Auckland University buys old brewery site
The University of Auckland has entered into a conditional agreement to purchase the former Lion Breweries site in Newmarket, in what it is calling its "most significant property acquisition in a generation".
The 5.2 hectare site in a prime inner-city location has been the subject of plenty of speculation and at least one failed sale to a syndicate led by AMP Capital Investors.
After speculation about the university's interest was reported last week, University of Auckland vice chancellor Professor Stuart McCutcheon has today confirmed the conditional agreement but the price is being kept confidential.
Rumoured purchase prices for the site have ranged between $150 million to $70 million over the past five years.
CBRE managing director Brent McGregor estimated its current value at somewhere under $100m.
If acquired, the university said it would build a mixed-use campus, "with space for purpose-built teaching and research facilities, student accommodation, business development and other facilities".
The site's owner Great Northern Developments Limited, a company 100 per cent owned by Lion Limited, said a sale to Auckland University represented "the best value creation from the Khyber Pass site over the short and long term".
"From what we understand of the University's plans, there would be considerable commercial and social benefits to the community," said Great Northern director, and Lion Nathan chief financial officer, Jamie Tomlinson.
"More broadly, we think this would be a positive outcome for the city of Auckland."
McCutcheon said the university was currently expanding at a rate of 6000 square metres of floor area per year and the 52,000 square metre site would provide growing space for the next 50 years.
"In 2008 we consulted widely on, and subsequently adopted, a plan to concentrate our academic activities on the City and Grafton Campuses," said McCutcheon.
"However, at 6000 square metres per annum these two campuses can sustain only 10-15 years of growth."
The University of Auckland's Tamaki campus near Glen Innes, approximately 25 minutes drive from the city, would need to be sold "in part or in whole" to pay for the Newmarket purchase and subsequent development.
The rating valuation of the Tamaki campus property is believed to be about $58m.
McGregor said the Tamaki campus land was ideal for other development because of its strategic positioning among developing suburbs and transport links, including rail.
University of Auckland chancellor Roger France said the University Council was enthusiastic about the prospect of acquiring the Newmarket site and would now conduct due diligence.
He said a decision on whether or not to make go unconditional would be made at an April 2013 meeting of the university's council.
Lion currently leases the property from Great Northern Developments for "warehousing purposes".
Newmarket Business Association chief executive Ashley Church said last week that he "cautiously welcomed" the idea of the university moving on to the site.
"A university campus would be an ideal fit with the Newmarket Business Association's current strategic plan.
"There is a huge opportunity to show real vision and utilise [the site] in a way which will be both profitable and will have major economic and social benefits."