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Big Auckland development site for sale

Contributor:
Fuseworks Media
Fuseworks Media

A prime 2,342m² freehold corner site in Herne Bay is being offered for sale with a resource consent for a development encompassing 69 apartments, two retail units and 76 car parks.

Located at the intersection of Kelmarna Avenue and Jervois Rd, the property is for sale by international private treaty closing Wednesday, April 18 unless sold prior.

"This well known, iconic property - formerly home to The Gables tavern - is one of the last large scale development opportunities available in the sought after inner city suburb of Herne Bay," says senior Bayleys broker Paul Hain. "It is well suited to development given its favourable zoning and the fact that it’s a level, rectangular shaped site with significant frontage to two streets, enabling multiple access points."

The resource consent for the demolition of the existing commercial buildings and the construction of a five-level residential and retail building, with associated parking and landscaping, was granted in June 2017 under the Housing Accords and Special Housing Areas Act 2013. The act was implemented to help address Auckland’s housing shortage and speed up the supply of residential dwellings as agreed in a Housing Accord between central government and Auckland Council.

The vacant Kelmarna Avenue site is among over 150 Special Housing Areas (SHAs) which have been established across the city where fast-track development of housing can take place. Plans drawn up by Paul Brown Architects for the resource consent and other related material will be made available to interested parties.

"The architect’s concept drawings for the site show an attractive, low rise building with a graduated set back from its boundaries and well positioned screening and landscaping, including a green wall, to soften its visual impact," says Hain. "But it’s entirely over to the new owner whether they pursue these plans, come up with their own concepts for the property or look at it as a long-term hold and sit on it as it is."

The property’s underlying Local Centre zoning under the Auckland Unitary Plan applies to a large number of small centres throughout Auckland generally located in areas of good public transport.

The zone allows a wide range of activities which meet the local convenience needs of surrounding residential areas, including retail, commercial services, offices, food and beverage and appropriately scaled supermarkets, with residential permitted on upper floors.

Previous redevelopment plans for the Gables site have included retention of a tavern/wine bar, and a mix of office units, townhouses and apartments. However, Paul Hain, says the "highest and best" use for the site is probably for an apartment development given the area’s high land values, with Herne Bay being New Zealand’s most expensive residential suburb.

"The site is ideal for an apartment development with its corner location with long street frontages meaning it can’t be built out and also providing plenty of natural light as well as wide ranging city and harbour views from its upper levels.

"Herne Bay has an aging population looking to downsize but with limited future options to stay within their vibrant, central, high-end suburb - so this type of development would suit them. The market for apartments in the area is well proven with the success of the long-established residential towers further along Jervois Road. These apartments are tightly held and come on the market infrequently."

The property for sale is probably still best known to the many Auckland motorists who pass by it as the site of The Gables Tavern, even though that business closed a number of years ago.

Dating back to the early 1970s, the tavern was the first pub to be built in this previously dry area. The building was designed to harmonise with the surrounding bay villas and so imitated their roof line, hence the name "The Gables". The building covers only around half of the site, and a large block of bare land at the rear, accessed off Kelmarna Avenue, was used for customer parking.

Prior to The Gables being built, pubs had a bad reputation not helped by New Zealand’s six o'clock closing culture which prevailed until 1969. The Gables was intended to be a more civilized, new type of English-style neighbourhood establishment with outdoor facilities where family groups and friends could socialise along the lines of continental European beer gardens.

The Gables Tavern was popular for its quiz nights and as a performing venue for jazz musicians but changing tends in hospitality saw it become a Speight’s Ale House in 2010 before eventually closing in 2014 - a victim of the swing towards generally smaller beverage and food outlets in strip or laneway "cluster" locations such as Ponsonby Road.

The property is a block away from New Zealand’s most expensive residential street, Cremone Street. An analysis done by CoreLogic for the Herald based on Auckland Council Rating Valuations released late last year, shows the street has a median RV across its 14 properties of $6.3 million. In second place is Stack Street, around the corner from Cremorne Street, jumping from Auckland’s seventh most expensive street in 2014 based on council valuations. Its seven properties have a 2017 median RV of $5.6 million.

Bayleys Research’s latest analysis of the Ponsonby and surrounding residential suburbs - including Herne Bay, St Marys Bay, Grey Lynn, Westmere and Pt Chevalier - shows transactional volumes have picked up following an easing in activity in the lead up to September’s election last year.

"Ponsonby and surrounding suburbs experienced a sharp rebound in the last three months of the year, with sales activity increasing by 29% from the September quarter, although still down on the final quarter of 2016," says Ian Little, Bayleys Research manager. "We are expecting this momentum to continue in 2018 with centrally located dwellings close to the CBD and public transport remaining in strong demand in our increasingly congested city."

The REINZ median sales price for Ponsonby and surrounds finished the 2017 year at $1,522,000, up 2.5% from the prior quarter and 9% over the year. Ian Little says this is a good result given that prices in many Auckland suburbs have either plateaued or edged backwards.

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