B is for best in city fringe Grafton
Building B which is for sale at 8 Nugent St, Grafton.
A large fully-tenanted green star-rated commercial building within a new master planned precinct in Grafton, in Auckland’s city fringe, is expected to be keenly sought after by investors.
Building B at 8 Nugent St is for sale by international deadline private treaty through Warren Hutt and Jonathan Ogg of CBRE and Layne Harwood of Knight Frank. The deadline for offers is Wednesday July 15.
The building is part of a campus-style development that includes an apartment complex, a purpose built car parking building.
“This is an outstanding investment opportunity, comprising a well-located A-grade building with a diversified income stream from premium tenants like Pfizer, Mobil Oil and New Zealand Cricket,” Hutt says.
“The building is constructed to a very high standard and is extremely well presented. It is 100 per cent leased to 11 high-quality and well-known tenants, who were attracted to the building because of its big, efficient floor plates and a car parking ratio that is almost unheard of in this part of the city fringe.”
Hutt says Building B was developed by the Neil Group, one of Auckland’s oldest and most respected property developers and was completed in 2009.
Five levels of modern, naturally-lit office and showroom space have three metre high-stud interiors and flexible, easily-divisible floor plates. With a 7623 sq m total net lettable area, Building B is on its own freehold title and the sale includes 244 car parks.
“It has an A-plus seismic strength rating at 100 per cent of New Building Standard [NBS], excellent-quality fit outs and various sustainable features which have contributed to a Four Green Star design rating from the Green Building Council,” Hutt says.
“The building incorporates several state of the art sustainable design features including orientation and glazing to capture natural light, reinforced concrete contributing to thermal mass, 50 per cent more fresh air than required by the building code, efficient lighting, recycling and bike racks with associated shower and change facilities.”
BodyTech gym occupies the entire ground floor while the upper levels are leased to Aesthetics Lighting, Pfizer NZ, Woods, Te Pou, Mobil Oil NZ, NZ Cricket, The Neil Group, Digital Island, Bankstream and Alexander & Co.
It is managed by the Neil Group, the owner and developer, which has been in the property and land development business for more than 50 years.
“This ensures its ongoing quality and a number of the tenants have also invested significantly in their own high quality fit outs,” says Hutt.
Ogg says the current rental levels offers good future upside potential. “Space in the building was leased at competitive rates, and all the tenants are well-established so the property has a very good long-term growth prospect.”
He says the annual net income of $2,973,961 plus GST contains excellent diversity and is split between a range of international and local corporate tenants with a very good weighted average lease term of five years.
Ogg says the tenants all provide strong covenants. “The quality and variety of tenants here is second to none. Global giants Pfizer and Mobil Oil need no introduction. Woods is a leading multi-disciplinary professional services consultancy founded more than 40 years ago. Aesthetics is part of Gerard Lighting which is the largest lighting group in Australasia with over 1400 staff and Digital Island is a progressive Kiwi telecommunications provider and a Deloitte Fast 50 award winner.
“This property’s combination of high-end occupier mix and outstanding building quality means this is a reduced risk and low maintenance investment holding.”
Harwood says those factors, along with the ‘up and coming’ characteristics of the property’s location, mean the building is likely to represent exceptional value for the purchaser.
“Compared with some of the recent transactions we’ve seen of newer stock on the city fringe, this building will be very good buying for a long-term investor.
“The relative lack of high-quality office investment opportunities on the market in central Auckland is also expected to contribute to strong demand for this property,” Harwood says.
“The owner has successfully provided an attractive precinct that has proven popular among occupiers,” says Harwood. “The on-site amenity is excellent including a cafe, 602 car parks and the BodyTech gym which incorporates a heated swimming pool, spa and sauna.”
The building is part of a new Mixed Use zoned development containing retail, apartments, office premises and car parking surrounding a central plaza, known generally as 8 Nugent.
On completion the 8 Nugent development will comprise five buildings. Already on site is an apartment building with convenience retail and a car parking building, along with Building B which is now being offered for sale.
Ogg says the development offers a combination of offices, showrooms, café, residential apartments, retail services and a gym all within the attractively landscaped plaza.
“It has all the ingredients of a very well-connected urban environment, which is why there has been such strong interest in both the office development and apartments there.”
Harwood says the surrounding area offers further complementary services and amenities. “There is plenty of shopping and entertainment in nearby Newmarket, as well as numerous establishments within a short 500 metre walk of the site including pubs, cafés, restaurants, childcare and medical facilities including Auckland Hospital.”
Bus and rail transport options are located within easy walking distance of the property located just off Khyber Pass Rd on the border of Grafton, Newmarket and Mt Eden.
Hutt says the area is on the upswing, with many local owners committing significant capital to upgrade their buildings. “A notable example in the immediate vicinity of 8 Nugent is the refurbished Orion building on the corner of Khyber Pass and Grafton Rd, where further development and extension is also planned, together with the impressive Argosy-owned Studio Italia opposite.”
On-ramps to the State Highway 1 north-south motorway and the SH 16 northwestern motorways are nearby.
“Occupiers like this part of the city because of its easy access and lower occupancy costs when compared with the CBD,” Ogg says. “The combination of its location and highly-specified construction is expected to underpin tenant retention and investment value well into the future.”
Hutt says large-scale developments in the surrounding areas further increasing the appeal of the property.
“Auckland University’s redevelopment of the former Lion Brewery site and the proposed City Rail Link are two key projects which are putting the spotlight on the Newmarket/Mt Eden area as a future centre of Mixed Use development. This is already filtering through into the property market, with sites offering future development potential in constant demand by developers and land bankers.”
Layne Harwood (left) of Knight Frank, Warren Hutt of CBRE (middle) , Jonothan Ogg of CBRE (right).