A well-known office building in East Tamaki with three well-established international brand-name tenants has been placed on the market.
BDO House, at 116 Harris Rd, Auckland, is for sale by deadline private treaty closing at 4pm on Wednesday August 20 through Andrew Hooper, Greg Goldfinch and Andrew Reed of Colliers International.
Hooper says the building is a local landmark and a solid investment proposition. "Everyone living or working in the area knows BDO House - it's a very well-presented and distinctive building standing prominently on Harris Rd," he says.
"With three high-quality, long-established tenants in place - BDO, Kiwiplan and Flight Centre - it makes a great passive holding for investors."
Hooper says the current owner, comprising a group of investors, is moving on, presenting an opportunity for a buyer to acquire a strongly performing investment.
"The property delivers significant rental income of $777,000 and, as an investment holding, presents excellent fundamentals.
"It has a great location on a busy road and is a quality, modern and well-maintained building with longstanding tenants. It's got all the key factors investors are looking for."
The three-level building has 2767sq m of lettable area, on a large site of 6454sq m, which is in the process of being subdivided from a larger property. Car parks for 154 staff and visitors are provided on the property with landscaped grounds surrounding the free-standing building.
"Few buildings of comparable size and location can offer such a large number of off-street car parks, and this factor has been a key drawcard over the years for prospective tenants," says Hooper.
BDO and Kiwiplan have occupied the building since 2001 and both tenants have rights of renewal built into their leases. Flight Centre has just signed up to a new lease of six years.
Reed says BDO occupies the first floor and a boardroom/training area on the ground floor. "As one of the largest accountancy firms in the world, with operations in more than 135 countries and more than 800 staff throughout the country across 11 practices, the company is a very sound commercial tenant."
Kiwiplan, which develops software solutions for packaging manufacturers, occupies the top floor and about half of the ground floor. It was established more than 30 years ago and has grown into a global firm headquartered in the United States. It is now owned by the Carlyle Group, which manages more than US$199 billion ($ 234.3 billion) in assets.
"Kiwiplan is a real New Zealand success story and while it now operates globally, it continues to develop here ... you do not get much better than this when it comes to tenant covenant," Reed says.
Flight Centre NZ will occupy some of the ground floor, where it will run a corporate travel office. It is part of Flight Centre Travel Group, an independent, Australian-owned firm with more than 1500 shops and businesses in Australia, New Zealand, Canada, US, South Africa, India and Britain.
The property occupies a highly visible position in one of South Auckland's busiest and most intensified commercial locations, Hooper says.
"Harris Rd is one of the main arterials through East Tamaki giving great exposure for the building, and with the Highbrook Drive motorway ramps having improved State Highway 1 access dramatically in the area, easy accessibility is another beneficial feature of this investment."
Goldfinch says the tenants benefit from being just 20 minutes from the Auckland central business district, with very high-quality office space in a location with considerably cheaper rentals than central city rates.
"This is an ideal part of town for office-based businesses and a strong alternative to a CBD location. In fact, we have seen constant interest in recent years from businesses seeking a suburban location, especially service oriented companies."
Goldfinch says East Tamaki, as one of Auckland's most established commercial and industrial precincts, is very popular among industrial, retail and ancillary office occupiers.
"The Harris Rd area is very popular due to its exposure to high volumes of passing vehicles daily, and has quickly developed into a sought-after precinct for showroom, office and industrial occupiers."
Colliers International's latest research reported a low vacancy rate of 5.6 per cent in the East Tamaki/Highbrook area, as at March 2014.