Property opposite Sky City a good bet
The site for sale is occupied by a 1970s data centre.
An Auckland city property with development potential for an office building, hotel or residential accommodation, is for sale directly opposite the planned Sky City Convention Centre.
“This freehold property at 55-59 Nelson Street ticks all the boxes,” says Nick Hargreaves, JLL’s managing director, who with Ian Hall, the agency’s commercial sales and investment specialist, is offering the site for sale via a six week expressions of interest campaign closing on July 29.
A prominent 1970s data centre currently occupies the large 2125 sq m site on the western fringe of Auckland’s CBD but it is being sold with vacant possession.
The building has a total net lettable area of 4987 sq m over five levels, three of which are below ground.
Above ground Level One and the ground floor comprise open plan office space. Basement Level One contains a mixture of spaces including commons areas, plant rooms, office suites and test centres. Basement Level Two houses computer rooms and high performance computer rooms and Basement Level Three houses the water tanks, additional plant and machinery, and storage.
The property comes with 21 car parking spaces located in a security gated area to the rear of the building on the ground floor.
“It’s rare for this type of property to come to market and we expect it will generate a significant level of interest from investors and developers,” says Hargreaves.
“Auckland’s rapid population growth is driving the increased needs for business space and residential accommodation - commodities which are in short supply. The sale of this property presents a chance to secure a substantial development site and capitalise on strengthening market fundamentals in Auckland city,” says Hargreaves.
He says a number of investors are attracted to purchasing buildings that are vacant and taking on the leasing up or development risk in order to add value due to the lack of quality investments available in the market, and the low yields being demanded for fully occupied investment properties.
“The value of the site will be significantly enhanced by the planned Sky City Convention Centre located opposite the property which will further promote the area as a commercial and entertainment precinct within Auckland.
“Indications are the new convention centre will cater for 3500 international conference delegates at any one time and attract 33,000 more delegates to Auckland each year.”
Hall says if additional levels were constructed on the site excellent views would be achieved over The Viaduct and Waitamata Harbour, in addition to far reaching views that can already be seen to the west across Victoria Park.
He says the region surrounding 55-59 Nelson Street is fast becoming a core location of its own right within the Auckland office market.
“The area, known as the Victoria Quarter, is popular with those occupiers requiring larger floor plates in low to mid rise buildings.”
Occupiers currently surrounding the site include Spark (formerly Telecom), NZME., Courier Post, Oracle and Kiwi Bank.
Further development at 151 Victoria Street West is due to add 20,000 sq m of highly sustainable office and retail accommodation to the Victoria Quarter by 2016.
“Slightly further afield, in the Wynyard Quarter, Fonterra’s new 16,000 sq m headquarters is under development within a projected 50,000sqm office and retail precinct fronting Fanshawe Street,” Hall says.
He says infrastructure improvements like the new city rail link are also expected to significantly improve “connectivity” within the CBD and boost the appeal and profile of the site.
According to JLL’s latest city investment intensity index, which compares the volume of direct real estate investment over a three year period relative to the current economic size of a city, Auckland ranked seventh in the world in the first quarter of this year climbing six places as investment volumes doubled over the past year.
“This indicates that Auckland remains a strong favourite with domestic and international investors,” Hargreaves says.
Nick Hargreaves (left) and Ian Hall (right) of JLL.