Takapuna building could be new tower site

529-533 Lake Rd (identified by red border) offers development potential plus short-term rental rewards.

A high-profile corner site occupied by a three-level commercial building in central Takapuna could be suitable for a multi-storey development of up to 18 floors under proposed new zoning and is being marketed as an excellent "add-value" investment opportunity.

"This strategic Takapuna CBD site at 529-533 Lake Rd will always be a highly desirable location," says Matt Prentice of Colliers International who, with colleague Shoneet Chand, is selling it by deadline private treaty, closing on November 6 unless it sells before that date by negotiation.

"North Shore properties like this come on to the market very rarely," Prentice says. "What makes this particularly special is its genuine rental and development upside. Situated on one of central Takapuna's most prominent corners, the building and its location present multiple opportunities for development under both current and proposed council zoning.

"The property's total freehold land area of 959sq m will be zoned Metropolitan Town Centre under the Proposed Auckland Unitary Plan that will potentially allow for up to 18 storeys of development.

"The scope for this sort of development on a prime CBD location with excellent road frontage is a significant driver of the property's value. Furthermore, under the proposed new plan, Takapuna city may benefit from priority investment over the next 10 years."

Chand says "another carrot" for purchasers beyond any development consideration is the potential for short-term growth in the property's rental return, given comparatively low rental rates for a significant portion of the property.

He says the fully leased property with a net lettable area 2154sq m already represents a very good spread risk investment with eight tenants offering a mix of both office and retail space and providing an annual rental return of about $512,000.

"Some of the tenants have been there for well over a decade. This further emphasises the appeal of the location for prospective and existing tenants and ultimately to prospective buyers," says Chand.

The site is anchored by national tenant AMI Insurance, which occupies the majority of the building including the mainly open plan 767sq m first floor on a six-year lease from January 2012 and also 763sq m of space on the second (top) floor.

"The existing three-year lease details for the second floor highlight significant added-value potential for this under-rented portion of the property," Chand says. "Providing more future options is the approval of subdivision consent last year for unit titling into individual tenancies on the property."

The ground floor is divided into retail and restaurant tenancies, including the well-known Genghis Khan Mongolian restaurant.

Another strong feature is the relatively high threshold rating of 71 per cent NBS (New Building Standard) for earthquake risk.

Chand says the attractive, multi-level building has a functional design with significant glazing to the front and side wall. "It has classic exposed structural components, as well as a substantial canopy to the frontage that provides weather protection for staff and clientele."

Being in the heart of Takapuna, it is close to major transport routes on the North Shore, with a 10-minute drive in normal conditions to the Auckland CBD.

Nearby amenities include a large public car park, the Shore City shopping centre and more than 50 bars, cafes and restaurants.

"The Takapuna Beach Business Association is driving redevelopment projects that continue to attract quality tenants," Chand says.

"Initiatives like the Takapuna night market, outdoor theatre, sponsored events and continuing local upgrade projects are injecting life into the city as a vibrant beachside commercial centre."