- Auckland’s $300m Seascape tower is listed for sale “as is, where is”, raising future questions.
- Demolishing the 56-storey building would be complex and costly, but completion is the preferred and likeliest option.
- Strong interest exists in finishing the tower, with hopes it won’t remain unfinished indefinitely.
Auckland’s $300 million Seascape tower in the CBD would be tricky and costly to pull down, but doable, a demolition expert has told OneRoof.
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No one has seriously suggested that the 56‑storey building at 69-105 Customs Street East is for the wrecking ball, but the property has been listed for sale “as is, where is”, renewing questions about its future.
Those OneRoof interviewed about the Seascape admit that completing the high-profile development would be challenging for a buyer, but note that demolishing it to start over would be almost prohibitive.
The Seascape was launched to much fanfare almost a decade ago, with developer Shundi Customs promising it would be at 187m, the country’s tallest residential tower.
But the project went awry, and now risks joining the ranks of abandoned towers around the world, from Los Angeles and New York to North Korea and China.
OneRoof reported on the Seascape listing last week. The tower is part of a 2729sqm block, which also includes the heritage Britomart Hotel, known as the White Rabbit; and Ballantyne House.
Auckland Regional Chamber of Commerce CEO Simon Bridges: “There is no doubt Seascape has been an incredibly sorry saga for those involved. They probably rue the day they ever got involved in it.” Photo / Dean Purcell
An artist’s impression of what the 56-storey Seascape would look like once completed. Photo / Supplied
The Seascape penthouses were pitched to buyers as the ultimate statement in high-rise living. Photo / Supplied
Bayleys is selling 69-105 Customs Street East, in Auckland’s CBD, on behalf of receivers Calibre Partners, following the collapse of Shundi Customs.
Agents are hopeful the tower will be bought and completed, not demolished, saying there is already strong interest from New Zealand and overseas interests.
Bayleys head of commercial property Ryan Johnson told OneRoof last week: “The interest to date has been incredible, globally and domestically, around picking up the project and finishing it off.
“Basically, someone will close it in, in terms of weather-tightness. Someone ultimately will finish it.”
He added: “In terms of structural integrity and what have you, there are no issues there. It’s been monitored weekly by the council and the receivers.”
There had been publicity around some flaking paint, but “nothing structural, nothing falling down”.
Completion is also the hope of Auckland Mayor Wayne Brown and Simon Bridges, chief executive of the Auckland Business Chamber.
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Bridges told OneRoof in an email: “There is no doubt Seascape has been an incredibly sorry saga for those involved. They probably rue the day they ever got involved in it. But if there is one glimmer of light, it’s the thought that with its listing, it might actually still happen.
“Some other very high-profile towers in our CBD have had financial and construction problems – big ones – prior to completion. Yet when they are done, they make our city much better. This could still be the case here.”
A downside risk for Auckland was also very apparent, Bridges said: “That the thing sits there far from finished for ever and a day, the way you see in much of the developing world. We certainly don’t want that. Auckland deserves resolution sooner or later.”
Peter Ward, managing director of Ward Demolition, said demolishing the Seascape would be complex and expensive – but probably simpler than the demolition of the 28-storey Hotel Grand Chancellor in Christchurch following the earthquakes there in 2011.
That building cost about $10m to bring down, and demolishing the Seascape would likely cost considerably more, but “anything you build you can de-build”, he said.
“They built it up – you’re just going to reverse engineer it. The last piece they put on there with the crane will be the first piece that probably comes back off.”
The building was safe for a few years, but the longer it was left, the steel and other components would degrade, he said.
Experts believe demolishing the Seascape would be a costly exercise. Photo / Sylvie Whinray
The tower has been a feature of the Auckland skyline since construction began in earnest in 2019. Photo / Supplied
Andrew Crosby, managing director of Xpect Property, kicked off a conversation on LinkedIn last week following OneRoof’s reports on the listing.
He wrote that he had been told it could cost $60m or more to demolish the building.
He explained to OneRoof that just because there was a half-built skyscraper in place did not mean it had value in the current market, and there was a risk that it would not sell – even for $1.
