Auckland transport projects spike retail property demand
Colliers International director of investment sales, Gareth Fraser, said completion of the first stage of the $1.2 billion Auckland Manukau Eastern Transport Initiative (AMETI) has already made a noticeable economic impact in the suburbs of St Johns, Glen Innes, Mt Wellington and Stonefields.
“12 months following the completion of the first stage of AMETI coincided with rapid growth in residential development in these catchments, thanks – in part – to a number of large-scale projects such as Todd Property’s Stonefields development. This has, in turn, stimulated demand for commercial property.”
AMETI is a major program of works by Auckland Council to improve strategic transport links in the eastern suburbs, with improvements to both public transport and roads. Auckland AMETI program director, Peter King, said this spike in demand for commercial property is also likely to be partly driven by the improvements to the area’s strategic transport links.
“Major transport investments are generally expected to attract increased demand for property and new development because of the better transport access they provide,” King said.
The improvements are expected to generate productivity benefits in the area, which will lead to an increase in GDP of $380 million, he said.
“Land use projections showed strong residential and employment growth in the area, which was a key driver for the project because of the increased demand for transport.”
Stage one of the initiative was completed in November last year and included improvements such as a new Panmure station, the Te Horeta Road linking Morrin Road and Mt Wellington Highway, new bridges on Mountain Road, Ellerslie-Panmure Highway, and for Panmure Station new cycle lanes, shared paths and footpaths.
Fraser said commercial developments in the eastern suburbs already include the new town centre at Stonefields, a new Countdown supermarket and ancillary retail in St Johns, as well as better trading for retailers on Lunn Avenue.
“Other commercial property areas benefiting from the project include Morrin Road, which links to the new Te Horeta Road bypass – and retail developments on Mt Wellington Highway.”
Fraser noted the 1496sqm convenience retail development at 200 Mt Wellington Highway as a case study. Its developer, Broadway Property Group, cites the delivery of AMETI as a significant contributor to the project’s successful pre-leasing activity.
“In our view, the infrastructure upgrade underpins the demand for convenience retail in the area, and it was a key driver in selecting this site to develop,” Broadway director, Adrian Hughes, said. “Eight of the eleven units have been pre-leased with three remaining available.”
Fraser said Colliers has recognised the growth in this area by placing renewed emphasis on the eastern catchment with three brokers specialising in the area. These three brokers include Fraser, Charlie Oscroft and current Black Sticks captain Simon Child. Child, a two-time Olympian, joined Colliers’ investment sales team in July after a long-standing interest in commercial real estate.
Meanwhile, stage two of AMETI – which includes a busway from Panmure to Pakuranga, replacing Panmure roundabout with an intersection with traffic lights and safer cycling and walking links – is expected to commence in 2021.
“We expect increased demand for commercial property to flow onto these areas over the next five years, particularly in Pakuranga, Howick, Botany and East Tamaki,” Fraser said.
King said the project will also generate a raft of other benefits for the area.
“Residents of the eastern suburbs will have greater transport choices and be better connected to the rest of Auckland. They will see significant improvements to public transport with the busway providing rapid transit on congestion-free lanes which connect to the rail network.”
Providing quicker, frequent and more reliable bus journeys is expected to shift large numbers out of cars to ease pressure on the roads for freight and other traffic.
“There will also be major improvements to walking and cycling, with safer, new walking and cycling connections to town centres and within them,” King said.
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