Hamilton's 15-level tower building at 42-48 Ward St. Photo / Supplied
Hamilton's tallest and largest office building, a 15-level tower with two levels of underground parking and a zoning of Central City Downtown precinct is for sale.
The city landmark is one of three feature investment properties that NAI Harcourts is bringing to the market with the other two positioned in suburban Auckland.
Tony Kidd, the agency's general manager, says that the three properties present differing opportunities to investors.
"The sale of Hamilton CBD tower property provides an excellent opportunity for an astute investor or developer to add value in a variety of ways," he says.
"Provincial locations like Hamilton are seeing strong purchaser activity for a variety of reasons with higher yields and lower rental rates being two of the key drivers when compared to similar properties in the main urban markets of Auckland, Wellington and Christchurch.
"As one of the fastest growing regions in New Zealand, Hamilton is seeing significant investment, with building consents granted from 2013 to 2016 of $1.35 billion and significant money being invested in infrastructure development.
"The property at Ward St, along with the overall characteristics of the region, provides an excellent investment and/or redevelopment opportunity."
Kidd says a second featured property comprises a North Shore redevelopment site with resource consent for 41 terraced houses; while a third is a South Auckland investment office property.
"The Hamilton CBD tower has significant development and upside potential," says Mike Neale, managing director of NAI Harcourts Hamilton who, with colleague Brad Martin, is marketing 42-48 Ward St for sale by deadline private treaty closing 4pm on Friday July 5.
Neale says the building has a net lettable office floor area of 10,584sq m and a gross floor area of 14,500sq m. On-site car parking for 52 vehicles and storage is provided for within the two basements levels that encompass a total basement area of over 3000sq m. The property also has a large backup electricity generator onsite as security against national or local grid power failures.
"The property is earning rent of $729,239 per annum plus GST and outgoings from only about 50 per cent occupancy.
"It's located in the heart of Hamilton's CBD fronting onto Ward St, with the building sitting prominently above Centre Place shopping centre affording 360 degree panoramic views over Hamilton and the surrounding Waikato landscape from the upper levels.
"From a staff perspective, it's well-located near the Hamilton City Transport Centre for buses and taxis, with the added bonus of basement car parking.
"The surrounding area is occupied by a mixture of office, retail and service businesses with close neighbours including Michael Hill Jeweller, Starbucks, Panama Square co-working space, Hamilton City Council and the recently completed ASB Bank building."
Bryce Street Dining Lane, which incorporates a multi-tenanted al fresco dining experience is located directly opposite.
Martin says construction on the building for Government Life started in 1977 and was completed in 1980. "Subsequently occupied by Tower Insurance, the building is still often referred to as the Tower Building," he says.
The first floor from street level has an area of 1162sq m and the second floor has 1403 sq m. Nine floors above have the same floor area of 686sq m while the 12th floor is 728sq m, 13th floor 406sq m, 14th floor 321sq m and the top 15th floor is 386sq m.
Martin says key tenants include the Precious Metals Group, New Zealand School of Tourism, Chatwin Legal, Plan B and MediaWorks.
"The CBD has quality companies and 'smart thinkers' underpinning its success," he says. "Companies like Beca, Craigs Investment Partners, Deloitte, KPMG, PwC, Tompkins Wake Solicitors and Fonterra are active in the CBD."
"Tertiary education is also well-represented with Waikato's largest tertiary Polytechnic having 20,000 Wintec students in the heart of the city. Hamilton City Council has about 400 centrally located staff while the Waikato District Health Board has 600 city based staff and the Tristram Precinct on the corner Tristram, Bryce and Ward Sts (formerly known as Hamilton Central Shopping Centre) will accommodate about 1000 employees due to the relocation of the Waikato Regional Council into the CBD in mid-2020.
"Hamilton city is also well serviced by a railway station just a few minutes from the CBD, while the airport is just 15 minutes south."
Neale says the Hamilton CBD office market is "re-inventing" itself with a large number of properties being redeveloped and refurbished to meet the demands for higher grade office space.
"Grade C makes up around 38 per cent of the total office capacity in the market, while the higher quality Grades A and B together account for 25 per cent of the market, up from 15 per cent in 2012.
"The overall office vacancy rates have remained steady at around 7 per cent.
"Grade A vacancy decreased to 3.5 per cent in the six-month period to June 2018, which was the lowest since December 2013; while B Grade increased by 0.4 per cent to 3.5 per cent."
Neale says it appears that repurposing office space to non-office uses is now an increasing trend within the Hamilton CBD.
"Several C and D grade spaces have been converted into mixed use hospitality or residential uses and this looks set to continue with a number of under-utilised and vacant CBD sites transacting in 2018 that have plans for mixed use commercial/residential developments; including shared and co-working spaces; along with the redevelopment and upgrading of existing commercial space."
Further north of Hamilton, and south of Auckland City, NAI Harcourts brokers are marketing a two-level, tenanted office building in Papakura.
"This property is ideal for investors looking for a long-term hold," says Peta Laery, who with colleague Andrew Bruce, is offering 16 Elliot St for sale by deadline private treaty closing 3pm Thursday July 18.
"This 1980s' building with 10 car parks has a 17m road frontage to Elliot St and is located just off Great South Rd, the main road running through Papakura and South Auckland," Laery says.
"The Papakura State Highway 1 motorway interchange is nearby; it's just a few minutes' walk to the Papakura railway station and a short drive to the upmarket Karaka residential subdivision located right across the SH1 motorway."
"It's leased to chartered accounting firm Skipper Lay Associates, who have merged with Campbell Tyson, until April 1, 2020, with a six-year right of renewal and earns $122,566 per annum net plus GST."
Bruce says the 605sq m building encompasses 11 partitioned and modern offices with additional open plan areas, a meeting room, service rooms, rear storage and lunchroom/amenities.
The ground floor has an area of about 217sq m, the first floor around 323sq m and there is about 65sq m of storage space.
Building construction is of concrete foundations and flooring, concrete block exterior walls, fibrolite panels, steel exterior cladding and aluminium joinery.
Bruce says a sealed concrete front yard provides eight marked parking spaces and there are two additional covered parking spaces along the side of the building.
"The landlord owns the internal partitioning and ceilings, flush and wall mounted air conditioning, carpets, blinds, kitchen bench, wall oven and dishwasher." he says.
On the other side of Auckland, across the Harbour Bridge in Albany, NAI Harcourts agents Isaac Tankard and Geoff Thorne are marketing a consented residential development site at 145 Albany Highway, Unsworth Heights, for sale by tender closing at 4pm on Wednesday July 24.
"This property comprises a freehold land area of about 4182sq m with resource consent granted for 41 terraced houses," Tankard says.
"The proposed terraced houses include 1,2, 3 and 4 bedroom units within four blocks that have been designed for a staged development if required."
Thorne says the property is within the zones for Albany primary, junior and senior high schools.
"About 22 minutes' drive from Auckland central, it is easily accessed or exited from nearby Upper Highway on and off ramps."
"An overseas vendor is demanding the sale of this project," Thorne adds.
They negotiated with the buyers for 86 minutes before striking a deal.