Mixed use development trend powers 43 Carbine Road’s potential
| 30 June 2018
A major mixed-use investment and development opportunity in one of Auckland’s most rapidly evolving areas has arisen with the news that a large 2.2 hectare property at 43 Carbine Road in Mt Wellington, immediately next door to Sylvia Park, is for sale.
Marketed by Bruce Catley, John Bedford and Claus Brewer of CBRE, the freehold property is marketed for sale through a deadline Expression of Interest (EOI) campaign closing Wednesday 1 August 2018, unless sold prior.
John Bedford says that it has taken nearly half of 2018 for the most exciting opportunity of the year to come to the market. “At a time when Auckland Council is focused on developing suburbs across Auckland to cater for growth, this site at 43 Carbine Road - adjoining the Eastern Rail Line next to Sylvia Park - offers immense potential. It could well become a suburban equivalent of City Works Depot or Ponsonby Central.
“Its size and proximity to a well-established and well-known commercial hub, coupled with its mixed use potential, means its future use options are about as wide as you could consider, including a mix of retail, hotels, residential and commercial.
“This potential only strengthens when you consider that the height limit for the site has been increased under Council zoning rules from a standard 18 metres to 27 metres, allowing gross floor area potential of approximately 27,000sqm.”
Bedford therefore expects interest in the property from adjoining owners, investors who own assets in the neighbourhood and strategic holders of property in this rapidly emerging location who understand the long-term investment prospects.
“43 Carbine Road has already been on the radar with various groups, to add to their portfolios. Adjoining owners recognise the benefits of control of large parcels of land in this sought-after destination.”
The site is a single title 2.2085 hectare parcel with a 9,400sqm office warehouse currently occupying 43% of the available land.
Once a New Zealand Post sorting and distribution depot, it has been a bulk storage facility since 2009.
Claus Brewer says that 43 Carbine Road is in an enviable location next to one of the largest mixed use precincts in New Zealand, Kiwi Property’s Sylvia Park Shopping Centre, which is zoned Metropolitan Centre (Metro).
“Well located blocks of land this size in Mt Wellington, which is consistently one of the most popular areas in Auckland, always hold strong underlying value. This is a tightly held stretch of land; sites here don’t come up often. If you look at the land from the motorway flyover to the Coca-Cola Amatil manufacturing plant at the end of Carbine Road, these properties have been held in their current ownership for a long time.”
The Sylvia Park train station is located at the rear of 43 Carbine Road, says Brewer. “Not only does the site stand alone on its own merit due to its scale, but because of the proximity of the train station, there is the ability for the site - subject to approval - to connect into the existing train station, which would open it up to be serviced by public transport, which in turn will further open up its uses.”
Brewer says “These properties are likely to be developed for more intensive activities and we envisage that over time that the conversion rate will only increase, particularly due to the fact that there is a residential enclave close by to the north-east, with the Panmure Lagoon beyond this.
“Mt Wellington provides access to the wider local amenities and both public transport and motorway infrastructure.”
Key to the future potential of 43 Carbine Road is that it may have the opportunity to be up-zoned, says Bruce Catley.
“The site is currently zoned Business – Mixed Use under the Auckland Unitary Plan. It forms part of a cluster of similarly zoned mixed use sites to the east of the railway line. This zoning provides for a wide variety of activities with residential, offices and retail alongside a range of other activities.
“It is highly likely that an enhanced zoning could be adopted by Auckland Council in due course. Either way, this site offers considerable development flexibility in this rapidly growing location, right next to the significant landholdings of Kiwi Property.
He adds that the site benefits from an additional ‘Height Variation Control’, which provides for a total maximum height of 27 metres, of which 25 metres can be ‘occupiable’.
Catley says that the site offers the opportunity for interim holding income through the office warehouse and large rear yard, and it could also be re-positioned through phased development or conversion.
“We have undertaken some preliminary work with architects to investigate and understand what’s possible for the site. Taking into consideration the various options for alternative use on the site, we have looked at two possible Mixed Use schemes. One is a residential and retail/office new build scheme. In terms of yield, which offers a total of 315 apartments – with 15 apartments per level, and 7 levels per block, across 3 blocks – plus 4,300 sqm of ground floor retail/office space.
“What stands out for me is the diversity of options for this site. For example, the purchaser may be able to build a hotel at the back in the undeveloped portion while getting planning underway to create a City Works Depot-style mixed use area on the whole or part of the front of the site.
“The site may be suitable for a small to medium size hotel development. It has relative proximity to Auckland Airport compared to other hotels in Auckland, and is connected to other parts of the region via SH1 and key arterials. The nearest hotel to the site is Waipuna Hotel and Conference Centre.
“The site also offers the potential to complement the retail offering at Sylvia Park by providing a destination cluster of retailers, similar to that of Nuffield Street or the Pavilions at Britomart. While a mall benefits from agglomeration, specialist stores are more of a destination that customers seek out for a bricks and mortar experience. The wider Mt Wellington area is currently lacking this type of retail, and the site provides the ideal opportunity to capitalise on the well-established retail appeal of Sylvia Park.”
Catley adds that the site is well placed to benefit from the boom in suburban apartment development.
“A record 843 suburban units were completed construction during 2017, which is more than the CBD and Fringe combined. This location and site is well positioned to take advantage of the trend toward suburban apartment living, due to its connectivity and amenity.
“The dramatic shortage of housing in the greater Auckland area over the past five years has driven demand to intensify fringe suburbs such as Mt Wellington. Recognition by Auckland Council to rezone traditional industrial precincts to Mixed Use are a clear demonstration of supporting opportunity to build up. 43 Carbine Rd is a prime example where residential apartments situated within walking distance to excellent amenity could be a development actively pursued by developers and house buyers alike.”
Ultimately, he says there is also potential for a mix of offers. “The highest and best use of the site is likely to encompass all four market sectors, and there is significant opportunity to design a new development that maximises the economic potential of 43 Carbine Road. In the meantime it offers excellent potential to provide shorter term income whilst a larger scale development is contemplated.”
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