Mixed-use Albany investment

3:21 PM Friday August 2, 2019 True Commercial

229 Dairy Flat Highway

A substantial mixed-use investment property in the heart of Albany Village is for sale with a diverse range of tenants providing exceptional covenant and nearly $1.9 million in net annual rent.

Located at 229 Dairy Flat Highway, the property comprises four separate buildings on a large 1.04ha freehold site with 156 car parks.

It is anchored by Massey University, Auckland Council and a recently completed Quest serviced apartment hotel, which together contribute 97 per cent of the property's annual income.

The leases have a weighted average term of 10 years, making the property an excellent long-term investment proposition.

This is underpinned by the large site's favourable Business Local Centre zoning, providing future development upside in a high-growth Auckland location.

Directors Shoneet Chand and Matt Prentice of Colliers International's North Shore office have been exclusively appointed by listed entity PFI to bring the property to market.

It is for sale by way of deadline private treaty closing at 4pm on Tuesday 27 August, unless sold earlier.

"This exceptional investment is underpinned by multiple A-grade tenants, a strong weighted average lease term, a central North Shore location and clear future development potential," says Chand.

"The property is superbly positioned within Albany Village, which is easily accessible via the Albany Expressway to the west and the nearby Northern Motorway.

"It is only 19km from Auckland's CBD and within easy walking distance of New Zealand's fourth largest shopping centre, Westfield Albany, and major new residential developments.

"The wider Albany area has been prioritised by Auckland Council for intensive development and growth. Nearby developments include QBE Stadium, Massey University and the Albany Mega Centre.

"With so much activity in the area, this is a chance to secure an outstanding investment with solid fundamentals and future upside."

Vendor PFI is a property investment company that has been listed on the NZX since 1994. It has more than 5,000 shareholders and a portfolio of 94 properties valued at over $1.3 billion dollars.

Chand says PFI has invested significantly in the property, allowing a new owner to benefit from the capital improvements.

Prentice says the newest addition is the four-level Quest building, which comprises 38 units ranging from 26sq m studios through to 74sq m two-bedroom apartments.
“All include modern kitchen and bathroom facilities. The building also has secure undercroft parking for 18 cars,” he says.

“Quest adjoins a large single-level building occupied by Massey University. Built as a supermarket in the 1980s, it has since been converted for use as a design studio and workshop.

“Next door is a three-level office building with ground floor retail, including the Albany Village Library. It is occupied by Auckland Council, Massey University, a bakery and a sushi shop.

“The remaining premises is a one-level freestanding building that also adjoins the plaza. Originally occupied by a restaurant, it is now leased by Auckland Council as the Upper Harbour Local Board office.

“The building has a sculptural curved roof, a schist-clad feature wall, and extensive glazing to the frontage.”

The property is on five leases with terms ranging from two to 19 years. These return $1,899,849 in net annual rent, with the next round of rental reviews between September 2019 to June 2021.

Auckland Council is the largest local authority in New Zealand, employing more than 11,000 people. It pays $242,501 in annual rent for 715sq m of space. Massey University pays $985,450 for 4408sq m plus 105 car parks.

Quest apartment hotels has over 150 properties in Australia, New Zealand and Fiji.

It pays $615,999 in annual rent for 1404sq m plus 18 car parks.
The bakery and sushi shop rent 108sq m and 62.5sq m spaces, paying $32,400 and $23,500 in annual rent respectively.

The Business Local Centre zone primarily provides for the local needs of residential areas, including retail, commercial services, offices, food and beverage, and supermarkets.

Albany benefits from excellent access to the transport network including the Northern Motorway and the Northern Busway and its associated park and ride facility. The Northern Busway significantly improved the travel times from Albany to the CBD and is a part of the Auckland Council’s Rapid Transit Network.

This connectivity will continue to attract further mixed-use and commercial expansion in the Albany area. Developments include Mitre 10’s national support centre, as well as the Rose Garden apartments.