Grey Lynn building has prospects

The building for sale at 26B Williamson Ave. Photo / Supplied

A fully leased commercial property for sale in Auckland's tightly held Grey Lynn offers excellent fundamentals.

The 355sq m freehold property at 26B Williamson Ave is prominently positioned on a north-facing corner site.

Colliers International's Kris Ongley, Jonathan Lynch and Hamish Paterson are selling the property, scheduled to be auctioned at 11am on August 22, unless sold earlier.

Ongley describes a solid investment in an area experiencing keen demand.

"It is on the main route between Ponsonby and Grey Lynn, a block from the Countdown supermarket, two blocks from Ponsonby Rd and just 2km from the CBD. It is fully leased to four tenants but presents an opportunity for adding value.

"The versatile layout and Business Mixed Use zone allow for conversion to showroom retail or potentially residential use in the future. Long-term, the site's 27m height overlay provides scope for a more intensive redevelopment, possibly with a mix of ground floor retail and upper-floor apartments."

Constructed in the 1990s as a three-level warehouse, the property was later converted to a two-level, mixed-use commercial building plus basement. A recent IEP assessment found the building meets 100 per cent of current seismic standards.

Lynch says the property offers a total net lettable area of 530sq m over three levels, along with parking at the front of the property for five vehicles.

"Tenants include the Mickey B Fitness gym, a travel agency specialising in in-bound French travellers, an advertising billboard, and telecommunications equipment."

Lynch says the property is well located in the high-density commercial pocket of Grey Lynn, on its border with Ponsonby.

Paterson says the freehold title lends itself well to future redevelopment.

"The site is regularly shaped, with a combined 45m of frontage to Williamson Ave to the north and Mackelvie St to the west. The contour of the site slopes gently away from Williamson Ave, with main building access off Williamson Ave and vehicle and foot access from Mackelvie St."

The four leases currently earn $131,504 in net annual rent.

Mickey B Fitness occupies about 408sq m including the 214sq m ground floor showroom and warehouse, 102sq m basement and 92sq m mezzanine. The gym is signed to a six-year lease earning $72,200 plus GST in net annual rent. Market rental reviews are every two years, with the next review on September 1. The lease expires in August 2022, with no further rights of renewal.

Travel agency Frogs in NZ occupies the 122sq m first floor office. The company pays $38,430 plus GST in net annual rent, with 3 per cent annual rental increases, plus market reviews on renewal. It is signed to a three-year lease, with a three-year right of renewal in July 2021.

The billboard earns $5000 plus GST in gross annual rent, plus 40 per cent of the sign revenue received by the tenant. Multiple rights of renewal extend the final lease expiry to December 2033.

Spark's telecommunications equipment earns $12,000 plus GST in gross annual rent, with CPI rental reviews every three years and market reviews on renewal. The current six-year lease expires in November 2021, after which there are two six-year rights of renewal.