With Auckland’s population increasing by 40,000 people annually, and an underspend on infrastructure over the past few decades, the city is currently facing a real case of growing pains.
As Auckland grapples with this growth, urban intensification at key transport nodes and master-planned town centre developments are destined to be a big part of the city’s future under the Auckland Unitary Plan.
Places like Westgate and New Lynn in the west, Sylvia Park in the east, Albany in the north and Manukau in the south are no longer just retail hubs. They are becoming genuine mixed-use destinations and satellite town centres providing the proverbial ‘live, work and play’ offer.
As these hubs develop, employers and businesses are taking note. In recent years an increasing number of occupiers are adopting a hub-and-spoke approach to their property needs, moving part of their operations to these locations.
Tightening vacancy rates in the CBD and the lure of potential cost savings are helping to drive the trend but, as Omri Yahel, Associate Director of CBRE, says, it is also being driven by a more developed awareness by employers about the needs of their employees.
“Rather than a default strategy to be in the CBD at all costs, occupiers are taking a more realistic appraisal now of those benefits. As house prices increasingly force people out of the city centre, the daily commuter grind into the CBD is only becoming worse. So, when offered a strong retail precinct with convenient services, easy access to transport and quality parking facilities, the benefits of being in these new nodes are providing a real alternative to being in the CBD.”
A case in point is IAG. The insurance provider is in the middle of a huge property project that will see a reduced presence in the city centre and a consolidation of branch offices across the region, with the move of over 700 of its employees to Sylvia Park and Albany.
Property Manager Bev Hilton says offices in good areas close to where IAG’s people live is important, as it also provides a chance to consolidate service functions and align property strategy with business needs.
“We’re very siloed at present. Moving from nine leases across the region to three locations will encourage better communication and allow staff to get a better understanding of all the moving parts and functions of the business. We see this as being a huge positive in terms of more integrated service delivery and aiding the development of talent across the business.”
Hilton says staff satisfaction has also been a key driver behind the move with obvious upsides in being closer to amenities such as childcare and services from hairdressers to key cutters.
“With a more competitive labour market, any improvements in wellbeing and happiness are key and locations that are easy to get to and allow people to fit in life around work are going to be attractive.”
Another corporate to announce a similar shift to Sylvia Park recently is ANZ, which will be moving primarily call centre functions to the new No.1 Sylvia Park commercial building. Another of the more high-profile moves in recent years saw telecommunications giant Vodafone shifting all its Auckland-based staff to one location in Smales Farm.
Above: Light Festival at Smales Farm
While it may have been a surprising move for some, for the Chief Executive of Smales Farm, Paul Gunn, it is simply a reflection of what’s happening internationally.
“If you spoke to some people about the Vodafone move, asking why they are going there, there used to be a sense that the North Shore was so far away and conducting business outside the CBD was hard work. “Those views are dated now, and for Vodafone having its Auckland business located in the city centre was more of an anomaly from an international perspective, as most of its offices across the globe are located in city fringe locations or in satellite centres.”
Gunn says from a landlord’s perspective it all comes down to a recipe of great public transport and diversity of offering to meet the needs of those that work there.
“Internationally, business parks are a thing of the past. What we’re trying to create is a next generation neighbourhood comprising multiple layers such as – cutting edge buildings, huge levels of amenity, food trucks, licensed green areas, destination eateries and a high spec gym on-site. Placemaking and activating spaces is also key. Events like our wine and food festival, outdoor movies and concerts last summer have been great in terms of growing the community within the location but also creating destination for those that don’t work there.”
Above: Food trucks at Smales Farm
For Gunn, the next step is to create a residential offer at Smales Farm with the planning process now underway to make that happen. With Council’s greater focus on growth nodes and transit-orientated development like Smales Farm, the attraction for businesses and occupiers is only going to become greater.
