Attractive rent offer at Fronde House

Fronde House was once known as the Milne & Choyce Building - `the largest drapery store in the dominion'. Photo / Supplied

Two large office floors in Fronde House at 131 Queen St have become available for lease for the first time in more than 10 years at an annual rental claimed to be "hundreds of thousands of dollars less per floor than comparable properties".

Owner and Tawata Farms director Chris Reeve says a consolidation of insurance company IAG's staff to the new NZI Centre, nearer the waterfront on the old Seamart site, has created a rare opportunity for a big tenant to occupy one or two 1174 sq m CBD office floors in the smart, high-stud, historic building.

The distinctive building, formerly known as Centrecourt, is opposite Vulcan Lane in the heart of Auckland's retail, legal and financial precinct.

Reeve says he is offering an attractive rental that "is not an introductory offer".

He says that with new developments like BNZ, Westpac, Telecom, Deloitte and IAG creating CBD vacancies, his buildings like others owned by other companies, need to be "aggressively priced" to attract tenants to the vacant space.

"There's a significant cost to moving and landlords are doing deals at slightly reduced rentals, so we recognise the need to be more aggressive than them in pricing our space and offer tenants more than a few years of slightly cheaper rent. Instead, we're offering a number of years of much cheaper rent," says Reeve.

As a result, a net rental of $80/sq m, which excludes outgoings, is being offered, which Reeve says compares to a market rate of around $330/sq m for similar CBD space.

"As a long-term holder of property, I have no need for rentals that protect the capital value of the building, so we can be very patient in waiting for a more satisfactory rental," Reeve says. "While other landlords are offering discounts of up to 20 per cent, we're offering something in the order of 75 per cent."

Designed by Edward Bartley and built in 1929 by Fletcher Bros for Milne & Choyce, the eight-level, 8000sq m building was described at the time as "the largest drapery store in the dominion". Until 1973 it housed nearly 100 employees in the dress-making, millinery and mantle workrooms of the building. A glimpse of its past can be seen in the "hidden interior work", Teatube, within the John Radford sculpture, entitled VIC, on the northern corner of Ponsonby's Western Park. Inside can be seen a representation of the tea room formerly located on the top floor of the building which was demolished in 1984 and considered by some to have been the most lavish interior in Auckland. The building underwent major renovations in the 1990s to upgrade the entrance foyer and common areas.

"As a result, tenants enjoy a mix of modern services and the charm of a character building with the benefits of excellent natural light that comes from a very high stud, by commercial office standards," says Reeve.

Existing tenants include Whitcoulls Group's head office, computer software company Fronde, recruitment firm Kinetic and call centre operator Telnet.

Reeve says he has a policy of not allowing education-related tenants into the building.

Despite the low asking rents, he has a programme of constant improvements to the building that has lately included a full exterior repaint. Vehicle access to the property is off Mills Lane to a first-floor carpark and a car lift to the basement level, which contain a total of 60 carparks. The building has high-capacity fibre-optic connections already in place, thanks to the presence of Telnet.

Understandably as a landlord of a Queen St building, Reeve questions the wisdom of corporate tenants moving to CBD fringe areas like the Viaduct Harbour.

"While those tenants do have new office space, I believe they will eventually want to be back in the heart of the city among the high-end retail and cafe activity."