CBD building where maths add up to an educated buy

The 4934sq m building at 85 Airedale St. Photo / Supplied

Offering a wide range of future use possibilities, a six-level freehold building in the heart of the Auckland CBD's educational precinct is for lease or sale.

The 4934sq m building at 85 Airedale St, two lots back from Symonds St, was built in 2002 for the Auckland International College (AIC) and has four levels of tutorial and office accommodation, along with two levels of apartments sitting on 32 individual titles.

The property is being marketed by way of expressions of interest through John Halstead and Paul Hain of Bayleys Auckland Central, with a closing date of Wednesday, May 12, if not sold or leased beforehand.

Hain says there has been a noticeable pick up this year in inquiry from education-related tenants interested in leasing space in the eastern CBD educational area as a result of strong activity and a drop in rental levels.

AIC's nine-year lease over the entire building expires on December 31, 2011, and Halstead says the tenant has confirmed in writing that they will vacate by that date. The company has bought a larger property to relocate to.

The Airedale St property is producing net annual net rental income of $1,009,454.

"This gives a potential owner occupier the opportunity to benefit from the remaining substantial rental income until the expiry of the lease at the end of next year," says Halstead.

"Alternatively, it gives tenants who might be interested in occupying all or part of the building time to plan their relocation. There are also a variety of opportunities for investors to add further value to the property and they are likely to be able to acquire it at a double-figure yield on current rental income."

The first four levels of the building comprise tutorial and classrooms all carpeted, air-conditioned and with fire sprinklers. Halstead says the lessee has, at its own cost, provided all internal partitioning in addition to other features, such as a library and fully fitted-out cafeteria. One of the floors has been fitted out for chemistry tutorials.

The top two levels contain 32 residential apartments of 42sq m to 56sq m which have been used by AIC to accommodate students. Each unit incorporates a separate lounge with kitchenette, bathroom and either one or two bedrooms. Whiteware includes a washer and dryer, fridge, dishwasher, microwave, oven, hob and rangehood.

Each apartment sits on its own individual title and the four floors below are also on individual titles. Halstead says this increases the property's attractiveness and flexibility for both owner occupiers and investors because it means they could sell these unit-titled areas.

The building is positioned between Symonds St and Mayoral Drive, allowing good access to major arterial routes and the motorway system, and is located on a 909sq m freehold site on top of a separate two-level carpark, which is managed and carparks are available for lease.

The property is zoned Strategic Management Area 5, which provides for a range of activities, with emphasis on education, residential accommodation, commercial, tourism, entertainment and culture. It sits in the middle of the CBD's education precinct which is dominated by tertiary educational facilities and related uses.

The building has above average-sized floor areas of 755sq m to 836sq m with good CBD views from the upper levels.

The entire building was consented for residential occupancy at the time it was developed and Hain says a full conversion to apartments would also be an option.