The Victoria Park Markets complex at the fringe of the Auckland CBD.
A zoning change permitting ground floor office premises at Auckland's Victoria Park Market is predicted to widen the appeal of the historic buildings for tenants, owner occupiers and investors.
A resource consent application has been approved by Auckland Council for 50 per cent of the total gross floor area of the ground level courtyard premises to be used as office space.
In its decision, the council said the change of use to allow a previously non complying activity would not result in any modification of existing heritage buildings and would provide economic benefits and improve the overall financial viability of the complex.
It noted that office activities will complement and provide support for the existing food beverage and retail activities by attracting people to the market.
"The fact that office space can now go on the ground floor of buildings is a substantial and significant change," says Reese Barragar of Barfoot & Thompson Commercial, who is marketing space within Victoria Park Markets with colleague Duane Mullooly, and Bayleys Auckland agents Kate Kirby and Leah La Hood.
"It provides for much greater occupant flexibility and will enable a better and more viable mix of uses to be developed," Barragar says. "Having more office occupants and their staff working there will add greater diversity and provide more critical mass for retailers along with ensuring there is not an oversupply of retailing. It opens up a new future for this Auckland icon."
Barragar says there has been a drop in the prices of units to reflect the lower rental levels that apply for office tenancies and this would make them more attractive to owner occupiers and investors looking for add value opportunities.
Kirby says there is strong demand from businesses for character office accommodation in good locations.
"There are lots of businesses which don't want to be in the big impersonal office towers and prefer individualised buildings with character features such as exposed brick walls and high stud, timber ceilings. There is a good selection of this type of heritage property at Victoria Park Market along with funky new space," she says.
"We are experiencing particularly strong demand from owner occupiers for this type of property and Victoria Park Market has a variety of different sized unit titled premises available for purchase."
Currently for sale for retail, showroom and/or office use are vacant units ranging from 21 sq m upwards. Two of the premises have high profile frontage onto Victoria Street West. They are both about 128 sq m single level units and have asking prices of $860,000 and $850,000 respectively.
Leah La Hood says the character, loft-styled buildings would suit a wide range of professional users.
"These attractive adjoining units feature exposed brick and beams, a very high stud and good natural light throughout. They are located a very good position near the corner with Union Street in the prime retail area of Victoria Park Market but would also suit showroom or office use. They can currently only be accessed from within the market but one of them has obtained the necessary heritage consent for another point of access from Victoria Street."
Also part of the heritage building structure is a small unit of just under 27 sq m at the opposite end of the market near the car park and close to Mansons TCLM's The Boutique apartment development which is currently under construction.
Mullooly says this unit also offers character features such as exposed brick and provides a very good entry level opportunity for owner occupiers with an asking price of just $175,000. An even smaller unit of 21 sq m is available for purchase in the Central Pavillion, a new concrete building, which has an asking price of $150,000.
The largest property for sale at an asking price of $3.5 million is a newly built concrete building on the corner of Drake St and Union St which comprises three freehold units totalling 585.5 sq m on two floors with decks of 176 sq m on the upper floor and roof top.
Mullooly says the decks were aimed at increasing its appeal to a restaurant tenant but would also suit an office business conducting a lot of client entertaining.
"The building has already been used for two separate retail shops but could just as easily be used as office or for a hospitality outlet," Mullooly says. "It's a good looking building but the inside is largely still a shell which means a new owner pretty much has a blank canvass from which they can make a strong statement about their business. It would suit an owner occupier who could move into the whole building, or occupy one floor and lease out the other, or it could appeal to an add value investor prepared to take a punt on leasing it up."
La Hood says the market has recently undergone a three-year $25 million refurbishment programme encompassing considerable earthquake strengthening of the entire complex, to bring it well above seismic code, reconfiguring retail premises and adding several hundred square metres of new floor space for food and beverage outlets on the upper levels. A number of new ground level buildings have also been added.
Located next to Victoria Park from which it gets its name, Victoria Park Market is bordered by Victoria Street West, Union and Drake Streets. Built over a century ago, it is the oldest example of a Victorian industrial building still standing in the central city. It began life as Auckland's first rubbish depot and its landmark brick chimney, known as The Destructor, was part of an incinerator that burned rubbish to generate power.
The property subsequently became home to council offices until these were decommissioned in the 1970s and it fell into disrepair before being reinvented as Victoria Park Market.
Kirby says Victoria Park market is located in the increasing popular Western Quarter precinct of the CBD which has attracted a large number of new office tenants such as Fonterra, Spark and NZME. because of its closeness to Victoria Park and the waterfront and ease of access to public transport and motorway links.
They can't find good tenants, and buyers have all the power.