A two-storey Invercargill city building housing one of the city's oldest legal firms and the Southland offices of the three Government departments has been placed on the market for sale.
"Constructed in the late 1990s, it has been meticulously maintained over its life span," says Hayden McCallum, salesperson for Bayleys Southland, who is marketing 45 Yarrow St for sale by deadline private treaty closing at 4pm on Thursday March 17 unless it sells earlier by negotiation.
"This recently renovated standalone 2520 square metre freehold premises on1858 square metres of land is regarded as one of Invercargill's best commercial properties," McCallum says. "The property is tenanted by the Inland Revenue Department [IRD] and leading law firm Preston Russell with gross leases earning a total of $407,820 plus GST per annum giving a net return of $330,168 plus GST.
"The primary tenant in the building is Preston Russell Law which acts as the province's Crown solicitor and has been operating in Southland for 155 years. The law firm occupies the entire upper floor on a lease generating $221,136 per annum and running through until 2022 with four additional four-year rights of renewal.
"Preston Russell Law undertook a major first floor renovation in 2013 and a new air conditioning system was installed in 2014 at a cost of $120,000," McCallum says.
The IRD has occupied the ground floor of the premises for the past 15 years. Its naming-rights' tenancy generates a rental of $186,684 per annum and runs through to later this year, with two further three-year rights of renewal.
McCallum says the IRD has sub-leased some of its space to other Government agencies including Internal Affairs and the Ministry of Innovation and Development.
"The IRD and its sister government agencies on the ground floor have maintained the standard of their interior throughout their tenancy. This reflects not only the professionalism of their services, but also meets the Government edict that all state offices must be housed in earthquake-resilient premises.
"Extensive renovations of its floor space currently being undertaken by the IRD include the installation of a new access and security system, new interior decor and fit-out, and an upgrade of the closed circuit TV camera electronics and office security layout."
The building is located on the northern fringe of Invercargill CBD in the city's large retail precinct adjacent to well-known stores like Farmers, Rebel Sports and Briscoes, and in part of town zoned Business Sub Area which allows for a mix of retail and commercial activities.
McCullum says the building has 20 onsite car parks and, with around 100 employees working inside the building, both tenancies have their own individual staff amenities - including bathroom and kitchen facilities.
"The property exceeds 100 per cent of New Building Standard [NBS] under the Initial Evaluation Process [IEP] assessment method and buildings with ratings higher than 66 per cent are generally considered 'safe'.
"The property has a 2014 rating valuation of $3.6 million and we have already received interest from potential buyers in Canterbury, Tauranga, Auckland and Southland."
McCullum says that, from an investment perspective "on multiple fronts", there are few buildings like 45 Yarrow Street in Invercargill which house quality national and leading provincial tenants in modern and well maintained premises.