Field of Dreams: The Neil Group’s Albany Centre strategy

Instead of selling off disparate blocks of land to all-comers, The Neil Group had “big” plan for its Albany turf. Based loosely on an Australian example and encouraged by Auckland’s favourable growth demographics, the developer envisaged building “city within city”.

What the demographics told The Neil Group was that, based on growth projections in both Albany and to the north in the adjoining Rodney District, the region lacked commercial and retail development. Being able to design and build city from big picture perspective, rather than the ad-hoc growth most cities experience, presented huge advantages, says special projects manager Phil Ainsworth.

Initial feasibility studies on the Albany site helped gauge retail and office requirements in general terms. Different scenarios were then drafted using cash-flow analysis to forecast range of different outcomes. The project was then managed to ensure forecast outcomes were achieved within their respective time frames. But with the overall project expected to take 15 years to complete, detailed planning would be rendered obsolete over time. So, says Ainsworth, the Group’s risk and return profile on the site was always going to be moving target.

The key early concern was to get sufficient building activity going on which to create future momentum. Three key factors contributing to that momentum were:
* Massey University’s Albany Campus: Located adjacent to the Albany Centre, it currently has 4300 internal students and this is expected to increase to 15,000 in coming years.
* North Harbour Stadium: An integral part of the Albany Centre, it’s multi-purpose entertainment and sporting venue.
* Northern motorway development: While two interchanges into the northern motorway were yet to be built, they knew it would happen eventually.

Developers like Neil prefer to be involved in the design and build phase before sites are on-sold. But in an attempt to get stake in the ground, it opted to sell bare land for what would become two initial anchor sites: Pak’N Save (the largest supermarket in Australasia) and the site’s first retail development, The Mega Retail Centre. The developer also agreed to sell bare soil to mall operator, Westfield’s (formerly The St Lukes Group) for what could be New Zealand’s largest mall.

Laying groundwork
The Neil Group initially concentrated on creating the infrastructure – roads, services, trees, greenbelt and other necessary amenities – to attract developments into the centre. Charged with overall responsibility for the Albany Centre, Ainsworth’s job was to assign and direct core team of five who met weekly to discuss outstanding issues.

Each member was assigned responsibility for key aspects of the project. Because the formerly rural land encompassed multiple titles, each with differing zoning criteria, the team’s first job was an exercise in subdivision and rezoning.

With seven types of zoning, ranging from Business four (retail core) to Business 11 (allowing for high density residential) – subdividing presented its own challenges. Much of the team’s early efforts were spent dealing with resource consents and complying with environmental codes. In fact, the current zoning on the overall Albany Centre site is the result of submission process that’s taken nine years to finalise.

Ainsworth and his project co-manager, Keith Maddison, are now, however, charged with selling the Albany Centre vision to the business community. And because the team was dealing with numerous people from several regulatory bodies simultaneously, the two managers decided that regular information sharing would play an important role in both communicating the vision and streamlining comprehensive site development.

Spend time planning
With the Albany Centre concept now well advanced, how has the project management approach changed?
Much of the team’s time is now spent on identifying development opportunities and dealing with resource consents for each new project. “Once developments are committed to paper, it’s the job of individual development project managers to oversee the building leasing and selling phase,” says Maddison.

Doing this properly is not rocket science. But, says Maddison, ensuring as much information as possible is supplied to the local authority upfront, helps in processing consents quickly. Plans haven’t changed much since day one. But the biggest revelation so far, according to Maddison, is the success of the businesses that have established at the Albany Centre.

So has taking on such massive undertaking affected the management of The Neil Group’s overall business? “We can’t ignore the other areas of our business that we’re involved in. But we’ve had to change the focus of our activities onto Albany as our largest single investment,” adds Maddison.

Lessons
After 10 years of development at the Albany Centre, what stand out as the major lessons? “Spend time strategising and then working to strategic plan. Remain as flexible as possible to incorporate new ideas,” says Maddison. And ensure strong funding base. Fifty years’ experience in subdivision work, together with the financial strength of the company’s Malaysian owners, the Tiong Group, helped establish good working relationships with funders.

“With long-term project such as the Albany Centre, it’s important to avoid the pressure of selling down the asset in too short time frame. This will not realise the best return for the shareholders.”

Growing development at the Albany Centre has meant stepping-up the communication exercise. In fact, relatively new marketing plan is designed to show potential businesses what they’re buying into – while keeping the community abreast of what’s happening on the site. new display centre in Northridge Plaza shows the community how the centre has been planned and what it will look like when completed.

The Joondalup experience
Much of the thinking behind the Albany Centre was taken from an Australian example – the Joondalup Centre in North Perth. “We didn’t buy the Albany land believing that what worked successfully there would work here. But the overall design was based on similar layout and the best aspects of the Joondalup Centre,” says Ainsworth.

The Neil Group liked Joondalup’s unique design approach. “We were able to include much greater provision for parking, transportation, communication technology and traffic flow considerations than if it had been an unplanned appendage to an existing city,” says Ainsworth.

The Joondalup example helped the Albany Centre planners to cater for broader human and environmental needs within the initial development work. The other major take away was realisation that they could deliver greater synergy for occupiers and greater access for users if they gathered like-minded services into precincts within the overall complex.

Synergies through clustering
The idea of clustering similar services into eight precincts spanning: retail, community affairs, transport, leisure, business, health, residential and technology, was all about creating sufficient critical mass. Once one major player committed to the Centre it was easier to attract others.

“The proposed Centre of Health is an example. primary care building will include: GPs, radiology, medical lab, dental services, and pharmacy – all in one. Nearby will be consultancy rooms, and suites, with an accident and medical clinic. Further down the track, there’ll also be rest home and maternity hospital,” says Maddison.

While commercial precincts are zone-specific, end users are not duty bound to locate within those predefine clusters. “All we’re trying to do is provide the appropriate environment for certain types of commercial activities. We recognised early on that if each precinct became too sector-specific, the overall centre could become too sterile. Because the city centre allows for whole range of interactive users, how the

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