Six of the best on developer's sale list

By Colin Taylor

Historic K Rd hotel among offerings as owner seeks cash to spend on two big new building projects

5 Newton Rd earning net annual income of $105,100 four tenancies.
5 Newton Rd earning net annual income of $105,100 four tenancies.

Six properties owned by Auckland property investor and developer Andy Davies are among a wide range of commercial and industrial offerings up for sale in Bayleys' first Greater Auckland commercial and industrial portfolio of the year.

The Davies Properties properties include three fully leased investment holdings with rentals ranging from $38,000 to $163,000 that will go up for auction on March 5.

Three other properties are for sale by private treaty.

These Davies' offerings include the historic 115-year-old former Naval & Family Hotel on the corner of Karangahape Rd and Pitt St - now occupied by the Calendar Girls night club (see story C2), a development site in Mt Eden village with resource consent for a new retail and office building and a property with further development potential on the corner of Victoria St West and Graham St in downtown Auckland.

Davies, who has owned the properties for an average of 12 years, says he is selling them to focus on two large projects.

One is a new 10-storey student accommodation complex that will be developed on the site of the Rising Sun Tavern at 373 Karangahape Rd.

This will operate under the UniStay brand that Davies has developed through the conversion of a former convent in Shelly Beach Rd, Herne Bay and the Pt Chevalier fire station into student accommodation.

He is also planning to build an apartment hotel at the rear of the Ponsonby Central complex he has developed on a 1.5ha site on the corner of Ponsonby Rd and Richmond Rd.

Davies has transformed the run-down former Allen Calendars' early 1960s industrial building into a vibrant new commercial complex occupied by a mix of homeware retailers and food and beverage and produce businesses.

"The properties that have been put on the market include some of my smaller holdings and their sale is part of a rationalisation of my portfolio which will also release some capital for these new projects I am involved in," says Davies.

Leah La Hood and Nigel McNeill of Bayleys Auckland have been appointed to market the properties.

"Andy is widely recognised in Auckland property circles for the quality of the developments that he undertakes and the properties that he owns and consequently we are already fielding significant inquiry for these offerings," McNeill says.

The largest income generator of the properties for auction is a near-new, high-quality showroom office building at 10 Mt Eden Rd completed in 2009 by Davies and producing net annual rental income of $163,800.

The 296sq m building is on a prominent 268sq m corner site at the intersection of Boston Rd and Mt Eden Rd.

"Location is a very strong feature of this property as it enjoys massive exposure to traffic travelling along busy Mt Eden Rd," says La Hood.

"As a consequence just over half of the property's net annual income comes from two large signs on the front and rear of the striking building."

APN Outdoor has six-year leases on the two billboards from February 2012.

Occupying all of the interior of the building is Exclusive Suit Hire & Sales which specialises in suits for weddings, school balls and black-tie functions.

It also has a six-year lease until September 2016, and Telecom Mobile has another six-year lease over part of the roof for communications equipment. There is a parking for five cars together with a loading bay area in the basement.

"It's a cleverly designed building," says La Hood.

"A very high stud height of 9m for the suit showroom is the focal point of the extensively glazed premises and gives the tenant great profile from Mt Eden Rd.

"This is a high-quality investment property which would suit smaller to medium-sized investors and family trusts."

Another fully leased, standalone commercial property owned by Davies will also be auctioned on March 5.

The 527sq m four-level building is on a 451sq m site on the corner of Newton Rd and Chapman St close to the intersection of Ponsonby Rd with Great North Rd and Karangahape Rd.

"The light-filled 135sq m top level could be converted into a superb residential apartment as it has elevated, wide-ranging central city views and the property is within easy walking distance of the popular Ponsonby Rd cafes, bars and restaurants," says McNeill.

"The area has a mixed use zoning and a combination of commercial and residential uses is becoming the norm for an increasing number of buildings in this vicinity."

In the meantime, the building at 5 Newton Rd is producing net annual rental income of $105,100 plus GST from four tenancies which have one- to eight-year leases with rights of renewal and a share of the building's 11 car parks.

The basement workshop and ground floor retail space is occupied by Retro Scooters, which services and sells motor scooters, and the two levels above are home to fancy dress, costume hire and sales business Costume Magic and Russell Hamlet Photography.

McNeill says the property has appeal for investors and future owner occupiers who are looking for a conveniently located, high-profile fringe city base from which to work and or live.

The remaining auction offering is a prominent corner industrial property at 3 Stock St, New Lynn.

The 809sq m site on the corner with Drury St is within the New Lynn industrial area, one block back from main arterial Great North Rd and about 300m from the New Lynn retail centre.

It contains two small industrial buildings built around 1960 totalling 317sq m with a 67sq m office and utility block between.

The property is leased by Wildernest which specialises in the creation of "pop up" boutique tent accommodation for events and special occasions.

The business has a two-year lease, with two further two-year rights of renewal, and is paying net annual income of $38,000 plus GST.

McNeill says this offering will appeal to small investors looking for a property with add value potential in a high growth area.

Two properties which Davies had intentions of redeveloping are for sale by private treaty, with offers closing at 4pm on March 6.

One is a 378sq m gateway site in a prominent position at 395 Mt Eden Rd at the northern end of Mt Eden Village, on the corner with Valley Rd.

It contains a former split level service station and workshop built around 1930 and more recently converted into two retail uses - a small 20sq m kebab shop and a much larger 215sq m superette which the tenant has recently vacated.

"Davies Properties has designed and obtained resource consent for an attractive two-level building which maximises the corner site and has retail at ground level and office space above," says La Hood.

"A new owner could action these plans immediately upon settlement or look to increase the holding income by retenanting the superette while they explore other options."

The property is being sold with net holding income of $34,670 from the monthly kebab tenancy and from signage leases which have six-month notice demolition clauses in them.

It has a rating valuation of $700,000, of which the land value comprises $620,000.

La Hood says its Business Activity 2 zoning allows for retailing, office and commercial service activity at a medium intensity suburban level.

Another under-developed property at 21 Graham St in Auckland's CBD could give the purchaser the opportunity to add additional levels, make more intensive use of land on part of the 547sq m site which now provides uncovered parking for 12 cars or completely redevelop the mixed use zoned property, says La Hood .

The refurbished 723sq m three- level building is currently fully leased and is producing net annual rental income of $177,849.

The ground floor has a three-year lease to A+ Cafe while the two office floors above have six- and four-year leases which commenced last year.

"There are not many small standalone buildings in the CBD and it is in a very strong location on the corner of Victoria St West, close to the massive Telecom office campus and next door to another big office development that Mansons TCLM has under way," says La Hood.

"A large Wilson car park is also nearby and the location provides very good motorway access."

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a2 at 20 Apr 2014 07:37:17 Processing Time: 815ms