Grafton twin tower student site for sale

Artist's impression of planned student twin towers accommodation buildings at 36 Whitaker Place, Grafton.

A big freehold Grafton site close to the Auckland CBD is on the market with plans and resource consent just approved for purpose-built, twin-tower, high-rise buildings containing student accommodation.

The 3072 square metre property at 35 Whitaker Place is being marketed for sale by tenders closing May 14 by Ray White Commercial managing director Bruce Whillans and his colleague Blair Chandler.

Investors are invited to submit a bid either for the entire site or as two separate freehold lots with Lot 1 being 1378 sq m and Lot 2, 1694 sq m.

Whillans says the planned property, if a new owner proceeds, will provide 1082 student beds on a site that is within 500 metres of Auckland University, the Auckland University of Technology, University of Auckland Medical Campus and numerous other tertiary institutions.

Bruce Whillans, managing director of Ray White Commercial

"With over 60,000 students enrolled between these institutions, there is continual demand for student accommodation close to campuses. The current supply of quality purpose built student accommodation facilities in Auckland is well below that of other global cities where foreign and national students are drawn to a major tertiary institution such as the University of Auckland," says Whillans.

"Applications for available beds in Auckland University's managed student accommodation, for instance, far outnumber places."

He says student housing has become internationally recognised as a sought after and growing asset class which is held in high regard for its stable, counter-cyclical income stream.

"Because of this, they have traditionally been owned by governments, sovereign wealth funds and global REITS [real estate investment trusts]."

In November last year, Ray White Commercial sold a portfolio of student accommodation in Wellington for $49.5 million to a US-based investment fund. Whillans says the portfolio generated significant interest from local and offshore investors and he expects the Whitaker Place property to do the same.

The Whitaker Place vendor, Southside Group, has been in discussions with prospective student accommodation tenants, managers, operators and investors, but the group has not entered into any agreement - freeing other interested parties to pursue their preferred option for the site.

The proposed twin tower development for the site has been designed by Brown Day Architects and construction can be implemented in two separate stages. "Each tower could be completed to meet the commencement of the 2017 academic year," Whillans says.

The total gross floor area of 25,490 sq m plans include a ground floor retail shop and cafe, student common areas, service areas and car parking for 13 cars.

The two consented buildings each have 21 floors and are long and regular in shape with a central corridor to provide flexibility should any variations to the internal layout be required. The bulk of the buildings could also be increased or decreased to allow different habitable areas, or to change the use from student accommodation to something else. The plans provide for a 50-50 mix of self-contained studios and multi-bed apartments.

Aerial of Grafton with artist's impression of student twin towers buildings superimposed in setting.

Under the proposal, the north tower would have 563 beds and the south tower 519 beds, each with two floors of common amenity.

Whillans says the slope of the land allows for extra floors, all with an elevated aspect to Grafton Gully and offering uninterrupted views down through the Grafton Gully to the Waitemata Harbour and across to the Auckland Domain.

Chandler says the site is close to public transport with a bus stop located on the corner of Whitaker Place and Symonds St.

"The new Grafton Gully cycleway runs along the property's eastern boundary with an entry point adjacent to Wellesley St.. The development has been planned to allow direct access onto this."

The cycleway is an extension of the north-western cycleway, connecting land to sea starting from Upper Queen St, through to Grafton Gully and Beach Rd. It has been designed to provide safer and easier access to the universities, city centre and waterfront.

Chandler says significant geotechnical and infrastructure work has been completed on the Whitaker Place site.

"Large, freehold land sites still available for development are extremely rare in the Auckland CBD and are very sought after by developers, especially given the development money now coming out of China into the New Zealand market.

Blair Chandler of Ray White Commercial

"The Auckland apartment market is extremely buoyant and a variation to the resource consent could be applied for if someone wished to pursue a standard apartment scheme for either tower.

"Effectively, the Whitaker Place site presents investors and developers with a blank canvas to achieve their own vision for this prime site."

"With the global financial crisis well behind us, Auckland is now seeing a significant increase in commercial and residential property sales with investment yields being achieved close to, or above, pre-recessionary levels as cashed-up groups redeploy capital into property.

"The buoyant residential market is fuelling renewed appetite for apartment projects, particularly in the CBD, and this is resulting in significant growth in underlying land values," Chandler says.

Southside Group director Chris Jones, says his company has put a lot of time and effort into the design and consenting process and has been dealing with a number of parties who have varying desires. Southside is flexible as to how to go forward and is confident the tender process is the best way to allow parties to proceed in the way they prefer.