Potential for ‘cool character space’

3:25 PM Friday February 16, 2018 Colin Taylor

The two wooden heritage buildings at right are near the SkyTower and construction site of the International Convention Centre. Photo / Supplied

Two listed heritage buildings in the Auckland CBD present the opportunity to own and work from, lease or live in, a Victoria St wooden character building.

“These buildings are blank canvasses for owner-occupiers,” says Nigel Ingham of Ray White Commercial who, with fellow director John Davies, is marketing 134 and 136-138 Victoria St West for sale individually or together with a closing deadline for offers of 4pm on March 1.

“Subject to obtaining the necessary resource consents, either, or both sites, could be developed,” Ingham says.

“They are located strategically among some of the biggest projects now under construction in Auckland — the New Zealand International Convention Centre [NZICC], the Hobson St Hotel and the City Rail Link.”

Davies says both properties are leased but with terms that allow refurbishment or redevelopment to be fast-tracked.

“These buildings date back to the 1900s and have the potential to become cool character space,” he says.

“Each has two car spaces at the rear, accessed from Nelson St which, in itself, adds value. In December 2017, a car park in the Quay Residency apartment complex — not too far from these properties — sold for $265,000.”

Davies says the combined passing rental income for the properties is $78,674.65. A convenience store occupies 136-138 Victoria St West on a lease expiring in July; while a spa and beauty salon is the tenant at 134 Victoria St West on a lease until June 2019 with the terms including a demolition clause.

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A convenience store/dairy is the tenant at 136-138 Victoria St West. Photo / Supplied

“The possibility of 134 Victoria St West becoming vacant with three months’ notice adds further value to the proposition,” Ingham says.

“There’s potential for a mixed-use, residential, retail and office development subject to resource consent. A buyer could consider living upstairs while either operating a business downstairs; or leasing out the commercial space.

“Living and working in one of these buildings and refurbishing them to suit personal tastes is an appealing alternative to buying an apartment in the CBD, paying body corporate fees and being subject to the limitations of strata living.

“When comparing these two options, there are clear advantages in owning a character freehold standalone building in an up-and-coming urban precinct.”

Davies says purchased together, the properties represent a superb development opportunity — to refurbish the buildings or demolish them and undertake a total new build.

“The zoning of Business — City Centre Zone under the Auckland Unitary Plan allows for a height limit of up to 40m, so a new building could go up 10 to 12 storeys, subject to resource consent,” he says.

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The building at 134 Victoria St West has a lease that includes a demolition clause. Photo / Supplied

The NZICC and the 300-room Hobson Street Hotel are due to open nearby in 2019 with the planned world-class venues expected to create numerous jobs and host thousands of international visitors.

“There’s no doubt these projects, as well as the CRL — one of New Zealand’s biggest-ever transport projects — will have a positive impact on these Victoria St West properties when completed,” Davies says. “The country’s biggest exhibition hall right now is at SkyCity Auckland, a few minutes’ walk away and the conference centre’s exhibition hall will be five times bigger.

“Aotea Station, within walking distance, will be one of the stations on the underground CRL line.”

The buildings are close to the NZME and BDO Centre, both medium-rise, five-star, green-designed commercial office and retail buildings. Wyndham Hotel Group’s third Ramada Suites in Auckland is under construction across the road.

Davies says other nearby Victoria St West buildings are the Spark City complex comprising 30,000sq m of office space over four-campus styled buildings and housing more than 2500 Spark staff — and Oracle House.

“These properties have lifted the quality of retail and commercial office space within the Victoria Quarter over recent years; along with the rejuvenation of Sale St and transformation of the area around Victoria Park.”

The properties are close to the Viaduct, a popular destination for bars, restaurants, hotels and offices that is likely to be the home base for the America’s Cup defence in 2021.

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John Davies, Ray White Commercial