Flurry of CBD sales nears $45 million

5:00 AM Saturday February 28, 2015 Colin Taylor

The former Hotel Cargen at 8-10 Eden Crescent sold for $4.5 million.

A flurry of sales in central Auckland totalling close to $45 million and encompassing both freehold and leasehold properties have been concluded recently by Bayleys Real Estate.

Alan Haydock, Bayleys’ Auckland City & Fringe team leader who was involved in many of the sales, says there has been a noticeable pick up in the volume of small to medium sized CBD sales since the latter part of last year.

“This reflects an increase in investor, owner occupier and developer confidence in the CBD on the back of an improving business environment which is pushing vacancy rates down. A significant portion of a surge in development activity expected to occur in Auckland over the next few years is taking place in the central city which is also a positive sign and is adding to the vibrancy of the CBD.” 

Haydock says interest in city centre and fringe property covers all spectrums of the market from well tenanted investment offerings to vacant buildings and development sites. “In particular, there’s been an increase in the number of investors looking for opportunities to add value who are prepared to consider vacant and semi vacant properties and even buildings in need of seismic upgrading. This is a sure sign that purchasers see further upside in the market.”

The latest sales follow Bayleys’ sale last year of all four buildings in Spark’s head office complex in Victoria Street for close to $250 million.

The largest transaction undertaken by Haydock was a six level 2739 sq m mid 1940s constructed building on a 656 sq m site at 80 Anzac Avenue which was sold for $6,350,000, at an 8.4 per cent yield, to a Hong Kong investor. It is leased to private education provider Crown Institute of Studies for 12 years from October 2014 with two yearly Consumer Price Index rent reviews plus a market review in October 2019.

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The refurbished former Church of Christ Scientist buildings at 116 Symonds St sold for $3.6 million. 

Also selling nearby at 64-68 Anzac Avenue and69-71 Beach Road for $5.8 million were two five storey interconnecting character office buildings constructed in the early 1920s on separate freehold titles totalling 805 sq m. The 1418 sq m and 911 sq m buildings were partially leased with various office, retail and car parking tenancies producing annual income of about $480,000.  Mike Adams, who sold the property in conjunction with his Bayleys Auckland colleagues Nigel McNeill and Quinn Ngo, says the purchaser will occupy some of the vacant space and endeavour to lease up the balance.

Haydock says there is also good demand for character CBD buildings from both investors and owner occupiers. He sold an historic eight level 2991 sq m building, constructed as the Hotel Cargen in 1920s, on a 463 sq m site at 8-10 Eden Crescent with vacant possession for $4.5 million. The building, which had been seismically upgraded to 70 per cent of New Building Standard (NBS) with plans drawn up for conversion to character apartments, was purchased by an add value investor.

A 602 sq m building at 116 Symonds constructed in the 1930s as the Church of Christ Scientist, and converted and extensively refurbished in 2003 to provide ground floor and mezzanine character office space, sold for $3.6 million. On a 579 sq m site on the corner with St Martins Lane, the building has 13 secure basement car parks and a Auckland Council Heritage B rating. Phil Haydock, who sold the property in conjunction with Alan Haydock, says it was purchased by an owner occupier intending to use it as a gallery and as performance space.

The CBD sales have also included a number of leasehold transactions. One of Viaduct Harbour’s longest established taverns, O’ Hagans Irish Pub, located on a 395 sq m leasehold site at 103 Customs Street West was sold for $2,250,000 at a 7.5 per cent yield by Damien Bullick and Alan Haydock. O´Hagans has occupied the building since 2001 and is considered to be one of the most established and proven hospitality providers in the Viaduct precinct.

He says the low yield for a leasehold property reflects the strength of the waterfront location and the occupant, but particularly the fact that the tenant pays all outgoings including the ground rental payable on the property’s leasehold tenure. He says the purchaser also has interests in the hospitality sector which provides options given O´Hagans initial 16-year lease term comes to an end in December 2017 with only one five-year right of renewal.

By wayof contrast Bullick and Haydock sold a425 sq m leasehold office floor at 16 Viaduct Harbour Avenue, plus five car parks for $525,000 at a 16.4 per cent yield. It had a six year lease from March 2013 to commercial law firm Burton & Co, but with a break clause after three years. It was producing net rental of $86,203 a year with a non recoverable body corporate levy of $73,680 including ground rent.

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The building housing O’ Hagans Irish Pub at 103 Customs Street West sold for $2,250,000.

Nearby at 14 Viaduct Harbour Avenue, a 312 sq m leasehold office floor with four car parks sold with vacant possession for $800,000 through Matt Gordon and Paul Hain of Bayleys Auckland.

Recent CBD development sales have included the sale of a  522 sq m bare land site zoned Strategic Management Area at  73-75 Victoria Street West, on the corner with Federal Street opposite the Sky City complex, for $7 million. It was sold by the Chow Brothers to Conrad Properties Group for residential development.

Colin McKenna of Bayleys Auckland who negotiated the sale says additional air rights also purchased add significantly to the buildable space on the site. Conrad is intending to build a high rise tower called Victoria Residences, comprising 161 apartments plus nine shops, and on its website is reporting 49 apartments under contract in the first four weeks of marketing.

A 748 sq m Special Management Area 3 zoned site at 52 Sale Street sold for redevelopment for $3,750,000 through Alan and Phil Haydock and Cameron Melhuish of Bayleys Auckland. Alan Haydock says the property comprises a 1950s  constructed 656 sq m vacant warehouse and office building, previously occupied by an engineering tenant, which is one of the last remaining older style industrial buildings in Sale Street. “Sale Street has undergone a transformation over the past decade from a predominantly fringe city warehousing precinct to a thriving and highly sought after commercial and residential precinct with a good mix of eclectic office, residential and food and beverage premises.”

Alan and Phil Haydock also sold a fully leased 537 sq m two level warehouse and office building with secure covered parking for 11 cars at 41 Sale Street for $1,950,000 at a 6.7 per cent yield. The sale included a Future Development Unit on a separate title which enables further floor area to be added at Level 1 of the building over the ground floor car park.

Phil Haydock says strata titled, full and part office floors within the CBD also remain popular with both owner occupiers and investors and can be acquired at a significantly cheaper per square metre rate than CBD apartments.


Recent Bayleys’ sales in this sector of the market include:  


  • 7/175 Queen Street, Auckland CBD – a  408 sq m floor sold with vacant possession for $908,000 through Millie Liang.
  • Level 7, 2 Emily Place, Auckland Central – a full 225 sq m floor, recently refurbished, with 9 sq m deck plus basement car parking, which sold vacant for $790,000 through Melhuish and Bullick
  • Level 14, 126 Vincent Street, Auckland CBD – a 248 sq m floor with three car parks sold vacant for $675,000 through Phil Haydock and Bullick.
  • Unit J, 23 Dacre Street – a 177 sq m unit with three car parks that sold vacant for $535,000 through Kate Kirby.
  • Unit 8A, 17 Albert St, Auckland CBD -  this 116 sq m unit leased to Trinity Chambers for three years with final expiry in April 2015 sold for $304,000 at a net 10.6 per cent yield through Phil Haydock.

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Alan Haydock of Bayleys Auckland.