Demolition imposed a negative land value on the property, meaning the land was worth less than the cost to demolish to get back to vacant land. “There are examples of skyscrapers overseas, like in LA, that have gone nowhere because of the very same situation.”
He also said there were risks in “taking on someone else’s work – that’s a whole other animal”.
Matthew Blomfield, a business consultant who works in the crisis “fix-up” space, thought there was an opportunity for someone to complete the Seascape because of the work already done.
“I don’t think people should underestimate the amount of work that goes into planning, getting started, and actually kicking off a project of this size,” he said.
“The question that I haven’t seen answered yet is, ‘what would it actually cost to finish this job?’.”
With a background in insolvency situations, Blomfield had picked up half-finished projects and managed them through difficult questions around producer statements, consents and engineering. “Sometimes it’s complicated, but not as complicated as you think it would be.”
Bayleys head of commercial property Ryan Johnson: “Someone will close it in, in terms of weather-tightness. Someone ultimately will finish it.” Photo / Fiona Goodall
He said there were challenges to starting midway through a project. “You can spend a couple of million bucks just looking at documents and deciding what the next steps are, so the barrier for entry for most people is just finding someone who will go, ‘I’m willing to invest hundreds of thousands of dollars, if not millions, to understand how we get from today back to guys on the ground building’.”
Even buying the building for $1 would throw up issues. “The kind of person who would buy it for a dollar is not paying a dollar. It will look interesting on paper when you say, ‘Oh, I bought it for a dollar’, but you’re actually buying it for a dollar and inheriting huge liability, so your purchase price is not a dollar; it’s just a number people are throwing around.
“I’ve watched a bunch of really bright people over the last 30 years get it really wrong, because it’s complex. It’s not easy. If it were easy, we’d all be trying to build skyscrapers and make billions.”
Mike Woods, Auckland director for Prendos Surveyors, said he had no idea about costs, but was curious about what might happen with the Seascape. “You’re going to need all kinds of investigations: What’s the quality of the work? Is it actually compliant? If you can’t see things, what do you have to do to get those satisfactory inspections?”
Due diligence, he said, would include finding out what compliance documents were in place, and that would likely cost a couple of hundred thousand dollars, but those were expected costs for a purchaser.
“It’s information you absolutely have to know. It might cost you $200,000 to find this out, but that information is worth millions.”
Receivers Calibre Partners has tapped Colliers to sell Shundi Customs’ 9.6ha mixed-use site at 261-265 Morrin Road, in Auckland’s St Johns. The site was formerly owned by Auckland University. Photo / Supplied
The Bank of China has appointed a different receiver to work with Bayleys to sell Shundi Customs’ 2.31ha site at 255 and 259 Morrin Road, also in St Johns. Photo / Supplied
Woods said a project like this would live or die on the information available, but he warned that projects failed all the time due to unforeseen circumstances or a lack of resources.
“It’s a commercial venture that hasn’t panned out. It happens every day. It’s just more obvious when it’s right there on the waterfront. In the middle of the CBD, it stands out. If this were someone’s house in Ponsonby that they started building and couldn’t afford to finish, and therefore had to sell it off as just a partly built house, no one would mention it.”
The CBD is not the only area impacted by the collapse of Shundi Customs. Across town in St Johns, the site of the former Auckland University Campus is also on the market. The company had planned to turn it into a master-planned community.
Colliers listing agent Josh Coburn said initial inquiries about the 9.6ha mixed-use site had been strong. The property was desirable, he said, because it was one of the few genuinely saleable mature catchments of residential land in Auckland.
“We are advertising it for sale as one or in parts. It’s a large site, and there are certainly parties who can purchase the whole thing as is, but there are [others] who would prefer to purchase chunks of it and might pay marginally more for the ability to do so.”
The seven university buildings on the site had considerable value. They had been vacant for a decade and needed money put into them, but had good bones, Coburn said, and some parties were exploring whether they could be converted into apartments.
A third Shundi Customs property, 2.8ha at 255 and 259 Morrin Road in St Johns, was also up for grabs.
Bayleys agent Layne Harwood said the site was also part of the former university campus and was being marketed by a different receiver appointed by the Bank of China.
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