Precinct Properties has postponed part of a $500 million development project on Auckland’s downtown waterfront amid a downturn in the residential market. The company announced it will proceed initially with the construction of a single 55-level tower, deferring work indefinitely on a second 45-level building until market conditions improve.

The taller tower will be dedicated exclusively to commercial office space, responding to demand from several new tenants, according to Precinct’s chief executive, Scott Pritchard. Groundwork and foundations for the second tower are planned but full construction will be delayed.

Originally, demolition of the existing Downtown carpark was scheduled to begin in the final quarter of this year, but this has now been pushed back by approximately four months, with work expected to start in April 2027. The demolition contract has been awarded to Built, which has been engaged for early contractor works over a 12-month period.

The second tower, which will remain on hold, is intended to include a 200-room hotel and 145 residential apartments. Precinct has cited sluggish demand in the residential sector as the primary reason for postponing construction of this block.

Pritchard noted the company’s decision to adopt a staged approach after monitoring the market for several months. “We’ve made the decision to take a staged approach,” he said, emphasizing the goal to complete the residential component at a later date when conditions are more favorable.

The announcement was included in Precinct’s full-year financial results released on Wednesday. The company’s strategy reflects ongoing challenges in the residential market, impacting the pace and scale of new developments in central Auckland.