A fully-tenanted and completely refurbished commercial building in the heart of Parnell's commercial precinct is for sale by auction as one of the featured properties in Colliers International's latest National Portfolio magazine.
The freehold 767sq m property at 8 Cleveland Rd, off St George's Bay Rd, is being marketed by John Davies and Jonathan Lynch and will go under the hammer at 11am on October 17 at 151 Queen St, Auckland, unless sold before the auction day.
"This building has been completely refurbished to a high-quality, modern standard with an A plus seismic strength rating exceeding 100 per cent of the new building standards," Davies says.
"Two of the three tenants are multi national companies and the property returns $324,000 in net annual rental income.
"This represents an attractive investment proposition with the potential to add further value in the future."
Davies says there is opportunity to renegotiate the existing leases on to longer terms and realise the property's full income-generating potential. "The current rental levels provide room for growth and with its prime Parnell location, it presents a compelling investment."
John Bowring, national auction manager at Colliers, says with the sub $6 million market very strong for prime investment property, he expects the property to appeal to both passive and add-value investors.
"This is a significant opportunity to own a prime freehold property in the heart of Parnell. We expect a busy auction room with local investors and family trusts looking to add to their portfolios."
The property's excellent seismic strength rating will enhance its appeal to tenants, Davies says.
"With seismic concerns now spreading far beyond Christchurch and Wellington, employers are aware of the need to provide a safe working environment." The three-level property contains office and showroom areas amounting to 1300sq m of net lettable floor space, occupied by three very strong tenants: Konnect, LanzaTech and Nick Hodson Lawyers.
Lynch says the refurbishment has created modern, open plan office space on the ground floor of the former showroom and warehouse building, which was previously occupied by Bauhaus Furniture. "The bathrooms and amenity areas have been upgraded and the property also features two decks off the first floor. It has an excellent car parking ratio, with 32 spaces over two levels of secure basement parking."
Konnect occupies most of level one and all of level two on a three-year lease, paying $204,200 in net annual rent. The company, which was established in 2008, provides business process management solutions and services to clients in the insurance, health and corporate sectors across New Zealand and Australia.
"Konnect's business has grown quickly since set-up, building a strong position in New Zealand and a growing presence in Australia in the insurance and health sectors," says Lynch.
Lanzatech occupies the entire ground floor on a two-year lease, paying $105,000 in net annual rent. The company, which was founded in 2005, develops and commercialises proprietary technology for the production of low-carbon fuels that do not compromise food or land resources. It now has offices in the United States, China and New Zealand.
LanzaTech has made a particularly significant investment into the fit-out of its ground floor office space, Lynch says. "LanzaTech has totally refurbished and fitted out its space into modern, high-spec offices, adding value to the whole property."
Nick Hodson Lawyers occupies part of level one on a three-year lease, paying $15,170 in net annual rent.
"The excellent condition of the property and its location means the office space should always be easy to re-let in the future," Davies says.
"This type of property, with flexible and attractive interiors and ample on-site car parking in this prime location, will continue to remain in demand to a variety of businesses."
The property is situated in a busy commercial zone in the popular St George's Bay Rd and The Strand precinct, with easy access to motorways, the central business district and Newmarket, Lynch says.
"Up the road from the property is the Rosehip Cafe, across the road is top-end restaurant Cibo and around the corner is the popular Paddington pub."
The area is currently undergoing major land use changes, he says. "There are designated plan modifications for higher intensity, with light industrial use giving way to commercial, residential and showroom developments."
A number of nearby apartment complexes mean the area is also regarded as a mixed-use locality, with the advantages of good motorway access and within walking distance of Parnell's main retail and cafe strip, says Davies.
"The locality has also recently proved particularly attractive to creative and media-related businesses, with major tenants including Saatchi & Saatchi and media planning and buying agency Carat New Zealand occupying premises in the immediate vicinity of the property."