Public Trust tenant in Great South Rd
The property at 205 Great South Rd would suit future development of various kinds. Photo / Supplied
A large office and retail property in Auckland’s Greenlane, with the Public Trust among key tenants, has come up for sale.
The property is being marketed by Warren Hutt and Jonathan Ogg of CBRE, who describe it as an exceptional building.
The freehold building at 205 Great South Rd is to be sold by deadline private treaty, closing at 4pm on June 14, unless sold earlier.
Hutt says it occupies a high-profile Greenlane corner site in Auckland’s Southern Corridor.
“The quality of the property, its location and its underlying land value mean that it will appeal to a wide audience. Assets like this seldom come to market; it’s a tremendous opportunity to secure an well-presented investment premises with rental upside and potential redevelopment.
“We expect it to attract traditional office investors and owner occupiers, as well as those considering alternative uses such as apartments, medical or hotel conversion — even car dealerships,” says Hutt.
Built as a two-level car sales showroom and workshop in 1985, the property occupies a large 3294sq m site. The premises underwent significant refurbishment in 2002, including two new office floors.
Today the four-level building comprises ground floor retail, first floor car parking and two levels of office accommodation with large and efficient office floor plates of around 1595sq m.
Agents say the building is within an area recognised as a popular suburban office precinct. Photo / Supplied
The high land value of the large site, combined with its mixed use zoning, presents future redevelopment options, says Ogg.
“The property has potential for a change of use, for residential, medical or hotel conversion — all of which are real options to add value in this market, particularly as the property is within the double Grammar Zone.
Ogg adds that the large floor plates combined with high car parking ratio and high profile location are also a real attraction to suburban office tenants when they are looking for new premises, as they enable improved efficiencies and cost reductions.”
Net passing income of $1,242,719 is generated by major tenants that include Public Trust, Housing NZ and Skellerup; in all providing a weighted average lease term of about 2 years.
“The building has high quality corporate and Government tenant covenants,” says Ogg. “Further, 205 Great South Rd provides an attractive rent growth scenario, due to its low average office rent at the moment. This means there is potential upside in office, retail and car parking.”
With 120 on-site car parks, 205 Great South Rd has a car parking ratio of 1:33, making it further desirable for suburban office occupiers.
The Public Trust Building is located on the high-profile northwestern intersection of Great South Rd and Green Lane West, with about 50m frontage to each.
A short commute to the affluent suburbs of Newmarket, Remuera and Epsom, and close to both the Southern and Northern motorways and the Greenlane train station, the property has easy access to Cornwall Park, One Tree Hill Domain, ASB Showgrounds, Ellerslie Racecourse, Countdown and many nearby retail offerings.
Hutt says it’s a busy location, with 15,000-28,000 cars passing every day, and just across the road from the ‘Medical Mile’ with Ascot Hospital close by, as are the Novotel and Ibis hotels.
He adds that the location, often referred to as the Greenlane Corridor, is well recognised as a popular suburban office precinct.
CBRE’s recently-released Capital Markets Review research shows that commercial property transaction volumes in 2017 topped $4 billion for the fourth year in a row.
Total transaction volumes over 2014 to 2017 equated to $18.4 billion, surpassing aggregate sales activity for the previous eight years. Office buildings made up close to half of the transactions, with the balance being shared between retail, land, industrial and special purpose assets.
Ogg says there is a high likelihood that this level of activity will flow on into 2018 too.
“A recent CBRE Asia Pacific investor intentions survey shows that 92 per cent of respondents indicating their investment activity this year will be the same or greater compared to 2017, with a broadening away from the traditional preferred markets of Shanghai, Sydney and Tokyo.
“Investors increasingly consider core plus/value-added assets, such as 205 Great South Rd, which have high underlying land value and strong potential for rental growth or redevelopment.”