A character building in Freemans Bay is one of 17 commercial and industrial properties will go under the hammer early next month in Bayleys' next Total Property portfolio auction.
Located on a 276sq m site, at 3 College Hill, the fully leased three-level high-profile building produces annual rental income of $143,338 net.
This will increase to $151,405 net in November with further increases scheduled for each of the property's three leases, says Cameron Melhuish who is marketing the offering with Bayleys' Auckland City & Fringe division colleagues Andrew Wallace and Genevieve Thompson-Ford. The property goes auction on August 2, unless sold earlier.
It has a premium position in sought-after College Hill opposite the New World supermarket and close to Victoria Park, Wynyard Quarter and the CBD, says Melhuish.
"It offers an attractive and well maintained building with a good mix of tenancies providing long-term rental growth."
The 592sq m building comprises basement car parking and storage, a spacious ground floor retail tenancy and a character office tenancy above.
The ground floor and basement are leased to Boardertown, an established retailer of snowboards, skateboards and associated streetwear. The current four-year-lease expires later this year but it has entered into a new lease agreement for a six-year-term from November 1, 2017 at an increased rental. There will also be subsequent two-yearly rent increases of either four per cent or to market, whichever is the greater.
Melhuish says the 192sq m ground floor retail tenancy features a mix of polished concrete and wooden floors. It has direct access to the 150sq m basement, now utilised as a customer carpark.
The upper floor has about 250sq m of predominantly open-plan, character office space. It provides beautifully presented office accommodation, with polished wooden floors, an impressive high-stud pitched roof with exposed wooden trusses, and multiple skylights which provide an abundance of natural light, says Melhuish. There is also a mixture of small meeting rooms, a large boardroom, an island kitchen with an oven and stove-top and a bathroom and shower. This floor is occupied by One to One Hundred, an architectural visualisation firm. Established in 2004, it has an eight year lease from August 2016 with a 7.4 per cent rental increase scheduled for August next year and annual three per cent increases following that.
The remaining tenancy is a three-year-lease from November 2016, with one three-year right of renewal to Outdoor Advertising Ltd and annual rental increases of three per cent. It uses the exposure the building provides to high volumes of traffic coming down College Hill for billboard advertising, says Wallace.
The property's Business-Mixed Use zoning offers opportunities to add-value in the longer term. It allows for a wide range of commercial and residential activities, up to a height limit of 18m, subject to resource consents, Wallace adds.
"While it's very much a case of enjoying the cash flow the property now offers, potential longer term add-value angles include additional floor area, height or residential conversion."