High security building for sale or lease

By Colin Taylor

29-31 Wilkinson Rd can be used as an existing data centre, converted to offices or possibly be redeveloped for residential. Photo / Bruce Clarke
29-31 Wilkinson Rd can be used as an existing data centre, converted to offices or possibly be redeveloped for residential. Photo / Bruce Clarke

Ellerslie property, being vacated by Hewlett Packard, has several uses and likely to fetch $3m.

An Ellerslie high security building, housing one of Auckland's biggest data centres, is being offered for sale or lease with offers closing next Thursday, June 28.

Hewlett Packard leases the building at 29-31 Wilkinson Rd, Ellerslie, using it as a data/information technology processing and services centre.

The 1900sq m, two-level building on a 3422sq m site was purpose built for EDS in 1975. EDS was bought by Hewlett Packard (HP) in 2008 and the operation is now moving to HP's new East Tamaki premises early next year.

Paddy Callesen, joint managing director of Savills, is selling the highly specialised building with vacant possession, and expects it to fetch about $3 million, although HP has asked for a short extension to its lease and will vacate the property by the end of March next year. Alternatively, the property can be leased through Colliers International. Leasing broker Sam Gallaugher says should a suitable tenant show interest in the building the owner is willing to spend money on upgrading it.

Callesen says a new owner of the property has a number of possible options.

"It can be used as an existing data centre or converted to offices and it can possibly be redeveloped for residential development.

"A data centre operator could move in straight away and start business. The building provides space in a highly functional configuration over 1000sq m floor plates."

"On the upper floor, a raised timber floor has been installed to provide a cavity through which the extensive amount of computer cabling is run," says Callesen. "There are few windows in the building because of the high level of security needed by HP and natural lighting to the interior of the premises is limited. The floors are air-conditioned, carpeted and partitioned to a reasonable, although dated, standard.

"If the data centre loses power there is a back-up generator on the property owned by HP and the company says it might be willing to consider selling it to a new owner."

Sitting opposite APN's printing plant, the property is in the southern corridor, which has the biggest concentration of suburban office development in Auckland.

Surrounded by a mix of residential, commercial and industrial development, it is just 300m from the Ellerslie-Panmure motorway ramps and is near the Ellerslie train station, which has been given an $8 million upgrade.

Callesen says that on the opposite side of the highway is Central Park, a large-scale office park owned by Goodman. "The commercial appeal of the area has risen after Goodman expanded and refurbished Central Park and developed the A-grade Millennium Centre on Great South Rd at Greenlane."

The property sits on three titles, with the building on two Business 4 zoned parcels and dedicated parking for 49 vehicles on a lot zoned residential.

"The titles offer a new owner medium to longer-term redevelopment opportunities," says Callesen. "It is difficult for investors to find office properties that give a number of redevelopment opportunities. Most of the recent redevelopment opportunities have been run-down industrial properties."

Callesen says risks remain in the commercial office market but the shoots of recovery showing through in the past year have been positive for the sector. "Yields and rents have stabilised and increased leasing in the prime market has flowed through to the secondary market.

"While risk aversion is at the top of most investors' mind, the lack of alternative yielding investments is providing continued demand for quality investment properties."

He says if a new owner decided to opt for residential redevelopment they would be providing new housing in a desirable suburb. "The town centre has good services while maintaining a sense of community. Housing in the area is well planned and close to a number of attractive parks.

"As Auckland's population continues to grow and predictions for a population of 1.74 million by 2022, housing is going to be at a premium."

Callesen says an investor buying the Wilkinson Rd property will have a myriad of opportunities no matter what they opt to do.

- NZ Herald

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