Trophy shops in a 'mini skyscraper'

A trio of retail outlets in Queen St's historic Landmark House are among more than 30 commercial and industrial properties up for auction.

High-calibre trio of units in Queen St’s historic Landmark Building to be auctioned early next month

Three Queen St central-city retail units on the ground floor of Auckland's historic Landmark House are among more than 30 commercial and industrial properties which will be auctioned early next month as part of Bayleys' latest Greater Auckland portfolio.

Located at 187-189 Queen St, on the corner with Durham St West, the offerings encompass two retail units of more than 170sq m and a smaller outlet of 56sq m which will be auctioned individually on Wednesday, March 4.

They are being marketed by Alan Haydock, James Chan and Damien Bullick of Bayleys' Auckland office.

"These are 'trophy' retail investment properties which comprise the street-level floor of one of central Auckland's most distinctive art deco character buildings," says Haydock.

"They are also situated in a highly sought-after Queen St location where retailers benefit from excellent exposure to some of the highest pedestrian counts in the CBD.

"Not surprisingly, Queen St shops of this calibre are tightly held by both owners and tenants, with the three main ground-floor occupants in this building having been there for between 12 and 19 years."

The largest property for sale, designated Unit B, totals 176sq m and generates combined net annual rental income of $438,759 from two occupants: the multinational eyewear company Optical Prescription Spectacle Makers (OPSM) and NZ Muscle.

Landmark House at 187-189 Queen St is leased by both OPSM and NZ Muscle Ltd. Photo / Patrick Gailer

"A feature of this unit is its huge pedestrian exposure with substantial frontages to both busy Queen St and Durham St West," Chan says. "Anchor tenant OPSM has been there since 1996 which is a reflection of the strength of its corner location."

OPSM opened its first store in Macquarie St, Sydney, in 1932 and is now part of the multinational retail group Luxottica, which has about 7000 stores worldwide - including the OPSM chain of more than 400 stores across Australasia.

The current nine-year lease to Luxottica Retail New Zealand runs from January 2008 and is producing net annual income of $333,759 with two-yearly rent reviews to the Consumers Price Index (CPI) plus 2 per cent.

The other occupant of Unit B is NZ Muscle, which leases 32.5sq m of the unit with its frontage on to Queen St.

Founded in 2006, the New Zealand owned and operated business retails sports nutrition and body-building supplements. It has recently extended its lease for a further six years from last month at an initial rent of $105,000 with the same rent review structure as for OPSM.

Also in a prime position on Queen St is the 56sq m Unit C, which is being auctioned separately. It produces a net annual rental income of $160,000 from Lush, another longstanding tenant, which has been there since 2000.

Lush recently extended its lease for a further six years from last November with two-yearly rent reviews to the CPI plus 1.5 per cent.

Lush specialises in handmade cosmetics and has 6000 employees worldwide employed in more than 800 stores, including nine in New Zealand, and in several factories in 46 countries.

A retail unit within Landmark House at 187-189 Queen St is occupied by longstanding tenant Lush. Photo / Patrick Gailer

The third property for auction, Unit A, encompasses a 171sq m tenancy occupied by Chinese restaurant BBQ King, which has extensive frontage to Durham St West.

BBQ King has been in its premises since 2002 and is just four years into its current 12-year term, which at present is producing a net annual rental income of $85,379.

Chan says it is a popular restaurant that benefits from a high level of patronage from Asian students as well as from the big office workforce in the city and an ever-growing inner-city residential population.

"Estimates suggest the CBD's current population of just over 26,000 could almost double to over 47,000 people by 2031," he says.

Bullick says Landmark House is in a strategic CBD corner location with the Property Institute of New Zealand's most recent Pedestrian Count Survey showing it to be near the fourth-highest pedestrian count position at 197 Queen St in relation to 38 street sites that were surveyed.

"Queen St retail is going from strength to strength with the entry of international luxury tenants including Louis Vuitton, Gucci, Dior, Prada and fashion retailer Top Shop which is opening just a few doors down in March," says Bullick.

Haydock says the nine-level Landmark House is one of Queen St's standout older buildings. It was significantly refurbished and seismically strengthened in 2000, then the upper floors were renovated in 2004 to create boutique character office space. The building was also strata titled at this time.

Landmark House was originally built as the headquarters of the Auckland Electric Power Board (AEPB) between 1928 and 1930 and was described as a "miniature skyscraper", being one of the tallest structures in Auckland at the time. It was the first building in the city to be floodlit and was proclaimed at the time to have the fastest lift in the country.

The building was designed to provide the AEPB with a grand, imposing presence on Queen St at a time when electricity had superseded gas and coal as the major source of power.

The AEPB, which was then the sole provider of electricity in the Auckland isthmus, celebrated the dawning of a new era by opening the building on the same day as the hydro-electric dam constructed by the Public Works Department at Arapuni on the Waikato River in the southern Waikato.

Heritage New Zealand says the building was also a celebration of communal pride, with New Zealand motifs being used and local firms, including the architects, Wade and Bartley, preferred in its construction.

The AEPB offices were on the upper floors of the building, while the rest was rented out to other commercial and retail businesses. A ninth floor was added in 1933.

The AEPB moved its headquarters to Newmarket in 1968, taking the panelled boardroom from Landmark House to its new premises.

The building has a Historic Places Category 1 classification with Heritage New Zealand describing it as a highly individual landmark and the most striking early skyscraper-styled building in northern New Zealand.

Its pressed cement facade, patented by Hall and Stanborough, is especially unusual, while notable internal elements such as decorative plasterwork have been retained in its lobby and original top floor.