Plenty of prospects for Parnell property
The commercial building for sale at 17 Falcon St, Parnell.
An attractive commercial building on a Mixed Use zoned site in Parnell is for sale offering its next owner an immediate add value opportunity and the possibility of residential redevelopment longer term.
The 616 sq m building on a 280 sq m freehold site at 17 Falcon Street is featured in Bayleys’ latest Total Property portfolio and is being marketed by Cameron Melhuish, Mike Houlker and Sunil Bhana of Bayleys Auckland who are selling it by tender closing on October 29 unless the property sells earlier by private treaty.
The building has three levels of office space and two levels of underground parking and currently producing $138,164 in net annual rental income.
Bhana says there is potential to increase the income by leasing up the 138 sq m of ground floor space. He says this could also provide an owner occupier with an opportunity to move into this space and use the rent from the other two floors to help pay a mortgage.
Originally constructed in the 1980s, the building was significantly renovated both internally and externally in 2004.
“It’s a very well presented building that has been meticulously refurbished to a high professional standard and provides modern, air conditioned office space with an excellent parking ratio for 20 cars,” says Bhana. “It has been solidly constructed, with an A-grade seismic rating. Dual street frontages and an elevated location mean it receives loads of natural light and also has pleasant outlooks over the Auckland Domain towards the CBD.
“Significant glazing, particularly on the southern side of the building, gives it an attractive appearance and enhances the outlook for occupants. The floors are largely column free providing layout flexibility. It is current mainly partitioned office accommodation but could have more of an open plan configuration. The central lift and stairwell provide additional flexibility to split the top two floors, each measuring 239 sq m, into smaller tenancies if required at some stage in the future.”
Level One is occupied by Southern Crossings which specialises in arranging luxury vacations in New Zealand, Australia and the South Pacific. It has been recognised twice in the past four years as one of the Top 5 inbound travel companies in the world by the prestigious Virtuoso network.
Founded in 1986, Southern Crossing has been in occupation at 17 Falcon Street since 2005. The current three-year lease runs until mid 2017 with two further three-year rights of renewal and has fixed annual rent increases based on the increase in the Consumer Price Index plus one per cent.
Occupying Level 2 is International Cargo Systems, a New Zealand owned and operated sea and air freight forwarding company that was founded in 2003. It has a three year lease from October 2013 with one right of renewal.
Aerial view depicting the cityscape setting of 17 Falcon St, Parnell - identified by red circle.
Melhuish says the building’s attractive outlooks and excellent natural light also creates the possibility of converting part or all of the building into upmarket central Parnell apartments. He says the property’s flexible Mixed Use zoning, which will continue under the Proposed Auckland Unitary Plan (PAUP) allows for a wide range of commercial and residential uses. The height allowance for the area also increases from 15 metres to 16.5 metres under the PAUP.
“Longer term, this building appeals as a prime candidate for residential conversion, and while further engineering investigation would need to be done, there is also the prospect of adding to the floor area.
“A number of former office buildings have been converted to residential apartments in the surrounding area and have met with strong take up from the market because of the popularity of Parnell and its closeness to the Auckland CBD, Britomart, the ferry terminal and all the major motorway networks.”
Melhuish says the building is a short walk away from the Parnell train station, the first stage of which is underway, and is one block back from Parnell Road’s busy commercial precinct, well known for its cafes, bars and restaurants and diverse, boutique retailing.
Auckland Transport approved the $7.5 million first stage of the train station, off Cheshire St, in February with the redesign, refurbishment and relocation of the former Newmarket station building to the site scheduled for completion by late 2015. The opening of the new two-platform station is aligned to the closure of Sarawia St level crossing, near Newmarket, due by June 2017 subject to planning processes.
A station at Parnell is forecast to be used by up to 2000 passengers during the morning peak with many of them heading to the nearby universities. It will also be used by people attending events in the Domain and at the ASB Tennis Stadium and buy the Parnell community.
“The Falcon Street property is strategically positioned between the station and Parnell Road,” says Melhuish. “Given the many angles and options it offers, this property is likely to attract add value investors, developers and owner occupiers.”
Sunil Bhana, Bayleys Auckland.
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