Trophy hunters hot on the trail in Newmarket

The owner has spent $1.6 million refurbishing the property with the aim of attaining a 4-star green rating. Photo / Supplied

One of Newmarket's trophy commercial buildings, offering opportunities for both owner-occupiers and investors, is for sale with four levels of recently refurbished vacant office space and good returns from its street-level retail outlets.

The five-level, 4045sq m building on a 2028sq m site at 25 Teed St in Newmarket is offered for sale through Mike Houlker, David Gubb and Sunil Bhana, of Bayleys Auckland, with tenders closing Thursday, June 17 unless sold prior by private treaty.

The ground floor is fully tenanted to five retail tenants at an annual rental income of $296,980, plus GST.

The four vacant office levels above offer 3475sq m of office space with flexible options for occupants, said Houlker. There are also 84 secure on-site carparks, most of which are allocated to office-floor occupants.

Houlker said with the departure of Sinclair Knight Merz, the longstanding tenant of all the office space, the owner has undertaken a substantial refurbishment with the aim of attaining a 4-star green rating.

A total of $1.6 million has been spent on upgrading the lifts, installing new suspended ceilings with energy efficient lighting as well as renovating the interior walls and refurbishing the bathroom and amenity areas on the office floors. A new air-conditioning system was installed three years ago.

Houlker said the property has always been recognised as a good quality building and the refurbishment makes it among the best large-scale office space offerings in the market.

"Newmarket has a predominance of office buildings with relatively small floor areas, and it's very unusual for four contiguous floors of vacant space, each with floor plates of over 800 square metres, to become available in the precinct.

"The quality of the space and services, the good natural light on all four sides of the building and its central Newmarket location means it is attracting good interest from both investors and owner-occupiers.

"An added bonus for both these types of purchaser is the annual income of close to $300,000 being generated from the ground floor retail tenancies which will assist significantly with the servicing of any funding required for the acquisition of the property," said Houlker.

The shops range from 91 to 128sq m and have annual net rentals of $41,328 to $66,486, with four of the tenants on six to 12-year leases. The two largest tenants are boutique home interior fabric and furniture store Madder and Rouge, which also has a store in Wellington, and Cranfields gift, homeware and furniture store, which has other outlets in Wellington and Christchurch.

The other occupants are florist Cartier for Flowers, which has been in business for 15 years, Bambina cafe and Michael Holmes Premium Eyewear.

The largely level site is rectangular and enjoys a long street frontage of about 65m with a depth of about 31m. The building sits to the north of the site with both ground floor carparking on the southern side of the building together with level one carparking accessed via a one-way ramp system.

Sunil Bhana said the property's Newmarket location means it is close to some of Auckland's best shopping, restaurants and cafes as well as major transport arterials and public transport.

Teed St runs off Broadway, Newmarket's main street and is two blocks back from the main arterial road of Khyber Pass. It provides a mix of boutique retail and office uses and forms part of the wider Newmarket shopping precinct.

The land is zoned mixed use under the Auckland City Operative District Plan, which applies to former business zoned areas of the city, which are experiencing an increase in residential activity. The objective is to allow the development of vibrant urban areas by enabling a diverse and compatible mix of residential, retail, office, educational and leisure activities in areas close to existing town centres which have easy access to public transport.

As well as being a major retail destination, Newmarket is also a significant office precinct in Auckland with 138,000 square metres of office space. This represents more than a quarter of the total floor area in the whole city fringe area.

According to Bayleys Research's latest vacancy data, Newmarket's office vacancy stood at 11.2 per cent in January 2010, lower than the overall rate for the wider city fringe area, encompassing Parnell, College Hill, Newton, Grafton and Newmarket, which was measured at 13.5 per cent and the Auckland CBD which had a vacancy rate of 14.1 per cent.

A big increase in Newmarket office space over the seven year period to 2008 increased the inventory of A grade accommodation tenfold, from 4600sq m to 48,000sq m, said Gerald Rundle, manager of Bayleys Research.

"Having such a substantial inventory of top grade business space has worked well in drawing high-profile tenants such as ANZ, Vector and Westfield to Newmarket. The cumulative effect is that Newmarket is attracting more businesses."