Historic General Building sells for $42m

Auckland's historic General Building has sold for $42 million to a local buyer who plans to restore the landmark office tower.

Built in 1928, the CBD property, on the corner of Shortland and O'Connell streets, is among the best examples of Chicago-style architecture in New Zealand.

Blair Peterken, of Colliers International's capital markets team, who handled the off-market sale, says there is strong investor demand for iconic heritage buildings in the central city.

The General Building was bought by Southbourne Holdings, a privately owned property company founded in 1986 by managing director Chris Dickey. "It is the latest multi-million dollar heritage building to be purchased by a local New Zealand entity," Peterken says.

"There is enormous appetite for well-presented heritage buildings, particularly in top CBD locations."

Peterken says historic commercial buildings are often seen as trophy investments, which explains their popularity among investors.

"The problem for investors is the limited supply of such buildings — you obviously can't build a heritage building.

"There is strong tenant demand for well located, well presented, functional character buildings.

"Freehold heritage buildings are particularly difficult to acquire, as many of them are strata titled with multiple owners. Examples include the strata-titled Dilworth Building at the corner of Queen and Customs, the South British Building on Shortland St and the St James Building opposite the Auckland Art Gallery."

Southbourne Holdings says: "This is a fantastic opportunity to own and work with one of Auckland's iconic landmark properties.

"It has so much potential and we look forward to working with new and existing tenants during the process."

While the building remains in good condition, it needs active management to retain and attract the best tenants.

The General Building was originally built for the Yorkshire Insurance Company, which requested fine and ornamental detail. Its Chicago-style architecture, ornate lobby and exterior detailing make it arguably Auckland's most revered heritage office building.

Chicago-style buildings are typified by their steel frame construction, large windows in a grid configuration, and limited exterior ornamentation, all of which the General Building displays.

The 10-level building is set on a 771sq m site with a gross floor area of 6770sq m and a net lettable area of 5486.5sq m.

With typical 578sq m floorplates, the spaces can be easily split into one to four tenancies capable of accommodating five to 60 people. The property also boasts a good NBS rating, having undergone seismic strengthening in recent years.

The General Building has been home to some of New Zealand's finest lawyers, and continues to boast many leading legal practitioners among its tenancies.