Income and chance to add value in Addington (1)
The two adjoining office buildings for sale at 39 and 45 Princess St, Addington
Two adjoining Christchurch office buildings generating income and with the potential to add significant value are for sale in an area where high demand has resulted in tight space availability.
“This Addington sale is a big plus for buyers looking to get into the Christchurch property market now,” says Jonathan Lyttle, managing director of Savills’ newly-established Christchurch office who is marketing 39 and 45 Princess St for sale separately by deadline private treaty closing on July 15.
Lyttle says the buildings are a good proposition for investors in a desirable and high amenity area.. “Local amenities including shopping, cafes and Hagley Park have helped this area to become a proven business location and a real alternative to the central business district,” he says.
“There is real pressure on existing office space under $275 per square metre in Addington. Christchurch’s new CBD is unable to provide economical quality office accommodation and high grade, cheap suburban offerings will be keenly sought by tenants forced to find affordable space in the coming years.
“With office investments in Addington offering significant cost benefits compared with the CBD, these properties represent excellent value for purchasers.”
Both properties are occupied and will provide good income streams while the new owners make plans for any future redevelopment or re-leasing.
The Ministry of Education leases 39 Princess St which will earn annual net holding income of over $1.1 million until the ministry’s scheduled move-out in 2017.
“The building offers a flexible layout that could easily be divided into multiple smaller tenancies,” Lyttle says.
“It offers an excellent opportunity for reconfiguration into up to eight separate tenancies which could be re-leased to smaller businesses. The mezzanine level could also be extended to provide additional floor area. This is a very attractive add-value proposition given the potentially lower rents and demand for cheap office space in this location.”
The 3664sq m building contains well-presented and modern office accommodation and staff amenities across two levels on a 3579sq m site with 92 car parks. The building was constructed in the 1960s and refurbished in 2006.
Lyttle says the property at 45 Princess St has three tenants in place with rights of renewal, making it an ideal split-risk investment.
“Whitebait TV, global recruitment firm Hudson Global and the Green Room Cafe are all well-established at this property and have rights of renewal built in to their leases which return a strong and diversified income stream of over $670,000.”
Two adjoining two-level buildings contain 2811sq m of attractive, modern business premises on a 5434sq m site with 45 car parks.
Whitebait TV invested in a significant upgrade and renovation to the property in 2009 and occupies the larger building housing its studios and offices.
The smaller building was constructed in 2008 and is occupied by Whitebait and Hudson, along with the ground floor cafe.
Lyttle says there is also the potential to extend the buildings on to undeveloped land on site in the future to provide additional office space and/or car parking.
The properties are situated within the Workstation55 business park, with excellent access to arterial routes. Neighbouring occupiers include Hewlett-Packard, EQC and Kindercare.