11 McDonald Street is a large site positioned on the corner of McDonald Street and Altham Avenue in Morningside. The site has seven connected buildings that were constructed between 1946 and 1970. The buildings provide warehousing and workshop accommodation for eight tenants.

The buildings are of varying age, with the original warehouse built in 1946, followed by an extension to the southern side in 1968 and a second extension to the eastern side in 1970. The building has received Detailed Engineering Evaluation rating of approximately 80% of NBS (as at October 2013). The site is located in an area that has been identified as subject to a 100 year flood plain and overland flow path by the Auckland Council.

The property is currently zoned for “Business 4” in the Auckland City District Plan and under the proposed Auckland City Unitary Plan would be zoned “Light Industrial”. Given the sites current and proposed zoning, its proximity to an increasingly popular residential area on the city fringe and the strong public transport links, as well as adjoining residential and mixed use zones, the site lends itself to a mixed use redevelopment.

The owners of the neighbouring properties with this same zone have applied to the Auckland Council for a re-zoning to “Mixed Use” as part of the proposed District Plan review and the Manager has now joined this application and made a submission to Council. The Manager has received advice that the chances of rezoning are good, particularly since the eastern boundary of the site is already residential homes. A decision on the rezoning application is expected in September 2016.

Value could be unlocked by achieving the zone change, and disposing of the property with the residual lease term in place as a future development opportunity with holding income, or the Manager could secure an early surrender of lease with the primary tenant, or alternately locate them to an alternative site to facilitate earlier redevelopment of the property within the expected life of the Fund.