Smith & Caughey’s Queen St store to be sold after closure

The board of retailer Smith & Caughey’s has sought proposals from big real estate agencies for the multi-million dollar sale of its flagship Queen St store in the heart of Auckland’s CBD.

The store had its final day of trading on Sunday June 15 after a “perfect storm of adversity”, including economic uncertainty, led to the decision to close it after 145 years of trading.

Board member Peter Alexander said: “The intention is to sell the property when the time is right. There is no hurry. There is lots of interest from agents but no decisions have been made by the company.”

Sale by tender is most likely, with three to four weeks for bids to be lodged in writing, agents say.

Closure has made the properties surplus to requirements. But rates are still due.

The board’s moves to sell could hardly come at a worse time.

Many properties are for sale in the CBD, some sites staying empty for decades – including the Royal International on Elliott St and the Auckland Star site on Fort St.

Widescale development of apartments has ceased and many older office buildings have vacant floors.

Demolition specialist Ripout NZ showed mid-July how it was removing fixtures and fittings in the ground-floor cosmetics areas.

Andrew Lamb of Galaxy Property said his business was managing the building, but he preferred to talk about that later this year or early next year.

What’s it worth?

Smith & Caughey Ltd owns the CBD properties and holds a number of titles.

They include 253-261 Queen St, whose title was issued in 1965.

It has a capital value of $39 million and annual rates of $283,000.

The property is made up of 2946sq m of land worth $35m and 1.3ha or 1329sq m of floor space worth only $4m.

A second title at 20 Elliott St is a 1998sq m property and a third title at 9-11 Wellesley St is a 723sq m property.

All titles are under one CV.

Auckland Council holds no separate valuation or property information on the last two street addresses.

Smith & Caughey’s Queen St and Newmarket properties have a combined valuation of $53.5m.

The Herald reported last year that if the Queen St and Newmarket buildings were sold, the money could be expected to be paid to shareholders.

But nothing was said about the properties in last year’s closure announcement, nor about the trust’s future.

The company Smith & Caughey is owned by Smith & Caughey Holdings, whose registered office is at 253-261 Queen St.

Smith & Caughey Holdings was only incorporated in June 1988.

Smith & Caughey Ltd’s five directors are: Epsom’s Peter John Alexander; St Heliers’ Matthew Andrew Lovelace Caughey; Freemans Bay’s Simon Fraser Dunlop; Epsom’s John Nicholas Elliott and Remuera’s Michael Howell Holloway.

Historic buildings

Heritage New Zealand Pouhere Taonga lists the Smith & Caughey Building, Wellesley St West and Elliot [sic] St, as a Historic Place Category 1 building.

Category 1 historic places are of special or outstanding historical or cultural significance or value. The building was entered on to the list in March 1986.

One heritage website said Smith & Caughey’s Wellesley St extension with its south facade and north elevation dated back to 1927.

It was designed by architect Roy Lippincott, an American who designed a number of famous buildings.

What next for the property?

Some have suggested other retailers may be interested, including a supermarket operator, although that seems unlikely given the multi-level nature of buildings.

A city centre school, offices and apartments have also been put forward as other possibilities.

Apartments appear an unlikely prospect with so many already in town and the costs of conversion high.

Plans for the $400m St James apartments never rose beside the heritage St James Theatre on Queen St.

That empty site is understood to be up for sale.

Tamba Carleton of CBRE specialises in researching this area and is keeping totals of ditched schemes.

Expansion remains sluggish, data from this year’s first quarter show, although the build-to-rent sector is busy, Carleton has found.

John Love is yet to pay $3m for the ex-Civic Administration Building, owned by the Auckland Council. It was the authority’s headquarters but he converted it into 114 luxury apartments.

He rebranded that The CAB. Not all units are sold. The $16.5m penthouse and sub-penthouses remain for sale.

Only when Love repays a loan standing last year at $70m does he have to pay the $3m.

Are offices a possibility? Older office floorspace in that mid-town area is hard to lease.

Big corporates are instead drawn to new, big-floor-space, green-star-rated, environmentally efficient buildings developed by businesses such as Mansons TCLM and Precinct Properties.

Newmarket site

In Newmarket, Smith & Caughey’s traded from the heart of that suburb at a site near the end of Remuera Rd: the distinctive premises at 225 Broadway.

That title is owned by Smith & Caughey Ltd.

Council records show 219-225 Broadway is valued at $13.5m, has a land area of 1114sq m and a total floor area of 1846sq m. Rates there are $74,000/year.

Anne Gibson has been the Herald‘s property editor for 25 years, written books and covered property extensively here and overseas.