Orakei offers superb prospect
The busy building serves tenants well.
It's rare for sites in this upper-level area to be auctioned
A three-level mixed use Orakei commercial building fully leased to 10 tenants on a large site with future development potential is for sale for the first time in nearly three decades.
Located on a 1108sq m landholding at 78 Coates Ave, the 589sq m building will go under the hammer on July 30 at Bayleys unless sold beforehand. The property, being marketed by Bayleys Auckland's Robert Platt and Kate Kirby, is producing net annual rental income of $146,232 plus GST from a mix of retail and office tenancies.
"This is a rare opportunity to purchase a very well presented investment property in a high-profile position on the northern side of Coates Avenue," says Platt.
"Commercial buildings are tightly held in the Orakei precinct as evidenced by the fact that the vendor has owned this property for close to 30 years.
"The offering also provides potential for future development of the unused land at the rear of the property which has panoramic views towards the harbour and Rangitoto Island because of its elevated position."
Dating back to the 1950s, the concrete building has four retail shops at ground level occupied by Orakei Bakery, Coates Avenue Butchery, Gather Espresso Cafe and a Ray White real estate office with public car parking directly in front of these premises.
At the lower ground level there are a further three commercial tenants: an art gallery, jeweller and beauty business.
The top level has two tenants: Vital Solutions Chiropractor and Pure Healthcare. Further income is generated from seven garages at the rear of the property on month-to-month leases and from a Vodafone telecommunication tower.
Kirby says some tenants have exercised rights of renewal on their leases which indicates the building and the location is working for them. "The property is situated within a well patronised local shopping precinct that includes a mix of cafes, restaurants, hair salons, a NZ Post outlet and convenience stores. The surrounding area is generally residential housing, with Orakei being one of Auckland's most affluent suburbs."
Platt says recent retrofit work undertaken on the building means it has a very good seismic rating for a structure of its age. A detailed seismic assessment found that the main lateral structural system of the building performed up to 70 per cent of the new building standard.
The property has a capital valuation for rating purposes of $ 2.1 million with a land value of $1.4 million. The rectangular site has access from Paora St as well as Coates Ave which connects with Kepa Rd - a main arterial route to the eastern suburbs.
The site is zoned Business 1 which allows site coverage of 1sq m of building to 1sq m of land up to a maximum height of 10m. Platt says this means another 518sq m could be constructed as of right.
The property is zoned Neighbourhood Centre under the proposed Auckland Unitary Plan which would provide opportunities for more intensive development and a wider mix of uses, including residential, says Platt. This zoning permits buildings up to 13.5m.
"As it is at the moment, the property represents a superb investment opportunity, but there is also the bonus of being able to add further value to the site in the longer term."