A three-level office, showroom and warehouse building which generates $148,000 in net annual rental income from three tenants is being marketed for sale as a redevelopment add value opportunity.
The city fringe property at 21-23 Nixon St, Newton, just off Great North Rd, Auckland, will be auctioned at 11am on November 7 at Colliers International's office at 151 Queen St, in the Auckland CBD, unless it sells before that.
"This is a classic add value opportunity in a regenerating mixed-use location," says John Davies, who is marketing it with colleague Jonathan Lynch.
"Although the property is currently occupied by three tenants, the weighted average lease term remaining of 1.3 years makes the building a prime candidate for redevelopment.
"We see it appealing to developers looking to convert it into modern, open-plan office or showroom use, or a combination of the two."
Residential use could also be a possibility, with other apartment developments having been constructed in the area recently, Lynch says.
"With the current rentals below market levels and given the popularity of this city fringe location, there is significant potential to realise this property's great potential as an excellent income-generating asset."
The three-level concrete block building comprises 957sq m of floor area across two floors of offices and ground level showroom and warehouse space on a 569sq m freehold site. A secure gated basement parks 23 cars.
O'Neills Textiles occupies the warehouse portion of the ground floor. The company supplies fashion fabrics to customers including designers, manufacturers, film producers and commercial uniform suppliers, and operates in the New Zealand and Australian fashion industries. The first floor office accommodation is occupied by Teleservices, a specialised call centre provider; and a market research company leases the ground floor office space.
The property is located on mixed-use zoned land just off the eastern end of Great North Rd in a regenerating retail and office precinct, Davies says.
"This part of town used to be home to businesses like panelbeaters and vehicle workshops, but has been undergoing transformation into a mixed-use locality with showroom retail, restaurants and apartments."
A number of properties in the area were redeveloped and upgraded in the mid-1980s to provide for more intensive uses, with more recent developments mostly centred on apartments and showrooms, says Lynch.
It is only 3km from the central business district and the regular bus routes along Great North Rd make the area attractive to residential occupiers, he says.
John Bowring, Colliers International's national auction manager, expects the property to appeal to buyers with an eye for upside, given Auckland's significant forecast population growth. "Auckland's growth is expected to result in increased demand for offices, shops and apartments in the central city and fringe areas, so we should see buyers in the auction room who are keen to undertake property developments and aim to benefit from this trend."
What's on offer Building: Office, warehouse and showroom
Address: 21-23 Nixon St, Newton
Comprises: 957sq m on three levels
Earns: $148,000 a year
Feature: Redevelopment potential