Historic CBD landmark buildings on market
Night view of the T&G Building at 15-31 Wellesley St.
Auckland city’s Edwardian-era T&G Building is for sale along with the adjoining historic Reslau Building and the popular Elliott Stables ‘epicurean village’ which extends across the ground level of both buildings.
Both the T&G Building at 15-31 Wellesley St, on the corner of Wellesley St and Elliott St; and the Reslau Building at 39-41 Elliott St, are being marketed by Warren Hutt of CBRE who is selling them by deadline private treaty closing on Friday October 9 unless they are sold earlier by negotiation.
“This offering gives investors the chance to acquire a trophy asset in the regenerating uptown area of the city,” says Hutt.
“This is a significant investment proposition providing a strong and diversified income stream from several sources. The T&G Building is well-known Auckland landmark occupying a prominent position on a prime CBD corner.”
The combined property houses 26 separate retail tenants, 65 managed residential apartments and a backpackers’ hostel, contributing total net annual passing income of about $3.18 million.
“The property’s location is a big plus for attracting and retaining tenants, with the residential component of the building 100 per cent occupied and subject to strong demand,” Hutt says. “Elliott Stables is a popular dining centre well patronised by locals and tourists. Among the other tenants are the well-known Tony’s Steak and Seafood restaurant; and the Middle East Café.”
Having multiple and many long-term occupiers means the owner is not exposed to undue income risk should a vacancy arise, Hutt says.
“It’s in a buzzing city area where strong growth is underway,” he says. “Auckland Council, the government and private developers have made a strong commitment to the location, with major investment into key nearby projects including the City Rail Link, the Civic Administration Building, the Aotea precinct, the proposed convention centre and the Elliott St and Federal St shared spaces. The building therefore offers significant potential future value considering the planned improvements to the area.”
Exterior of the historical frontage of Elliott Stables at 39-41 Elliott St.
Hutt says CBRE also expects to receive interest from developers as well as investors.
The five-level T&G Building was designed by Thomas Mahoney and built in 1910 as a warehouse for Archibald Clark & Sons Ltd, a firm of warehousemen and clothing manufacturers. The original warehouse space is now the site of the Elliott Stables epicurean village.
Clark was the first Mayor of Auckland and also represented Auckland City constituencies in the House of Representatives from 1860 to 1870 and the Franklin seat from 1871 to 1874. At the time, the front sections of the building were occupied by local businesses including a health food depot, millinery, electrical shop and tearooms.
The Renaissance-styled building was purchased in 1928 by the Temperance and General Mutual Life Assurance Society (T&G) for its Auckland branch. The company remodelled the building and added its distinctive two-story high tower. When the tower completed in 1930, the T&G building was a prominent feature of the early 20th century Auckland skyline and is thought to have been the tallest structure in Auckland at the time. Two floors were occupied by T&G with the remainder leased out to retailers and office occupiers.
“Very little of the building’s external appearance has changed since those days,” Hutt says.
“Heritage New Zealand has classified the building as a Category 2 Historic Place, recognising the historical significance of the property. However, this status only covers certain elements of the building and does not preclude the owner undertaking further development.”
Included in the property package, Reslau House was built in the 1890s above what is now part of the Elliott Stables, along with character office space on the upper floors.
Today, the property is owned by private investors, who purchased it in 2001 and were responsible for the creation of the popular Elliott Stables. The owners also converted the office space on the upper levels to boutique apartments.
The building occupies a 1783 sq m corner site spread across two titles in a ‘tried and true’ commercial and retail area that is a centre of renewed attention, says Hutt.
“This property’s location, positioned between the Smith and Caughey’s department store and Auckland Council’s building on Albert St, has been constantly popular over the years and is now receiving council investment which is spurring renewed interest and regeneration.”
Hutt says the building has been very well maintained and cared for, with the vendors having positioned it as a key food destination with long-stay apartments. “The owners have completed a sensitive renovation project combining the building’s historic features with new services to create stylish and comfortable accommodation.”
The property was once run as a boutique hotel and although the building still carries the name, it is now 45 per cent occupied by retail tenants with the managed apartments generating 39 per cent of the net income. Other commercial and office tenants make up 10 per cent of the building with the backpackers’ hostel on Level Five taking the remaining six per cent.
Ten of the retail tenancies front Wellesley St with a further 16 within the Elliott Stables food precinct. “The vendors are underwriting some small vacant retail spaces for two years allowing the property to be offered 100 per cent occupied to the new owner on settlement,” says Hutt.
“There is active inquiry for the vacant units with potential occupiers attracted to the up-and-coming location and the enduring popularity of the food outlets in Elliott Stables among customers.”
The 65 managed apartments vary in size from studios to four-bedroom apartments and are rented from $340 a week up to $1100 a week. All are fully furnished and self-contained, including kitchens, bathrooms, telephone and internet service and modern security systems. The units also incorporate many of the building’s historic features, including sash windows, high studs and antique decorative plasterwork ceilings.
Character exterior of Elliott Stables restaurant and dining centre.
The largest single occupier by rental is Rocat Investments, which operates the Attic backpackers’ hostel – a 100-bed accommodation facility that has been operating at the property since 2002 on a net lease extending until 2019.
“The backpackers’ hostel is popular among budget travellers because of its location in the centre of the city within walking distance of the Queen St shops, night life attractions like Sky City, the waterfront and Britomart.”
Hutt says Elliott St is a much more attractive place since the opening of Auckland Council’s ‘shared space’ revamp of Elliott St in 2011. “Elliott St once had an uninviting ‘back street’ feel but it’s now been transformed into a busy and trendy precinct.”
The council’s award-winning ‘shared spaces’ programme is intended to transform and revitalise city streets into pedestrian-friendly destinations where people can shop, sit, relax, linger, dine and spend time. In shared spaces, the traditional distinction between footpath and road is removed, along with visual enhancements including paving, seating and trees.
Elliott St was one of the first shared spaces to open in the city with several other streets throughout the CBD having now been similarly upgraded.
“The positive impact of the shared spaces on Elliott St is obvious,” says Hutt. “The street has been drastically improved aesthetically and visually and now contains many quality shops and cafes alongside the Elliott Stables.”
He says another significant local improvement is the council’s enhancement of Bledisloe Lane opposite the T&G building, linking Wellesley St with Aotea Square. “Bledisloe Lane is a popular thoroughfare for workers, tourists and theatre-goers.. It is now much brighter, safer and more attractive, and forms a vital part of the walking link between Aotea Square down Elliott St and on to the waterfront.”
The City Rail Link project is also expected to benefit the ‘uptown’ area, Hutt says. “The southern entry to Aotea Station is within 100 metres of the property and is predicted to become the busiest station on the Auckland rail network when it opens.”
Further council investment into the Aotea precinct is expected to provide a further boost to nearby property values, as well as revitalising the entire CBD.
Plans recently announced include a $64 million facelift and extension to the 25-year old Aotea centre. It is one of four development sites the council is seeking public input on to breathe new energy into Aotea Square.
Warren Hutt of CBRE.