New Plymouth's former chief post office will be one of the highest valued commercial properties ever to be auctioned by Bayleys when it goes under the hammer in Auckland early next month as part of Bayleys' latest Total Property portfolio auction.
Situated at 21 Currie St on a 3070sq m corner site at the intersection with Gill St in central New Plymouth, the building is in an area which has the city's highest pedestrian count. It is directly opposite Taranaki's largest retail mall, the Centre City shopping complex anchored by a large two-level Farmers Department store along with 55 specialty shops and 750 carparks.
Converted into a hotel and retail building, the property is anchored by Quest Serviced Apartments on the upper two levels with the ANZ Bank, NZ Post/Kiwibank and Kathmandu occupying the ground floor.
Paul Dixon, Bayleys' manager tourism, leisure and business sales, says the property has a 2013 Capital Valuation of $9,325,000 but it is expected to sell for in excess of that given it is producing net annual income of about $1.1 million a year and on the strength of its tenancy profile.
Dixon is marketing the property in conjunction with Alan Johnston of Bayleys New Plymouth office. Along with 11 other Total Property portfolio offerings, it will be auctioned on July 6 in Bayleys' Auckland auction rooms unless it sells earlier by private treaty.
"We have decided to auction it in Auckland because of current investor interest here in regional properties that have a strong tenant profile and which offer the prospect of a higher income return than would be received from a similar quality Auckland properties," says Dixon. "This is an attractive and well maintained investment property, with excellent tenants and leases that exceed the norm and would suit a passive high net worth investor, a family trust or a syndicate of investors."
The main building was erected in the early 1950s as Palmerston North's Chief Post Office with an extension to the eastern side of the building in 1996 to accommodate a Farmers Department store providing an additional ground floor area of 1233sq m plus roof top parking for 36 vehicles.
Dixon says the building has been solidly built with concrete foundations and floors, plastered concrete framed walls and reinforced concrete columns and main beams. He says it has a B-grade seismic assessment, meaning no further upgrading of the building is required, and also benefits from an above average stud height for a commercial building of three to four metres.
The top two floors totalling 2005sq m have been converted to serviced hotel apartments with the main access from Currie St leading to a reception and stairwell/lift area and secondary access from the first floor car park which has 16 parking spaces allocated to the hotel. There are 40 guest apartments, comprising 19 one-bedroom and 21 studio apartments plus a two bedroom manager's apartment.
Quest Apartments has a 20 year lease from December 2008 which generates around 60 per cent of the property's total income. The lease, with two five-year rights of renewal, has fixed two per cent annual rent increases with a review to market in 2018 and five-yearly after that.
Longstanding tenant ANZ Bank occupies 740sq m of space on the corner of Currie and Gill Streets on a three-year lease with three further three-year rights of renewal. Johnston says the bank has undertaken its own extensive fit out of its premises including the provision of lights, ceilings and air conditioning.
New Zealand Post /Kiwibank leases 322sq m on the south western corner of the building and has recently exercised the first of two six-year rights of renewal.
Katmandu occupies all of the former Farmers space on an eight year lease from November 2010 with four three-year rights of renewal.