Aviation House benefits from multiple tenancies

Aviation House is home to the Aviation Industry Association.

The nine-storey Aviation House office tower on the north-eastern corner of Featherston and Johnston Streets in Wellington's CBD has been placed on the market for sale by negotiation.

Mark Sherlock of Bayleys Wellington says the circa1930s' building at 131 Featherston St has a robust rental history and its owners, Prime Property Group, are divesting the property to free up capital for other commercial development work in the city.

He says the freehold property has a lettable area of 3191sq m and is fully unit-titled with each of the nine floors having its own title.

"There is a lot of leasehold property in this inner city location so the freehold status of Aviation House gives it a clear advantage in that regard," says Sherlock.

"A new owner may wish to sell-down the individual floors at some later date which gives real flexibility to the offering."

The ground floor tenancy has been occupied since the 1980s by The Featherston Bar & Grill. Other tenants include the Aviation Industry Association of NZ, the Funeral Directors Association, accountants, lawyers and IT businesses.

"Multiple tenancies across the nine levels spread the risk and while the management aspect may be more intensive, it does mean that the owner is not beholden to the whims of individual tenants," says Sherlock.

"Whole floors are not lost at a time and no one tenant controls the budget. There is a small amount of vacancy in the building currently so there is some rental upside in it for a new owner."

The Featherston and Johnston Street intersection is special in Wellington in that it has character buildings with ground floor hospitality-related businesses on three of the corners.

Being close to Lambton Quay underpins the strong commercial fundamentals of the property with proposed development in the immediate vicinity further reinforcing the desirability of location.

"Aviation House is next door to BP House which Wilton Capital and the Auckland-based Newcrest Group wish to demolish and replace with a modern, 14-level $80 million office tower," Sherlock says.