Modern city fringe building with conversion potential
This modern commercial property is for sale in Eden Terrace, in the Auckland city fringe.
A fully leased, modern Auckland city fringe commercial building earning net annual rental income of about $630,000 from two tenancies and located on a large Mixed Use zoned corner site in Eden Terrace is up for sale for the first time since it was built 17 years ago.
The four level building with a net lettable area of 2651 sq m and 52 on-site car parks on a 1541 sq m freehold site at 26-32 Virginia Ave East, is featured in Bayleys’ latest Greater Auckland portfolio and is being marketed by Alan Haydock of Bayleys Auckland for sale by tender closing on July 2 unless it sells earlier by private treaty.
“Modern investment properties of this calibre seldom become available in the city fringe, Haydock says. “It offers a new owner the opportunity to secure a substantial cash flow from corporate tenants, or explore redevelopment or residential conversion options under the current sought-after Mixed Use zoning or a favourable zoning under the Proposed Auckland Unitary Plan [PAUP].”
Haydock says the two large office floors of 961 sq m each on the upper levels benefit from excellent natural light resulting from the building’s north facing corner position and have sweeping views over Kingsland out to the Waitakeres and back to the CBD
“These levels have been refurbished to provide impressive modern office accommodation that is air conditioned. Amenities on each level include separate men’s and women’s toilets plus covered balconies and the top level also has a lunchroom.”
The ground floor provides 729 sq m of warehousing, with a stud height of about five metres and vehicle access through a covered loading area fronting Minnie St.. There are also 10 undercover car parks at the front of the warehouse and a further 42 secure car parks are located in the basement.
Interior view of 26-32 Virginia Ave, Eden Terrace.
The building’s anchor tenant is multinational facilities management and services company OCS Ltd which occupies the ground and top floors and has naming rights over the building. It has a six year lease from December 2010 with two three-year rights of renewal.
Founded in 1900, originally as a window cleaning company, and with operations in over 50 countries, OCS entered the New Zealand market in 2004 through its acquisition of Quality Services Enterprises Ltd and is now one of New Zealand’s largest cleaning and facilities services organisations. Other services it provides include building and grounds management, waste management, pest control, security services, labour management and catering.
The building’s other tenant MediaWorks, owners of TV3 and a national network of radio stations, is occupying the middle floor of the building while its premises undergo refurbishment. It has a one year lease expiring in December this year with one six month right of renewal. Haydock says this also opens up an opportunity for an owner occupier to move in who could use the substantial income from the rest of the property to help pay the mortgage.
He says the property is in a prominent position, with good exposure to Dominion Rd, in a sought-after city fringe location on the border of the CBD with motorways and public transport nearby.
“The Mixed Use zoning presents added value opportunities for a potential full or part residential conversion in the future,” Haydock says. “This is even more likely under a Business Mixed Use zoning proposed under the PAUP which has an increased maximum height allowance of 16.5 metres..
“The surrounding area reflects the Mixed Use zoning and encompasses low to medium rise commercial office and apartment buildings. In recent years, it has become a popular location for numerous apartment developments with further complexes under construction.”
Haydock says the proposed Auckland City Rail Link (CRL) is also set to provide future benefits for the location.. “It will extend from the Downtown area in the CBD to the western line at Eden Terrace. Plans for a Newton station have been abandoned in favour of redeveloping the existing Mt Eden Station, which is within an easy walk of 26-32 Virginia Ave East.
“Relative closeness to the Auckland CBD, Ponsonby and other city fringe suburbs, along with its excellent major transport links and the intensification of an already flexible zoning, is likely to see this location continue to grow both commercially and residentially.”
Alan Haydock of Bayleys.
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