The newly-refurbished building at 289 Great South Rd, Greenlane, is a strategic land holding. Photo / Supplied
A newly-refurbished, high-profile Auckland corner office with a long-term multinational tenant is on the market for the first time in 14 years.
The Oji Fibre Solutions building at 289 Great South Rd, Greenlane, is for sale by deadline private treaty through sole agency Colliers International. Offers close at 4pm on Wednesday July 5 unless sold earlier by negotiation.
The property is featured in the upcoming Colliers Portfolio, which will be published on Friday.
Auckland investment sales director Gareth Fraser and international sales director Richard Kirke, are exclusively marketing the property to local and overseas investors.
The freehold 1395sq m property has a net lettable area of 1774.9sq m, including 29 covered and 30 uncovered car parks.
Fraser says it is a sought-after property and has attracted plenty of investor interest despite not being available for purchase for many years.
"This is a chance to buy a newly-refurbished building on a strategic land holding, with excellent long term add-value and development options.
"Buyers will be attracted to the property's long-term lease, fixed rental growth and established multinational tenant."
The property is occupied completely by Oji Fibre Solutions (NZ) Limited, which has the Japanese Government as a key shareholder.
"Based in Japan, the Oji Group is the fifth largest pulp and paper company in the world," says Kirke. "The majority of operations are based in New Zealand, where they are the major manufacturer of kraft pulps and packaging products for local and global markets."
A 12-year lease commenced on December 1, 2015, with two six-year rights of renewal remaining. It is currently returning a passing income of $507,563.40 per annum plus GST.
"The lease has bond-like characteristics, with fixed growth locked in at 3 per cent per annum," Fraser says. "Three-yearly market rent reviews feature minimum growth of 3 per cent and upside, to a cap of 10 per cent each market review. There's plenty of potential to redevelop or reposition the property on lease expiry."
The building has an A-grade seismic rating, meeting 84 per cent of the new building standard.
It was extensively refurbished in 2015, with approximately $2m invested. Technical upgrades include a new Kone elevator, new and refurbished air conditioning, fibre internet, a new access control system, and new LED light fittings throughout.
Interior walls were re-plastered and painted, new ceiling tiles installed, and floor coverings replaced with a mix of new carpet tiles and polished concrete. New bathrooms were also installed.
External refurbishments included some new exterior cladding, landscaping, a new ground floor terrace with a sliding door and joinery, new car park line markings, and resurfacing and waterproofing of the top of the car park ramp.
The property is proposed as Business Mixed Use under the Auckland Unitary Plan and would blend in to the surrounding suburbs if redeveloped in the long term to residential. Neighbours include Volvo, Land Rover, Subaru and Hyundai dealerships, largely owned by strategic landowners.
Kirke says local and overseas buyers are actively seeking out office investment opportunities in Auckland, as tenant demand for office space in the city is at an eight-year high.
"A lack of stock and competitive pricing is being fuelled by owner-occupiers and investors," he says. "Historically low interest rates are projected to continue into the near future, causing further downward pressure on yields."
Kirke says the Great South Rd property is at the city end of the Greenlane commercial precinct, part of Auckland's Southern Corridor.
"Vacancy rates along the Southern Corridor are nearing record lows, making it one of Auckland's most sought-after commercial property precincts."
The property is on a prominent corner site at a busy intersection with Campbell Rd. Great South Rd is a key arterial route that connects Auckland's western and southern suburbs to the commercial precincts of Newmarket, Greenlane and Ellerslie. It offers multiple points of access to State Highway 1.
The Campbell Rd intersection is roughly halfway between the SH1 interchanges at Greenlane and Ellerslie-Panmure and adjacent to the Main Highway intersection, which links Great South Rd to Ellerslie. Campbell Rd itself connects Great South Rd to Greenlane, Cornwall Park, Onehunga and ultimately the airport.
Kirke says the property has good on-site parking. "Many bus routes service the property, while Ellerslie train station is within a short walking distance."