Chancery floor an ideal passive investment
The building at 50 Kitchener St, Auckland CBD, in which the fifth level is for sale.
The fifth level of a premier office and retail building in Auckland’s popular Chancery commercial centre is for sale with one well established IT-related tenant on a new lease signed in February this year.
“This is a modern and low maintenance unit, with a secure cash flow from a multinational tenant, making it an ideal passive investment property,” says Reese Barragar of Barfoot & Thompson Commercial who, with colleague Andrew Clark, is marketing the 584.44sq m floor at 50 Kitchener St for sale by deadline private treaty closing at 4pm on Thursday September 15, unless it sells earlier by negotiation.
“The freehold fully leased floor is a top shelf investment earning $192,865 plus GST net per annum with built in rental growth and a strong tenant covenant,” Barragar says. “The initial four year lease has a further four-year right of renewal with a final expiry date of January 31, 2024 - along with a three month bank guarantee and 3 per cent annual increases from February 1, 2018.
“It is located within a prominent Auckland CBD building that sits on the corner of Bacons Lane and Kitchener St with views to Albert Park.
“Level 5 has been fully refurbished to a high standard and is leased to Certus Consultancy Services - one of the leading IBM systems integrators in Australasia.”
Barragar says the tenant pays 100 per cent of all outgoings, estimated at $55,521.80 plus GST per annum or $95 per sq m.
Clark says The Chancery development, in which the building is dominant, comprises a mixed retail and commercial centre on the edge of the High Street fashion district and is bounded by Bacons Lane, Chancery St, Courthouse Lane and Kitchener St.
“The Chancery is on the eastern side of the CBD and has good regional and local connections to major arterial thoroughfares, to the motorway network, to Albert Park across the road and to the University of Auckland immediately above via the park. The centre contains a pedestrian street, like Vulcan Lane, where the pace of movement is walking speed and foot traffic dominates. The Chancery creates an alternative way for pedestrians to move between High Street and Albert Park and the university - avoiding traffic, which improves the connectivity of the CBD area.”
Clark says entries into The Chancery are defined by secure gates and by striking architectural elements largely based on the nearby historic Chancery Chambers building on the corner of Chancery and O'Connell Streets, which was built in 1924. “The domes and turrets are recognised as symbols of The Chancery and provide a strong link to the adjoining historic building.”
An office area within 50 Kitchener St.
He says “the axis of the Chancery path” is orientated towards Freyberg Place and Albert Park. “The openness of Freyberg Place and the height of the surrounding buildings, in particular Chancery Chambers and the Pioneer Woman's Memorial Hall, determined the scale of the new Chancery buildings. Low-rise, medium-density buildings establish a connection with the historic buildings of the area, and the mix of activities complements others in the vicinity.”
Clark says the building is within Queen Street Valley precinct which has a 50 metre height limit.
“The property is within Strategic Management Area 1 which covers the centre of the urban area of Auckland. It contains the country's largest concentration of high rise buildings and is deemed a prime location, with the focus of planning being to sustain the area as a main commercial, administrative and entertainment centre. Permitted activities include offices and retailing, accommodation, food and beverage uses, education and entertainment.”
Barragar says that under the Proposed Auckland Unitary Plan the Queen Street Valley precinct is centred on Queen Street and includes the areas surrounding High St, Lorne St, O'Connell St, and Fort St.
“Under the proposed plan the precinct is located within the core central business district and is designed to accommodate a wide range of retail and commercial activities with a strong pedestrian focus that provides important connections from the city centre to the harbour's edge.”
Reese Barragar (left) and Andrew Clark (right), Barfoot & Thompson Commercial.