Grafton building offers healthy cash flow
The property is on high profile corner at 126 Khyber Pass Rd.
A fully leased city fringe building occupied by Auckland District Health Board (ADHB) as one of several longstanding tenants on a high profile Khyber Pass Rd corner site is for sale offering a new owner annual rental cash flow of about $676,000.
Originally developed for Westpac Bank and Ogilvy & Mather Advertising in the mid 1980s, the four-level, 2287 sq m building at 126 Khyber Pass Road, Grafton, is up for tender, closing April 16, unless sold prior, through Kate Kirby and Cameron Melhuish of Bayleys Auckland office. It is one of the larger properties contained in Bayleys’ latest commercial and industrial Total Property portfolio.
“The building, which has an A-grade seismic assessment, has been meticulously refurbished over recent years and offers attractively presented high stud office and showroom space,” says Kirby. “It is on a substantial 1467 sq m site and has huge corner profile on one of the city fringe’s busiest intersections at which Khyber Pass, Grafton Road and Nugent Street converge,” says Kirby. “The building’s standalone corner position on an elevated site means that all the tenancies receive excellent natural light and have pleasant outlooks.”
Kirby says the building’s large floor areas have been subdivided to provide for multiple tenancies most of which have leases with built in capital growth through fixed rental increases. The property is currently producing total net annual income of $676,806.
The building’s two largest tenants the ADHB and information technology company Velocity Global Limited have been in occupation since 2003 and 2004 respectively. The ADHB occupies 470 sq m of space on Level 3 of the building and last year renewed its lease for three years, with one further three-year right of renewal.
Velocity Global occupies 545 sq m of space on Level 4 with its current lease running until October 2018, with one further six-year right of renewal. Velocity Global is a member of US based Velocity Group Inc which provides accounting, business and management software installation and support services for customers throughout Australasia, Asia (including mainland China), Mexico and North America.
Velocity Global shares the top level of the building with creative advertising, media and marketing agency Media One Brand FX which occupies 170 sq m. Both tenants have access to a large 389 sq m wrap around balcony which provides sweeping central city and harbour views.
The ground floor tenancies have exposed concrete beams and building services and polished concrete floors. Another long standing tenant, the FM Cafe, has a current lease until August 2019 over 350 sq m on this floor and an outdoor courtyard and seating area, with one further six-year right of renewal. It has been in occupation since 2006.
The popular FM Cafe is located within the building.
The other ground floor tenant is Mike Greer Homes which occupies 311 sq m of showroom and office space on a six year lease from August 2013 plus two six-year rights of renewal. Kirby says one of the attractions for this tenant was the high exposure signage profile provided by the building’s corner position.
The building also has 63 carparks located in the basement and on the ground floor and which are accessible from Khyber Pass and Grafton Road plus Arawa St which is a side road off Khyber Pass.
Melhuish says the property is strategically located in a proven commercial location close to the CBD, Newmarket and Mt Eden, with the Grafton Gully Motorway interchange, train station, Auckland Hospital and a Bodytech Gym all nearby.
The gym is part of Neil Holdings’ 8 Nugent development encompassing a mix of office, showroom, convenience retail, leisure and residential accommodation which is expected to result in approximately 1,200 people working and living onsite when the project is completed.
“Over the last decade, Grafton has been going through considerable rejuvenation with new commercial development and the refurbishment of existing buildings as well as a significant increase in the number of residential and mixed use developments,” says Melhuish, “Auckland University’s massive 10-year redevelopment of the 5.2 hectare former Lion Breweries’ site on Khyber Pass Road will further enhance the area and is likely to result in more residential and student accommodation development.
“A favourable Mixed Use zoning, which will continue under the proposed Auckland Unitary Plan, means that 126 Khyber Pass could have future redevelopment possibilities further down the track.”
Cameron Melhuish of Bayleys Auckland (left), & Kate Kirby of Bayleys Auckland (right).