North Shore Surgical Centre

12:39 PM Sunday July 20, 2014 Colin Taylor

The medical centre at 181 Shakespeare Rd is opposite North Shore Hospital

A two-level medical and surgical centre for sale on Shakespeare Rd, dubbed the North Shore's "medical boulevard", should attract a wide variety of investors, including doctors.

"This standalone, freehold property at 181 Shakespeare Rd in Milford sits across from the North Shore Hospital," says Euan Stratton, of Colliers International.

In conjunction with colleagues Andrew Hiskens and Deborah Dowling, Stratton is selling the medical centre by auction at 11am Tuesday, July 29, at Collier's Auckland CBD office at the SAP Tower, 151 Queen St,

"It is a premium and fully tenanted investment property offering an investor rental income of $456,944 per annum net," Stratton says.

The net rental income is locked in to increase to $485,283 by December this year with rent reviews already agreed by landlord and tenants.

The building occupies about 2268sq m of land and was purpose built for its owners in 1998, with more than 1100sq m of net lettable area divided into several offices, medical suites and operating theatres. The property also includes 41 covered and uncovered car parks.

"Any commercial property along this medical boulevard gets snapped up quickly and few come to the open market," Stratton says.

"This one is a particularly strong offering, considering the calibre of its tenants, the fully leased premises, the age and design of the building and its location.

"An extensive medical fitout includes two surgical operating theatres and patient recovery areas that are finished to the highest standard.

"The investor's risk is split across five leases, with a WALT [weighed average lease term] of approximately 6.51 years."

Stratton says all of the tenants to have occupied this building since it was built have recently taken up their rights of renewal.

"This sale also gives the opportunity for a group of doctors or surgeons in a renting situation to invest in a commercial property now with the long-term view of eventually moving into a vacancy within the building when it comes up. They could use the rental income to supplement their existing businesses in the meantime.

"It's a trend we are seeing more and more due to Auckland's strong economy: businesses are growing and they want to move from renting to ownership so they can build equity for the future."

Dowling says the net rental from the tenants ranges from $51,631 to $164,665 with terms from five to 11 years. All operating costs are proportioned among the tenants based upon their occupancy percentage of the building.

The two-level building is set towards the back of a flat site allowing for vehicle access and car parks, most of which are leased to the tenants with additional patient car parking.

Architecturally designed, the building is constructed of a mixture of steel, concrete, plaster and anodised aluminium cladding with multi pitched steel and Butynol roofing and aluminium joinery. It has a recent Initial Evaluation Process report prepared by an independent engineer and has a New Building Standard rating of 67 per cent. Services include an air conditioning system and a 27-person, 1850kg Schindler lift servicing both levels.

The location of the building in the North Shore's prime medical district is one of its chief attributes.

"It's on the north side of Shakespeare Rd, in a 4A residential zone which is intended to change to a mixed use zone under the Draft Unitary Plan, indicating the area may continue to see further intensification from commercial users. To the northwest is the Lady Allum lifestyle village and across the road is the North Shore Hospital," says Hiskens.