Christchurch CBD building ticks the boxes

10:30 AM Thursday October 1, 2015 Colin Taylor

This Christchurch City modern retail and office building is for sale at 323 Madras St.

A nearly new two-level retail and office building constructed two years ago in the Christchurch CBD on the corner of Madras and Peterborough Streets, is for sale as an ideal split-risk multi-tenanted investment property.

The well-known Mainland Design Centre trade occupies an outlet on the ground floor of 323 Madras St while Calibre Consulting leases upstairs office space.

Jonathan Lyttle, managing director of Savills Christchurch, says the property occupies a high profile site on a main thoroughfare.

“This spot on a busy central city corner is hard to beat as an investment location,” Lyttle says.  “Add in the quality, modern building and two established tenants, and it presents a very attractive set of investment fundamentals.”

The 1407 sq m building occupies a 1841 sq m site across two titles and has off-street car parking. Mainland Design Centre operates its textiles showroom from the property, following its relocation from Welles St just south of the CBD.

Calibre Consulting is an engineering, planning and surveying firm formed following the rebranding of Brown Consulting and Spiire New Zealand in November 2014. The firm, which relocated to the property from Hornby, was closely involved in the building’s construction.

The building was developed by the Auckland-based Kew group. Its other Christchurch projects include the Vodafone and Kathmandu buildings in the innovation precinct; Downer NZ’s premises on McLeans Island Rd and industrial premises in Hornby.

Lyttle says the building’s design and profile make it an excellent prospective addition to an investment portfolio.

“Its attractive and modern appearance, along with its well-known tenants, give it real trophy value for potential buyers.”

The split-risk characteristics of the asset are a further drawcard, he says. “Multi-tenanted investments like this are always popular, as owners still receive an income stream in the event of a vacancy arising. The leases at this property both have good remaining terms so it really ticks a lot of boxes in terms of investment fundamentals.”

Regular rental increases are also built into both leases providing guaranteed income growth for the owner.

Lyttle says the property’s sale comes at a time when good quality property investments in Christchurch are in high demand and difficult to come by.

“Since the earthquakes, new investment assets in good locations have been taken up quickly as they hit the market. Investors have recognised that in a low interest rate environment, commercial property offers a much better return than cash sitting in the bank. Even though prime commercial property yields have been trending downwards, this asset class still offers a very significant return margin over bank deposits.”