Many options in pipeline for Taranaki complex

The New Plymouth 167 Devon St West property encompasses an eight-storey tower block and three-storey premises. Photo / Supplied

One of New Plymouth's biggest office blocks, occupied by a global oil and gas producer, is for sale with future long-term options including redevelopment into a hotel or retirement village.

The multi-level office block at 167 Devon Street West is occupied by the New Zealand operation of international energy firm OMV which is heavily involved in oil and gas exploration and extraction in Taranaki; producing 85 per cent of New Zealand's gas supplies.

The property encompasses 5096sq m of offices spread over two blocks. One is an eight-storey tower constructed in 1984 with 2976sq m of net lettable floor area; and the other block is a purpose-built three-storey premises built in the 1970s with 2120sq m of net lettable floor area.

Both buildings occupy 3069sq m of freehold land. The taller structure has a new building standard (NBS) rating of 75 per cent, while a horizontal, low-level premises has an NBS rating of 74 per cent. Combined they have 37 on-site car parks.

The property was occupied for 40 years by Shell Todd Oil Services (STOS) which operated as a joint venture entity with Royal Dutch Shell. About 300 staff work in the office blocks which are joined by a covered walkway.

Austrian-based OMV bought out the STOS/Shell joint venture's operational assets last year including: its tenancy at 167 Devon Street West and all staff working there; and the Maui and Pohokura gas field extraction business along with associated pipeline and production assets.

OMV's lease on the Devon Street West office blocks runs through until 2023, with two further five-year rights of renewal; and generates an annual net rent of $910,834 plus GST and outgoings.

The freehold complex features in Bayleys Real Estate's latest Total Property portfolio magazine. The agency's Taranaki salespersons Iain Taylor and Alan Johnston; in conjunction with Brendon Bradley of Bayleys Tauranga are marketing it for sale by tenders closing at 4pm on Monday June 27.

Taylor says the Devon Street West property is one of the New Plymouth's most instantly recognisable commercial buildings due to its size and prominent location.

"There are many future pathways for this property given its Business B Environment Area zoning under New Plymouth District Council's plan," he says.

"Most obviously, as the cornerstone of New Zealand's oil and gas sector, OMV can continue as the sole long-term tenant of the site in the country's foremost fuel production province. There are few, if any, other commercial office sites of this size in New Plymouth.

"From a longer-term perspective, the linked office complex could be repurposed into a hotel – with the upper levels of the tower block having unobstructed 360-degree coastal and sea views; and inland to Mount Taranaki.

"The inter-connecting walkway could also be reformatted to enable the tower to operate as a hotel, and the street-frontage building to continue as a commercial office premises. With vehicle access from both Devon Street West and Dawson Street, both entities under this possible format could operate independently of each other.

"Or opting for an 'all-in' business model, both buildings could be refurbished into one commercial accommodation venue. Having dual vehicle access points would enable easily accessible guest parking.

Johnston says the flexibility of the zoning allows for potential residential use close to the New Plymouth CBD opened up the possibility of conversion into a large retirement village.

"With stock exchange listed retirement village operators Ryman Healthcare and Summerset already present in New Plymouth, the size of this site, city location, and the building infrastructure already in place, could well be attractive to the likes of Metlifecare or Oceania to establish footprints in the sector in Taranaki," he says.

Bradley says former long-term tenant Shell Todd Oil Services spent considerable sums regularly upgrading its offices within 167 Devon St over the four-decade occupancy.

"As a result, the open plan workspaces, meeting rooms, and staff amenities are of a modern and well-presented standard.

"The tower block, housing OMV's reception area and commercial-grade staff cafeteria, was repainted and refurbished only a few years ago as part of a long-term maintenance programme. The top floor of this block is also fitted out to a superior standard including a high-stud ceiling."