Portfolio star looks like building to bank on
The modern three-level office building for sale at 51 Corinthian Drive, Albany.
A fully leased,three level building anchored by the Westpac bank in Albany on Auckland’s North Shore is a feature property in the latest 54 page Colliers Portfolio publication.
“Thirty two listings are in the latest portfolio covering all commercial sectors including industrial, office and retail properties,” says Peter Herdson, national director of capital markets for Colliers International.
“Entitled Shore to Shore this new portfolio reflects New Zealand’s growing reputation as a leading global investment destination for commercial property investors, along with our capacity to service that demand,” Herdson says.
Other feature listings in the portfolio include two large heritage buildings in Wellington’s downtown entertainment precinct and a Mt Maunganui holiday park.
“The Albany building leased to Westpac at 51 Corinthian Drive is perfect for investors looking for income security,” says Jason Seymour who, with colleagues Andrew Reed and Shoneet Chand, is marketing it for sale by deadline private treaty closing on July 23 unless it sells earlier by negotiation.
“The sale represents a rare chance to secure a prominent and modern commercial building as a premium investment property backed by strong tenants in the fast growing Albany precinct,” Seymour says.
Westpac occupies most of the building with three other tenants - Hands On Rehabilitation, Bachmann Orthodontists and Windsor Medical Centre – providing a significant and diversified income stream.
“With a large international financial institution providing 76 per cent of the property’s total current net income of around $1.1 million and solid covenants provided by three well-established health practitioners this is an excellent buying opportunity,” says Seymour.
The Westpac reception area in 51 Corinthian Drive.
The tenancies provide a weighted average lease (WALT) term of 5.5 years with rent review provisions in the leases giving potential for future income growth.
Reed says the building has a good profile from the northern motorway section of State Highway One to which it has easy access.
“It is an attractive building that is well known in the local area and provides great brand exposure for Westpac, which holds the naming rights. It is set to benefit from increasing property values in the area, which are being spurred on by occupier demand and continuing commercial development,” Reed says.
The 3424 sq m building contains three levels of commercial tenancies, with Westpac occupying the two upper levels and part of the ground floor, which is shared with the medical tenants. It has 42 secure basement car parks and 83 external on grade car parks, providing ample parking for the building’s staff, visitors and customers.
The building, occupying a 2907 sq mfreehold site, was constructed in 2008 and has a confirmed A-grade seismic rating at 102 per cent of new building standard (NBS).
“It was designed so the floor plates can be easily split into smaller tenancies in the future if required and can accommodate up to four tenants on each floor which gives a new owner flexible options,” Seymour says.
“With its modern construction, high quality executive fit out and attractive ground floor lobby, this property is of a very high standard and can be reconfigured to suit any future tenant.”
The building is on an elevated site close to nearby key amenities like Westfield Albany, Massey University, Albany Pak’nSave and North Harbour Stadium.
Chand says much of the undeveloped land surrounding the Westpac building and in the wider Albany City precinct is earmarked for significant future development, including over 12 ha of land owned by Goodman Property Group for its proposed Orchard Park commercial precinct.
“This isattracting well-known owner occupiers, developers and tenants, with large-scale construction expected to continue in the coming years including further residential developments to support the commercial growth,” Chand says.
Seymour says the Albany area has proven to be an excellent place to do business over recent years, with rapid development and low commercial vacancy rates reflecting the demand among occupiers for premises in the suburb.
“Colliers International’s latest research shows a low 2.9 per cent vacancy rate across office property in Albany, with A-grade properties commanding annual rents of between $240 and $285 per square metre per year.”
Several nationally known owners and developers have recognised the potential for further commercial development in the Albany basin based on expected future population growth, says Chand.
A view of the open plan office layout.
“Further development is underway on land north of the Westfield shopping centre, including a large new Countdown supermarket, alongside retirement, residential and retail projects.”
He also cites the recently completed Foundation retail centre which is home to several well-known national tenants.
“The wider Albany City development is a major project which has been designed as a dynamic and sustainable sub-regional centre to enhance the economic and social wellbeing of the area along with catering for future population growth,” Seymour says.
“The surrounding area is designed to include a variety of living, employment, commercial, retail, community, civic and recreation environments. Distinctive high quality urban design is provided for, including a ‘green network’ to create an attractive urban environment.”
Reed says it’s estimated that 15,000 people will be working in Albany City by 2021.
“Expected population growth rates in Albany are significantly ahead of projections for both the Auckland region and the North Shore, which is itself one of the region’s fastest growing areas,” he says.
“And the wider Albany Basin is expected to be the main recipient of the North Shore’s projected population increase over the next 40 years, creating significant future demand for commercial and retail developments in the Albany City area.
“Higher density housing is also planned for Albany City itself, with 4000 people likely to be resident in the city centre by 2021.”
Chand says quick motorway access, dedicated bus lanes and a large ‘park & ride’ bus terminal further enhances the area’s accessibility for commuters and shoppers.
Herdson says properties within the latest portfolio will be marketed to international investors as well as nationally.
“To mirror our increasing significance within this sector of overseas capital investment and markets, we recently changed the name of our most experienced team of brokers that manages many of these international transactions to the ‘capital markets team’ – a brand Colliers replicates in all its leading overseas locations.
“The Australian and New Zealand contingent of this global team frequently visits international markets, consolidating market trends and key partnerships.
“This ensures we apply local insights and expertise in 485 markets, with specific acumen in international dealings, providing us the ability to plan globally and act locally,” Herdson says.
From left to right: Jason Seymour, Peter Herdson, Andrew Reed, Shoneet Chand of Colliers International.