Calls for Auckland Council to sell $500m worth of car parks

Author
Anne Gibson, NZ Herald ,
Section
Auckland,
Publish Date
Thursday, 12 July 2018, 3:31PM
The sites are seen as prime locations for apartment and office buildings. (Photo / Getty)
The sites are seen as prime locations for apartment and office buildings. (Photo / Getty)

Property developers say Auckland Council-owned carparks are perfect sites for new office or apartment buildings, with many in key central locations bound to benefit from the City Rail Link now under construction.

Michael Holloway, Property Council Auckland branch president, welcomed analysis from the Auckland Council, which used the $95.2m Downtown carpark to make a case for sales.

That analysis, prepared in December last year, questioned the council carpark ownership with a finance expert saying "unsolicited offers" had been made for valuable parking buildings.

However, the council said this morning it was not actively pursuing the sale of any of its parking buildings.

Holloway said that redevelopment of council carparks "would actively contribute to the vision for Auckland outlined in the Unitary Plan through intensification around the new CRL transport hubs."

"This creates a vibrant city that benefits all Aucklanders. Members welcome the opportunity to partner with the council on these exceptional sites."

Redevelopment of sites like the Downtown carpark would help accelerate good intensification of commercial and residential property, he said, with the sites having many development opportunities from mixed-use, commercial and residential.

"The options are endless," Holloway said.

Group financial planning senior analyst David Lai wrote in December that Auckland has an "opportunity to reconsider its rationale for continuing ownership, particularly given the presence of well-functioning privately operated facilities".

"Auckland Council has in the past received unsolicited offers for our parking buildings indicating private interest in the provision of these services," said his report from the pro-public transport council.

Lai went into more detail on Downtown at 31 Customs Street West, saying it was "an illustrative example" of the case for selling assets.

What carparks does the council own?

Lai's report listed council-owned carparks:

  • Downtown, 2088 parks, $95.2m book value;
  • Civic: 1015 parks, $68.6m book value;
  • Victoria: 888 parks, $42.7m book value;
  • Fanshawe: 497 parks, $17.8m book value;
  • Ronwood: 619 parks, $17.7m book value;
  • McCrae Way: 299 parks, $10.7m book value;
  • Tier 2 at-grade, various parks $120.1m book value;
  • Tier 3 at-grade: various parks $135.4m book value.

Lai said the 2088-space Downtown had a June, 2016 book valuation of $95.2m, produced annual net operating surplus of $6.6m yet stood on 6442sq m of "prime CBD real estate close to entertainment and public transport facilities."

A block away, Precinct Properties is developing the 38-level $800m-plus Commercial Bay. Although Lai did not mention that specifically, Precinct owns land spread across two blocks - all except Downtown. It has the PwC Centre, AMP Centre and the big Commercial Bay site.

A Precinct spokesperson said:"Precinct is an investor in city centre real estate and considers all strategically located assets which may be available for purchase.
We are not involved in any negotiations with Auckland Council on this asset, however."

Lai noted rampant development in the area and how Downtown was low-rise at just seven levels.

"Around the corner on Albert Street, multiple high-rise complexes are either under construction or planned for construction. this activity is quoted as being primarily due to the development of the City Rail Link indicating the reasonableness of a similar development occurring on 31 Customs St site," Lai wrote. "Residential and commercial development on this site would also allow Auckland Council to capture some of the value created by the CRL."

"Rationalising the parking building into commercial and/or residential developments would result in a number of positive community outcomes," Lai wrote.

  • "Maintain downtown parking to facilitate AT's transport objectives;

    • "Optimise AC owned land by partnering with developers to create value that can be directed to strategic assets;

    • "Intensification provides affordable housing and reduces overall traffic congestion."

The council manages six parking buildings: four in the CBD and one each in Manukau and New Lynn, Lai wrote, and more than 150 at-grade carparks across Auckland. At-grade carparks are broken down into Tier 2 (revenue generating) and Tier 3 (non-revenue generating), he noted.

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