A prime corner site opposite the main entrance to Auckland Hospital has been placed on the market for sale.
Bayleys Auckland salespeople Mike Adams, Phil Haydock and Angela Yang are selling the 1068sq m property — home to a character three-storey building comprising a mix of residential and retail tenancies.
The freehold land and buildings, at 1-9 Park Rd at the corner with Grafton Rd, are for sale by a tender process closing on March 27.
The brokers say the property is being sold as part of a deceased estate and will not be sold prior to the tender closing date. It features in Bayleys' latest Total Property portfolio magazine.
Adams says Auckland Council's Business Local Centre zoning for the corner site provides for the "convenience needs" of surrounding residential areas – sustaining retail operations, commercial and office premises, food and beverage venues, and small supermarkets on the lower levels.
"The property has strong and diverse revenue streams that would provide a new owner with a holding income while planning the property's future," he says.
In their current format, the multiple tenancies within the Park Rd block are forecast to earn $433,103 in the year ending March 30, 2018 — with $327,340 gross coming from the residential component, and $105,763 net coming from the commercial component.
"The two upper levels of the property comprise 19 residential tenancies, consisting of studio, one, and two-bedroom flats rented for between $290 and $450 per week. All are on periodic lease terms. The flats each have their own kitchen and bathroom facilities and have access to a shared communal laundry housed in a small stand-alone building at the rear of the property," says Adams.
The complementary street-level retail tenancies consist of:
• The Jewel of Bombay leasing two sites – one for its restaurant operation, and a sub-lease to a cafe business — which has a final potential lease expiry of 2020 if the renewal option is exercised;
• A barber's shop which has a final potential lease expiry of 2024 if all renewal options are exercised; and
• cafe operator Cafe Karadenz which has a final potential lease expiry of 2020 if all renewal options are exercised.
Adams says that a new building on the Park and Grafton Rds corner would most likely make more efficient use of the available space by increasing the residential floorplate by another level.
"Provisions under the Business Local Centre zoning allow for the construction of buildings up to four storeys high — with a residential component on the upper levels," Adams says.
"Additionally, with the right visionary design, there is an easily identifiable opportunity to further increase the available land use footprint by reconfiguring the existing car park layout to a more efficient configuration, or potentially adding a second level of car parking."
Yang says the property's location within the Auckland Grammar school zone creates a broad target market for tenants — including medical staff, university students, and professionals working in both the CBD and Newmarket.
"As one of Auckland's biggest single-site employers, Auckland Hospital's expansive catalogue of wings and blocks was an automatic cornerstone factor influencing any future low-rise development on the Park Rd and Grafton Rd apex," she says.
"With Auckland Hospital directly across the road, any residential development on the site could expect to derive a high degree of tenant interest from medical staff working in the surgical, patient recovery or administrative sectors – either from an owner-occupier perspective or from an investment standpoint."
Haydock says the property's closeness to the University of Auckland provides another redevelopment option for the site as privately-operated halls of residence.
"The convenience factor of dwellings in this location is further extended across the social spectrum of tenants – with the busy and eclectic Karangahape Rd and upper Queen St hospitality precincts just a short walk away," he says.
"In addition to sustaining the day-to-day turnover of the street-level retail tenancies, Auckland Hospital is visited by thousands of people every day en route to, or coming from, visiting sick friends and relatives. This constant catchment delivers considerable foot traffic past the front doors of the foodservice and retail sites."