‘Cash flow workhorses’ in Penrose
Street level view of the two adjoining Penrose offices for sale.
Two adjoining corner office buildings with a past performance as ‘cash flow workhorses’ are for sale in the centre of the Penrose commercial district and are likely to attract both investors and owner occupiers.
“These buildings with three tenants in occupation have provided a very good return for the current owner” says Jonathan Ogg of CBRE who, with colleague David Arlidge, is marketing 12-14 Walls Rd and 42 Olive Rd, for sale by deadline private treaty closing on May 21, unless they are sold beforehand by negotiation.
“For buyers looking for accessibly-priced assets to add to their portfolios at a time of increasing demand for commercial property in central Auckland, these buildings offer compelling investment fundamentals,” Ogg says.
“They would also suit an owner occupier requiring a centrally-located office base in Penrose, with the benefit of collecting income from the existing tenants. A further draw card will be the strata titles of the individual buildings providing the flexibility of an opportunity to sell one of the buildings in the future,” he says.
“Additionally the large 4150 sq m freehold site sits on a prominent corner giving excellent signage exposure to both Walls Rd and Olive Rd.”
Arlidge says the two buildings with an A-plus seismic rating were constructed in 1986 and offer functional and flexible office space.
The two level building at 42 Olive Rd encompasses 1089 sq m of net lettable space, while 12-14 Walls Rd next door comprises 1664 sq m of space across three levels. “Both have great onsite parking with a total of 86 vehicle parks - 75 off-street bays and 11 covered spaces.”
The three tenants at 12-14 Walls Rd are the Ministry of Maori Development (Te Puni Kokiri); vehicle finance and sales specialist Aqua Cars Ltd; and technology firm Blackhawk Tracking Systems Ltd.
“The current net passing annual income is $226,770 with the potential to increase the property’s income stream through leasing vacant areas of the buildings,” Arlidge says. “The building at 42 Olive Road is vacant but is complete and ready for new tenants to move in at an economic occupancy cost with existing fit out, workstations and furniture.
“With a lease in place to the Crown and two other strong tenants with the potential to increase and enhance the occupier mix, this property offers a compelling proposition for investors to add value.”
Arlidge says a savvy investor could also get a very favorable “yield gap” on this property. “The difference between a potential yield return and the borrowing rate from a bank could be quite significant.”
Ogg says the buildings have good access to the local arterial routes of Station Road and Great South Road with intersections just 200 metres away.
“Access to the greater Auckland roading network is extremely good with the Ellerslie-Panmure and southeastern highway links also close to the site.”
Arlidge says staff benefit from being close to the Penrose train station and only a 10 minutes’ drive from the Auckland CBD during off-peak hours.
“This is functional office space in a location offering a strong alternative to the CBD with other surrounding office-based businesses and characterised by considerably cheaper rental rates than the central city.
“Many businesses can benefit from a suburban location, especially service-oriented companies which can realise efficiency gains from being positioned close to their customers in business parks and industrial areas,” Arlidge says.
Ogg says an advantage of a Penrose location is that it’s roughly mid-way between Auckland CBD and Auckland Airport.
The location has been further enhanced in recent years by improved amenities the Sylvia Park shopping centre, local cafes and improved public transport.
David Arlidge (left), & Jonathan Ogg (right) of CBRE