Getting the right mix crucial, say Terrace Junction developers

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Don’t expect to find residential or industrial tenants in Queenstown’s newest retail/office complex.
Lindsay Williams, who with wife Di has developed the Frankton roundabout’s $25 million Terrace Junction, says some commercial areas of Queenstown have “a confusing jumble of incompatible businesses”.

“They have residential, retail, commercial and industrial activities alongside each other.

“This is unusual and frankly does nothing to strengthen each individual business’s branding and offering.
“It is also confusing for customers and surely has an impact on turnover and profitability.”

Williams doesn’t identify those areas but he’s clearly fingering Glenda Drive, with its mix of retail, commercial and industrial spaces plus some upstairs residential accommodation. Queenstown’s Gorge Road Retail Centre may also be in his sights.

“We believe Terrace Junction sits comfortably alongside Frankton Village [opposite] in a convenient retail and commercial location that is easy to find, highly visible and entirely compatible with its neighbours.

“Accordingly, business will always do well in such a location over other mixed-use areas where there is a confusion of totally different business types.”

Glenda Drive developer Alastair Porter has some sympathy with Williams’s argument.

“It’s not fantastic to put medium- and small-format retail into industrial/commercial areas [like Glenda Drive].
“I think it’s confusing to people and the reason it happens is either because those people are looking for cheap rent and they’re locating themselves in the wrong place, or simply because they can’t find retail locations, and that’s not the problem in Queenstown.”

On the other hand, residential, retail and office uses go well together, Porter says.

Terrace Junction’s first stage opens about the middle of next month with two anchor tenants – a drive-through Burger King and Westpac bank.

The anchor tenant for the second stage, behind the BP Connect service station, will be a Subway outlet opening in late November.

Other businesses signed up include two more restaurants, a hairdresser, gift shop, optometrist and bottle store.
There’ll be parking for 125 vehicles, half of them underground.

All tenants are established operators, Williams says.

Much of the complex has already been let, apart from two ground-floor tenancies and some first-floor office space.

Williams won’t divulge rent levels but says they’re “very competitive with other new complexes and certainly not a barrier”.

The recession caused some prospective tenants to pause till the complex took shape, Williams says. “But we’re again getting strong inquiry.”

The developers are also blessed by location – about 25,000 vehicles a day use the Frankton roundabout from three different directions.

“It’s on the way to where everyone wants to go,” Williams says.

Arguably the developers’ biggest struggle was the planning process, which Williams terms “incredibly expensive and time-consuming”. They won Queenstown Lakes District Council consent to rezone the land, which they bought in 2003, but an appeal to the Environment Court by roading authority Transit – settled before a scheduled hearing – set construction back 12 months.

“There were also delays from an inordinate number of reports that had to be produced, sometimes to state the obvious.”

Williams accepts the need for controls but he’s adamant the Resource Management Act can be a serious brake on cost-effective development.