Makeover transforms corner

Newly remodelled 'monochromatic' three storey building at 114 Dominion Rd. Photo / Supplied

Having dramatically transformed and leased a tired office block in Dominion Rd, Mt Eden, owner Dominion 114 Ltd has put the property on the market so it can move on to new pastures.

The 3600sq m, four-level office building was given a $2.5 million makeover in 2008 and now includes a ground-floor cafe, extra car parking and a new exterior.

The L-shaped corner site with wide frontages to Dominion and View Rds has 99 on-site car parks and its appeal is enhanced by a number of outstanding specimen cork trees gracing the property's entrance.

CB Richard Ellis brokers Colin Stewart, Jonathan Ogg and Lorne Somerville are selling the property by private treaty closing on February 25.

Dominion 114 bought the 1980s-built property in 2008 after stepping in when a proposed redevelopment, that included adding a floor and splitting the building into strata titles fell over because finance and resource consents were difficult to obtain.

Stewart says the calibre of businesses tenanting the building reflects the quality of its refurbishment. He says the building on a 3700sq m site had been "hacked about internally" and it was well overdue for a makeover.

"The owner came up with a renovation plan for the three upper floorplates of 1000 to 1110sq m and the 382sq m lower floor that suited the market, the surrounding area and the tenants it wanted to attract," Stewart says. "But rather than just a plain refurbishment of a building, this project made quite a statement."

New bathrooms were installed, carpet fitted, a new cafe was built and the lower floor partitioned. The air-conditioning was upgraded and energy-efficient lighting was provided to supplement the natural light pouring in from the floor-to-ceiling windows on all sides of the building. There are two lifts for the office floors that carry up to 12 people each.

Ogg says there was a lot of interest in the property, particularly when it was shrouded in hessian while the exterior was being reclad. "Once the scaffolding and hessian came down, quite a dramatic transformation was revealed and tenant inquiry increased markedly."

Connect, a leading IT, data and voice company, was the first tenant to sign up for new premises and it took naming rights. Other tenants include the first branch and New Zealand headquarters for Bank of Baroda, a global Indian bank, Sopranos cafe and Authentic Pilates.

The tenants pay $1.2 million a year in rent and the weighted average lease term is 5.1 years.

Stewart says 114 Dominion handpicked Sopranos to run the cafe because of the quality of its restaurant on Manukau Rd and cafe in the old Kiwi Bacon factory on New North Rd.

"Weekday business is brisk, and weekend trade is picking up, after a good review in the Herald. Plenty of on-site parking has been a drawcard for the cafe."

The property is surrounded by a mix of retail, commercial and residential. It adds to the transformation of the area from its traditional light industrial roots. Diagonally opposite the building, work is due to start at the end of next month on Anvil, a new development that will contain two 220sq m retail showrooms, five 250sq m office suites and 55 car parks. It is projected to be finished at the beginning of next year.

Somerville says Mt Eden is one of Auckland's most desirable city-fringe office locations.

"Demand for high-quality buildings is expected to remain resilient in the face of the current market downturn," he says. "There is a limited supply of existing office floorplates over 1000sq m and only two new buildings confirmed for completion in the next two years, bringing less than 12,000sq m of new office space to the market."

While there are many projects totaling more than 150,000sq m in the city fringe that have resource consent and could be built, Somerville says the vast majority have no tenants committed in advance and will be unlikely to get off the ground.

"In addition, the rents required for these new developments are often above $350 per sq m net, and with tenants typically unwilling to increase their cost of occupancy, achieving these rental levels is difficult."

CBRE's research shows office vacancy in the city fringe is forecast to be slightly over 10 per cent this year.

The property is situated at the northern end of Dominion Rd, which is one of the city's oldest highways.

Dominion Rd carries more than 175,000 vehicles and 50,000 bus passengers a week. The Auckland City Council has an improvement project in place to be completed by 2016. It will include wider bus lanes, more desirable bus stops, new lighting, furniture, trees and footpaths to make the area an attractive and safer place for businesses and people.

"These pending changes will be bound to enhance the property," says Stewart.