Grand views over New Plymouth
Scaffolding has been put up around the building during a current re-paint.
One of New Plymouth's largest CBD land holdings and office complexes, the Shell Todd building, is up for sale offering an annual rental income return of $907,055 from its long standing lease to the energy consortium.
The 5222sq m two-building premises on a 3069sq m site at 167 Devon Street West is being marketed by Bayleys Real Estate on behalf of its current Singaporean based owners Tolaga Investments Ltd, which has owned the property since 2001.
Bayleys’ international director Chris Bayley is marketing the property in conjunction with Tony Chaudhary, Bayleys South Auckland and Alan Johnston, of Bayleys’ New Plymouth office, with tenders closing on May 12.
Chris Bayley says the offering will appeal to purchasers looking for a well located investment property with a strong tenant covenant offering a higher yield than a similar type of property in Auckland.
“This is a landmark New Plymouth building with an excellent cash flow provided by one of New Zealand’s most successful energy exploration businesses which has occupied the property for over 40 years. It’s also well positioned on a large freehold corner site in the city’s central business district which provides additional options longer term.”
The property originally consisted of a 2178 sq m three-level office building which was purpose built in the mid-1970s for what was then Shell BP Todd. An interlinking eight-storey 3044sq m office tower was added in 1983 to cater for the company’s expansion at which stage a 30-year lease term was entered into, with the right to renew it for a further 10 years.
Shell Todd Oil Services Limited (STOS) now has a 10-year lease until July 2023, with two further five-year rights of renewal. The lease has three-yearly rent reviews with the next review falling in July this year.
Upper floors offer fabulous west coast views, suggesting to some that the site could suit a future hotel.
The company is jointly owned by Shell Petroleum Mining and Todd Petroleum Mining which both have a 50 per cent stake holding. It undertakes petroleum exploration, appraisal, development and production activities and has been involved in natural gas exploration off the coast of Taranaki since the 1950s.
The company produces 85 per cent of the nation’s gas. It operates a number of gas fields, including Maui and Kapuni, as well as production stations and a tank farm.
“Shell Todd is a big contributor to the Taranaki economy with many of its 300 staff based here and it also provides employment for a wide range of contractors,” says Johnston. “It has made a long-term commitment to the area and this property, and the projections are that its various fields will continue to produce for at least the next 15 to 20 years.”
The older of the two buildings has a high profile corner frontage to both Devon Street West and Dawson Street. Chaudhary says the rectangular concrete building has been extensively refurbished by the tenant to create predominantly open plan offices with meeting room areas.
“The company has had a continuous renovation programme in place which means the internal areas have been upgraded to a modern standard and are well presented. The refurbishment has also included a significant investment in upgrading the air-conditioning system.”
Chaudhary says the adjoining office tower was built in a similar style and has been renovated and upgraded, a complete repaint of the exterior having just been completed.
The main entrance to the property and the reception area is located in this building on the ground floor which also has a sizeable staff cafeteria. The levels above provide office and meeting rooms and the top penthouse level has a high stud and has been fitted out to a high standard with a tongue and groove timber ceiling.
These upper floors have sweeping 360 degree vistas, encompassing sea views to the north and mountain and rural views to the south.
Johnston says the size of the site and its inner city corner location, coupled with its favourable zoning, means the property has longer term development potential. It has a Business B Environment Area zoning under the New Plymouth District Council’s Operative District Plan.
“This is a flexible zoning that permits a wide range of commercial and business uses as well as some residential. Given the wide ranging, unobstructed views the main building’s higher floors provide, it could eventually lend itself to a hotel or residential conversion.