Sitting or standing, it's a great chance

2:31 PM Saturday June 7, 2014 Colin Taylor

Brian Ward with a "sit/stand" desk in the Nelson St building, which is for sale.

A central Auckland commercial property with a new lease to one of New Zealand's largest office furniture suppliers and offering longer term redevelopment potential is for sale as part of Bayleys' latest Total Property portfolio.

The three-level building on a 948sq m site at 118-122 Nelson St is being marketed by Rob Cross of Bayleys Auckland by tender closing on June 25 unless it sells earlier.

The property is being sold with a new six year lease to Systems Office Furniture, producing net annual rental income of $412,440-plus gst with built-in rental growth provided by three-year rent reviews tied to the Consumer Price Index.

"It is hard to find opportunities like this to secure a standalone freehold property in the central Auckland commercial market," said Cross.

"It is in a strategic location, where a substantial amount of new development is under way and is fully occupied by a leader in commercial office furniture and fit-outs in Auckland, with a reputation built up over more than 30 years in business."

Systems Office Furniture, now trading as Systems Commercial, was established in the 1980s by owner and managing director Brian Ward.

He says the Nelson St premises provide one of New Zealand's biggest commercial furniture showrooms and enable the company to showcase the most comprehensive range of technologically advanced office furniture in New Zealand including its "sit/stand" desks.

"Concerns about the health effects of sitting hunched over a computer for too long have also prompted increased demand for 'sit/stand' desks on which height can be adjusted at the push of a button," Ward said. "Office workers are likely to continue to spend most of their day seated but these desks offer the option of spending some time standing.

"They seem to be popular with staff and we're getting good feedback on them despite the fact that they are obviously more expensive than a standard desk."

Two of the more unusual products on the company's website are a treadmill desk and a bicycle desk at which staff can work and "work out" at the same time.

"Less is more in current interior design trends," Ward said. "Companies are moving away from big, chunky office partitioning and large corner work stations to simpler, more streamlined desks accommodating four to eight people with lower partitions and brighter colours or clear screening."

Systems Office Furniture was in Newmarket for nearly 20 years before moving to the central city, where many of its clients are based.

It occupied a building on the corner of Fanshawe St and Halsey St until that was demolished last year to make way for Fonterra's new head office.

The firm made a comprehensive evaluation of other nearby premises with Cross, who heads Bayleys' CBD office leasing team, before settling on 118-122 Nelson St. "It is ideal for what we require," Ward said. "First and foremost it is in a great location with high profile exposure to the huge volume of traffic that goes along Nelson St. It is also close to all the major motorway connections which provide easy access to us for customers from other parts of Auckland. And it has very good parking for our clients on the lower level of the building which is not easy to find in the CBD.

"It is also a well constructed, solid concrete building with good natural light and although it required quite a bit of work to reconfigure it for our purposes, it has been well worth the effort."

A full refurbishment and upgrade involved ripping out former office space and opening up the two main floors for showroom use. Previous floor coverings and three millimetres of tar were stripped off exposing the original concrete flooring which was restored and polished.

"Systems Commercial has completed an outstanding job in transforming what was a fairly run down, vacant building into modern, immaculately presented showroom premises and lifted the profile of the property in the process," says Cross.

A secure basement area provided parking for up to 23 cars and was designed to allow easy turning and parking.

The 680sq m second level contains the main showroom, and the top level of 664sq m has a mix of showroom and storage space plus two balcony areas with sea and city views.

It is connected via a ramp to a rear car park for a further 12 vehicles and yard area accessed off Warimu Place which enables loading and unloading of stock and container storage.

Systems Office Furniture Ltd has two three-year rights of renewal from the expiry of its six year term in June 2020. After this, a development clause allows the landlord to terminate the lease with 12 months' notice.

"This provides the best of both worlds for a new owner," said Cross. "The initial six-year lease term will provide more than $2.5 million in income, there is then the option of redeveloping the site at a time when the area should be buzzing from nearby new development projects."

These include the nearby SugarTree mixed-use development at 145 Nelson St, the first stage -- the Prima building containing 148 one- to three-bedroom apartments and 15 ground floor commercial units -- is being built. The completion of all three SugarTree stages will create about 600 apartments plus ground floor commercial units around a green courtyard with water features.

Further up Nelson St, the old city works depot site has been made over into a mix of eateries, bars and character office space, and across the road from that site, a $400 million SkyCity international convention centre is to be developed on the corner of Nelson St and Wellesley St.

The land at 118-122 Nelson St falls within the CBD's Strategic Management Area 3 -- Victoria Quarter zone which allows for a build height of up to 50m, with a basic site density of 4sq m of building to 1sq m of land.

Cross says the zoning permitted a variety of commercial and residential uses. Ward says the property has enough space to cater for the future growth of Systems Commercial as demand for commercial furniture and fit-outs rises because of an improving economy and increasing leasing activity.

"Larger corporates and the big professional firms are spending money on their premises again as competition to secure and retain staff heats up.

"An attractive, healthy working environment is an important consideration for employees."

In addition to marketing a wide range of commercial furniture products and services principally for the office market, Systems Commercial also caters for cafes, restaurants, hotels, motels and education providers.

"We handle everything from coat racks and bins through to full office fit outs and commercial projects," says Ward.

Much of the furniture is imported but it includes custom-designed products made at industrial premises in West Auckland where a team designs reception areas, kitchens, bathrooms as well as office floors.

"Concerns about toxins such as formaldehyde in furniture have contributed towards a shift towards products with steel and aluminium bases," Ward says.

"Green buildings are also back in focus, which has brought an increased demand for recyclable furniture that earns green points and which have sustainability ratings such as a Forest Stewardship Council certification."