CBD tower could be hotel or apartments

10:01 AM Saturday October 25, 2014 Colin Taylor

Exterior vertical view of reflective blue glazed tower block at 396 Queen St in which 15 office floors are for sale.

JLL has been appointed by AQM Limited to sell 15 office levels in the distinctive 19 level reflective blue glazed tower building at 396 Queen St, Auckland.

The building is ideal for renovation into an upmarket hotel, apartments or an educational facility, says John Binning, JLL’s director of capital markets who is marketing it for sale by expressions of interest closing on Thursday November 27 unless it sells beforehand by negotiation.

“The external building form is elegant and distinctive and would respond well to a conversion,” Binning says. “It is ready for immediate conversion to a range of different uses which could include hotel, student accommodation, a hostel, apartment complex, retrofitted commercial office space or into a mixed use development.”

He says the building features unobstructed views over Albert Park and Myers Park and across the CBD towards the Waitemata Harbour.

“There are a number of large buildings in this part of town that have either undergone a conversion or are in the process. Sitting opposite this building at 369 Queen St is 345 Queen St which has been taken from offices into a fully-fledged school operated by Auckland Colleges Group (ACG). Another city office building at 132 Vincent St was converted from offices into a 62 luxury apartment complex.  Currently 401 Queen St is being converted from offices into a hotel and 15-20 Hopetoun St is undergoing redevelopment from offices to apartments.”  

Binning says Auckland hotels are running at historic high occupancy rates with limited stock available so the opportunity presented to convert the levels 5-19 of 396 Queen St into an accommodation facility is timely. 

“Located on the intersection of Queen Stand Mayoral Drive within Auckland’s main retail and commercial thoroughfare, 396 Queen Street is perfectly positioned in the heart of one of the busiest educational and residential precincts in New Zealand,” he says.  

“Queen St is Auckland’s central thoroughfare with its abundance of shops, restaurants, pubs and cafés. It also sits within the hub of the Auckland’s entertainment precinct being diagonally opposite Auckland’s Town Hall and Aotea Entertainment Centre.”

Binning says 396 Queen Street has many factors that make it well suited to conversion opportunity including a central core with good sized floor plates, four elevators, a Queen St entrance, reception lobby, back of house entry, drop-off zones, secure car parking and storage.

Completed in 1989, the modern office tower is on a freehold site of about 1470 sq m. The building can be accessed via all street frontages with the main guest or client entrance and reception lobby fronting Queen St; a secondary and vehicle entrance onto Mayoral Drive; and a third entrance, predominantly used for loading, car parking and back of house space, from Airedale St.

Binning says the property has some tenants on short term leases and could be purchased ‘as is’ with vacant possession as a potential hotel or residential development.

“A significant benefit is the possibility of taking the building height to another five levels which would drive the value of this investment even further for a purchaser. Levels 5-19 have a total gross floor area of about 8400 sq m and adding an extra five floors would increase the building area by around 2500 sq m.”

The building’s construction is of reinforced concrete foundations, columns, beams and floor slabs built around a central housing the key services. External walls predominantly comprise a glazed curtain wall that allows full floor to ceiling natural light to all the floors. The internal walls and ceilings are of plasterboard with acoustic ceiling tiles.

Two of four lifts have been recently modernised and the other two decommissioned. Concept plans for more floors provide for the replacement of the two decommissioned lifts that would provide an extend service to the added top floors.

The four lower levels of the building which are not included in the sale have recently undergone an extensive redesign and were extended along the Queen Street and Mayoral Drive frontages, creating 24 retail units. The building is fully equipped with fire sprinklers and has a seismic assessment of over 100 per cent of New Building Standard (NBS).

The site is zoned Strategic Management Area 1 under the Auckland City District Plan Central Area Section Operative 2005. The aim of this zone is to maintain the highest intensity of activity in the central Auckland area.

Binning says the property is closeto two of New Zealand’s largest tertiary facilities, the University of Auckland and Auckland University of Technology (AUT) which together have a roll of close to 60,000 students many of which require centrally located accommodation during the calendar year from February to December.

“There is a huge drive for residential development in the CBD and this increases in the upper Queen St area past Aotea Square towards Karangahape Rd and also up from Queen St towards the Symonds St ridge.

“This tower block at 396 Queen Street is in the nexus of this trend and it makes for one of the best accommodation conversion opportunities in the market.

“There is a distinct urban evolution occurring in central Auckland with the commercial centre of gravity moving towards the water. However, the top end of town is experiencing an increase in residential development and a growing influence from the education and hotel sector towards Ponsonby and K’ Road.”

True Commercial - John Binning, JLL Oct 2014.jpg

John Binning, JLL’s director of capital markets; ‘It makes for one of the best accommodation conversion opportunities in the market.