLM is building a $250m block covering almost 1.4ha without going to the market in advance to pre-lease space.
The company’s Culum Manson said demand for new office buildings from his family-owned firm had risen sharply since last year’s lockdown, and instead of demand for new offices falling, it was rising sharply.
“It’s the opposite of what you’d expect,” said Manson, standing outside 110 Carlton Gore Rd, which the business is marketing as One Ten Carlton Gore Rd, at the Clayton St intersection.
The site, up the street from the Newmarket Olympic pools, is now a deep hole in the ground, with a Mansons tower crane in the middle, this week hauling steel reinforcing for foundations below the basement levels.
Manson said Covid was certainly having an effect on office leasing and pre-commitment -but not by killing demand. Businesses realised they needed better, more environmentally-friendly offices to draw staff away from working at home into the office, and to enhance corporate culture.
“We’ve seen a lot more customers wanting to upgrade,” said Manson. “There’s a desire by businesses to get people out of their homes and working in the office. We’re in the market selling new buildings constantly.”
One Ten Carlton Gore Rd has been designed to become Newmarket’s first six-star green-rated office building. An atrium will bring natural light into the planned 2100sq m floors.
Two basement levels are now being excavated for 120 car parks, a storage area, bike parks, showers and lockers and loading zones.
All up, 13,865sq m of new commercial floorspace will hit Newmarket, one of the area’s largest developments since Scentre Group invested $750m expanding Westfield Newmarket.
Shops have been designed for ground-floor areas and 308sq m of storage is being offered to tenants in the basement. At level six, tenants will be offered exclusive use of a 241sq m deck.
The entry foyer will have a 3m floor to ceiling height and Bayleys is advertising naming and signage rights.
Work started at One Ten Carlton Gore Rd a year ago, following Mansons’ usual modus operandi: “We construct our buildings without the need to pre-commit tenants.”
Manson said discussions were being held with corporates who were interested. The One Ten name will go when large areas of the project are leased with naming rights.
Businesses were going through real estate agents which led them to Mansons, he said.
“All of them come through brokers and it’s the CEOs, CFOs and HR people who are driving a desire to move,” he said.
Solar power, backup energy generation and the use of greywater are some of the building’s features. Mansons built 151 Fanshawe St, the new Kiwibank office, and that building has six green-star certification.
Across town in the city’s western precinct, Mansons is finishing the last of three buildings sold to a multibillion-dollar Asian investment fund for about $700m.
PAG Group, formerly known as Pacific Alliance Group, bought these office buildings from Mansons TCLM entities:
• AA Insurance House, 46 Sale St
• The recently-opened 155 Fanshawe St, where Kiwibank, Southern Cross and Genesis leased space
• The under-construction 136 Fanshawe St, where 2degrees, Fidelity Life and Meredith Connell are moving this year
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