Rail link tipped to rejuvenate tired area
Auckland's planned underground City Rail Link is likely to lead to a flurry of development activity in the CBD fringe suburb of Eden Tce.
Eden Tce is the suburb that will be affected most when the new rail lines are built, because it is where the tunnels will rise to the surface to join existing tracks at Mt Eden.
While most buildings in the CBD won't be affected by work on the tunnels because they will be constructed underground by giant boring machines, the work in Eden Tce will be undertaken from above ground, making it necessary to demolish many buildings.
Nearly 100 properties in Eden Tce are expected to be affected by surface work related to the tunnel exit or a new underground station to be built 40 metres under Symonds St between the Mt Eden Rd and Khyber Pass Rd intersections, although not all of those properties have buildings on them.
Peter Kermode, a commercial property broker with real estate company Colliers International, said there had been a lot of uncertainty while the City Rail Link was being debated, because landlords, tenants and developers did not know if it would go ahead and how their properties would be affected.
Now the Government had given the plan the green light, people had started making their own long-term property plans.
Most of the buildings to be demolished were small to medium-sized, low-rise commercial and light industrial buildings, so businesses occupying those premises would need to relocate.
Many would want to stay in the same vicinity, which would increase demand for space and reduce the vacancy rate in the area, which was probably a bit below the 18 per cent average for CBD fringe suburbs, Kermode said. That would also encourage developers and investors to refurbish existing buildings in the area or develop new ones.
Not all of the properties being acquired to build the new rail lines would be needed after the work was completed, so much of the land involved would probably be put on the market and sold to developers at the end of the project, Kermode said.
Developers were already aware of Eden Tce's potential because of its proximity to the CBD and the fact that many of its buildings were old and no longer suitable for tenants' needs. Land values in the area had been going up, while building values had been going down as they became obsolete, Kermode said.
Siting a new railway station in Eden Tce would also increase its attractiveness as a location to businesses and to people wanting to live in the area, making commercial and residential developments more viable.
Kermode believed the area would start to be transformed by a wave of higher density development, mostly of midrise apartment blocks and some commercial office space, with a small number of retail premises to service the local community.
Many of the commercial buildings in the area were owner-occupied and many of those businesses were already planning to move on, Kermode said.
"I think there have been a lot of owners who have been waiting for this City Rail Link to be formalised and get the green light from central government.
"People think they have certainty around this now, so they're saying ‘let's go, and move out of this property we've been in for 30 years and let someone else redevelop it more intensively'."
Most properties would probably be redeveloped as "midend" residential complexes.
Developers were already starting to buy up properties, but because construction of the rail link has been pushed back to 2020, they weren't in a rush to finalise their plans.
"Their view is that they can sit on it [a property they acquire] and rent it out and get holding income for five years or so, and then they'll see an uplift in value when this [rail] project proceeds," Kermode said.
That was when they would push the go button on their own development plans.
- © Fairfax NZ News
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