City characters offering space for sale

5:00 AM Saturday November 28, 2015 Colin Taylor

The historic St James Theatre at 28 Wellesley St, Auckland, in which ground floor retail space is for sale.

Retail space within Auckland CBD’s historic St James Theatre complex is being marketed by JLL along with an entire standalone city character building in Lorne Street.

“The retail unit for sale in the St James is on the ground floor of one of Auckland’s most admired heritage buildings,” says John Binning, director of capital markets at JLL, who is selling the retail and showroom space within 28 Wellesley St via an expressions of interest campaign closing at 4 pm on Wednesday, December 9.

“Built in 1913, the St James Building is rich in history starting as the first YMCA in New Zealand and later housing the offices of the Auckland District Health,” says Binning. “In the mid-1990s the building was converted and refurbished to provide upper level apartments which are now highly sought after by residents seeking classical living.”

The 139 sq m retail unit, with one lower ground level car parking space, incorporates two adjoining strata titles as the one premises and is occupied by J K Coffee Limited which trades as the well-known franchised specialty coffeehouse company, Gloria Jean’s. The current contract rental is $60,000 per annum plus GST with a final lease expiry on October 31, 2029, subject to two rights of renewal.

Also occupying retail space on the ground floor of the St James’ building is art gallery tenant, Gow Langsford Gallery.

“This is a highly attractive investment property with a long term lease in place to a well-known quality franchise,” Binning says. “Another drawcard is its strong location profile – having dual frontages to both Khartoum Place and Kitchener St directly opposite the Auckland Art Gallery.  

“The premises would suit a variety of commercial occupiers being situated only a short walking distance from Queen St, the University of Auckland and Albert Park,” he says.

The property occupies a corner site on Wellesley Street East and Kitchener Street in an established city commercial area which is characterised by a mixture of modern and older styled buildings used for a variety of purposes including residential accommodation, offices, retail outlets, restaurants and bars.

The building’s north face is to Khartoum Place which is a popular pedestrian link between Kitchener St and Lorne St.

“The recent rejuvenation of Khartoum Place adds further amenity to this incredibly busy retailing location,” Binning says. “With increasing activity this retail unit is in a prime location with the potential for higher rental income as an investment property in the future.

“Very few landmark buildings remain that have become a permanent part of Auckland’s history so opportunities to acquire distinctive space like this rarely come to the market.”

The site is zoned within the Queen Street Valley Precinct under the Auckland City Operative District Plan with an aim of enhancing the precinct while maintain its character nature. The St James Building is classified Heritage category B.

Also for sale through JLL is a fully occupied five-level refurbished city character building at 26 Lorne St that Binning is marketing the property for sale via an expressions of interest campaign with the same closing date as the St James’ space at 4 pm on Wednesday, December 9.

True Commercial - 26 Lorne St.jpg

The five-level refurbished city character building for sale at 26 Lorne St, Auckland

“This historic building with four above ground levels and one basement level is estimated to have been constructed in 1925,” Binning says. “It underwent an extensive refurbishment in 2008 and now contains readily lettable retail and office space.

“Located in a convenient Auckland central business district location with multiple tenancies, it offers investors a strong rental income and a strong weighted average lease term of about five years.

“The site also has long-term redevelopment potential with the future possibility of constructing a high-rise building.”

Binning says a range of activities are permitted under the current zoning that include accommodation, food and beverage, education, industry, retail, offices and commercial services.

“The six tenancies within the building are on varying terms with the leases having provision for inbuilt rental growth,” he says.

The basement level of 192 sq m is fitted out as a nightclub and bar and is leased to Richbaby Bar and Entertainment.  Situated on the ground floor is an entrance foyer which is accessible off Lorne Street and provides access to the upper levels and basement. Occupying the 228 sq m ground floor within this second building again is art gallery tenant, Gow Langsford Gallery.

Three levels above the street level provide high quality character office accommodation.

Level one of 266 sq m is split into two tenancies leased to Network Communications and art hire and consultancy, Artt Limited.

Level two of 292sqm and is occupied by Auckland's city centre business association, Heart of the City while Level three of 294 sq m is leased to criminal defence barristers, Lorne Chambers.

The building’s 1272 sq m of total net lettable area generates a net rental income of $446,273 per annum.

Binning says the building provides an opportunity for space flexibility and creativity which appeals to tenants seeking alternative workplace environments.  

“There is a high demand for this type of character asset in Auckland’s CBD and a significant proportion of the city’s office space is situated within this precinct. Lorne Street is formed around the Queen Street corridor which has a strong emphasis on retail activities and it is fast becoming an increasingly fashionable retailing scene.”

The Lorne St building occupies a commercial site of 359 sq m which is zoned Strategic Management Area 1 under the Auckland City Council District Plan.

Binning says the objective of this zone is to maintain the highest intensity of activity in the central area, emphasising commercial, entertainment, recreational, cultural, retail, residential and tourist activities. “The aim of the precinct is to encourage activities which will enhance the vitality and interest of the precinct while still retaining the heritage nature and character of the precinct,” he says.

“With character buildings in high demand, landlords are being rewarded for the capital they have spent refurbishments and available space to lease is attracting quality tenants.”

An abundance of public car parking is within a short walk of the site including the Victoria St Car Park building and the nearby Kitchener St Car Park building.

“Access to the motorway is close at hand via Wellesley Street East or Grafton Rd and Queen St is a short walk away.”

John Binning, of JLL.jpg

John Binning, of JLL.