Auckland Council's former North Shore headquarters and now one of Takapuna's premier commercial buildings is being sold for the second time in two years by the same agent.
"The sale of 1-7 The Strand provides a rare opportunity to invest in one of the largest blue-chip properties in suburban Auckland," says John Binning, director of capital markets for JLL, who is selling the property via an expressions of interest campaign closing on Wednesday June 4.
Binning, who also sold the complex in 2012, says the property is on a high profile corner site at the junction of The Strand, Hurstmere Rd and Lake Rd which are the main commercial streets in Takapuna.
"Only 200m from Takapuna Beach, it encompasses an outside plaza that is the largest in Takapuna, giving wonderful light and space around the buildings for ease of pedestrian movement and retail exposure. An open space restaurant which is well patronised occupies a prime position on the plaza."
The four-storey office and retail building with views to Rangitoto Island has 15,000sq m of office and retail space and 312 car parks.
"Because of the surge in interest in the New Zealand property market from international and local investors and a lack of comparable A-grade investment opportunities, we are expecting the sale to generate interest from a broad range of investors," says Binning.
"Being close to the seafront gives the office levels outstanding views over Takapuna Beach and out to Auckland's Hauraki Gulf Islands, while other floors have views over the North Shore to the Auckland CBD."
He says the owner, King Khoo, is taking advantage of a strong New Zealand property market to sell the property and "realign his portfolio" - changing his focus from passive to active investments.
The property, a block back from Takapuna Beach, was sold to Khoo two years ago for $71 million by North Shore investors Andrew Holliday and Ian Wills.
Through their Pi Capital Investments Group, Holliday and Wills spent $15 million on a refurbishment including adding a 4400sq m four-level office extension and three levels of car parks.
The building was given a four-star green design-and-built rating by the Green Building Council because of sustainability initiatives including rainwater harvesting, energy-saving heating, ventilation, light fittings and controls, in the extension.
Binning says value in the building will be driven by the likelihood of rental increases and the future commitments of tenants because of a lack of comparable properties.
Eighty-six per cent of the property is leased to the Auckland Council on a 12 year lease that started in 2009 and has two renewal terms of three years each.
"Because of the long-term tenancies, the property's waterfront location and its redevelopment potential, the four main New Zealand banks will be pleased to lend against this property at a high loan to valuation ratio and at the low end of lending margins," says James Kellow from New Zealand Mortgages and Securities who is advising the vendor.
Binning says rents are increasing in Takapuna and have gone up 1.3 per cent over the last six months indicating a strong commercial property market momentum.
"The prime office market in Auckland is at the beginning of a significant uplift in occupier activity," he says. "Our research forecasts that rents for suburban offices driven by sound economic momentum, will increase some 25 to 30 per cent to a market peak, providing a strong impetus for investors to enter the market."
He says Statistics New Zealand confirms that the the Devonport-Takapuna local board area is projected to have some of the fastest population growth rates within the North Shore and Auckland region between 2016 and 2026 with a projected 20 per cent increase.
JLL's latest Pulse newsletter says investor interest in the North Shore/Takapuna area is strengthening.