Queen St Landmark’s trophy shops
Historic art deco Landmark House at 187-189 Queen St has three “trophy” retail properties up for auction next month.
Three Queen Street central city retail properties on the ground floor of Auckland’s historic Landmark House are among over 30 commercial and industrial properties which will be auctioned early next month as part of Bayleys' latest Greater Auckland portfolio.
Located at 187–189 Queen Street, on the corner with Durham Street West, the offerings encompass two retail units of over 170 sq m and a smaller outlet of 56 sq m which will be auctioned individually on Wednesday March 4.They are being marketed by Alan Haydock, James Chan and Damien Bullick of Bayleys Auckland office.
“These are ‘trophy’ retail investment properties which comprise the street level floor of one of central Auckland’s most distinctive art deco character buildings,” says Haydock. “They are also situated in a highly sought after Queen Street location where retailers benefit from excellent exposure to some of the highest pedestrian counts in the CBD.
“Not surprisingly, Queen Street shops of this calibre are tightly held by both owners and tenants, with the three main ground floor occupants in this building having been there for between 12 and 19 years.”
The largest property for sale, designated Unit B, totals 176 sq m and generates combined net annual rental income of $438,759 from two occupants: the multi national eyewear company Optical Prescription Spectacle Makers (OPSM) and NZ Muscle Ltd.
This retail unit within Landmark House at 187-189 Queen St Landmark House is occupied by longstanding tenant Lush.
“A feature of this unit is its huge pedestrian exposure with substantial frontages to both busy Queen Street and Durham Street West,” Chan says. “Anchor tenant OPSM has been there since 1996 which is a reflection of the strength of its corner location.”
OPSM opened its first store in Macquarie St, Sydney, in 1932 and is now part of the multi national retail group Luxottica, which has around 7000 stores worldwide - including the OPSM chain of more than 400 stores across Australasia. The current nine year lease to Luxottica Retail New Zealand Ltd runs from January 2008 and is producing net annual income of $333,759 with two yearly rent reviews to the Consumer Price Index (CPI) plus 2 per cent.
The other occupant of Unit A is NZ Muscle Ltd, which leases 32.5 sq m of the unit with its frontage onto Queen Street. Founded in 2006, the New Zealand owned and operated business retails sports nutrition and body building supplements. It has recently extended its lease for another six years from January 2015 at an initial rent of $105,000 with the same rent review structure as for OPSM.
Also located in a prime position on Queen Street is the 56 sq m Unit C which is being auctioned separately. It produces net annual rental income of $160,000 from Lush, another longstanding tenant, which has been there since 2000. Lush recently extended its lease for a further six years from November 2014 with two yearly rent reviews to the CPI plus 1.5 per cent. Lush specialises in handmade cosmetics and has 6000 employees worldwide employed in over 800 stores, including nine in New Zealand, and in several factories in 46 countries.
The third property for auction, Unit A encompasses a 171 sq m tenancy occupied by Chinese restaurant BBQ King which has extensive frontage to Durham Street West. BBQ King has been in its premises since 2002 and is just four years into its current 12 year term which is currently producing a net annual rental income of $85,379.
Chan says it is a popular restaurant that benefits from a high level of patronage from Asian students as well as from the big office workforce in the city and an ever growing inner city residential population. “Estimates suggest the CBD's current population of just over 26,000 could almost double to over 47,000 people by 2031,” he says.
Bullick says Landmark House is in a strategic CBD corner location with the Property Institute of New Zealand’s most recent Pedestrian Count Survey showing it to be near the fourth highest pedestrian count position at 197 Queen Street in relation to 38 street sites that were surveyed.
One of the retail outlets in Landmark House at 187-189 Queen St is leased by both OPSM and NZ Muscle Ltd.
“Queen Street retail is going from strength to strength with the entry of international luxury tenants including Louis Vuitton, Gucci, Dior, Prada and fashion retailer Top Shop which is opening just a few doors down in March,” says Bullick.
Haydock says the nine-level Landmark House is one of Queen Street's standout older buildings. It was significantly refurbished and seismically strengthened in 2000 along with the upper floors being renovated in 2004 to create boutique character office space. The building was also strata titled at this time.
Landmark House was originally built as the headquarters of the Auckland Electricity Power Board (AEPB) between 1928 and 1930 and was described as a 'miniature skyscraper', being one of the tallest structures in Auckland at the time. It was the first building in the city to be floodlit and was proclaimed at the time to have the fastest lift in the country.
The building was designed to provide AEPB with a grand, imposing presence on Queen Street at a time when electricity had superseded gas and coal as the major source of power. The AEPB, which was then the sole provider of electricity in the Auckland isthmus, celebrated the dawning of a new era by opening the building on the same day as the hydro-electric dam constructed by the Public Works Department at Arapuni on the Waikato River in the southern Waikato.
Heritage New Zealand says the building was also a celebration of communal pride, with New Zealand motifs being used and local firms, including the architects, Wade and Bartley, preferred in its construction. The AEPB offices were located on the upper floors of the building, while the rest was rented out to other commercial and retail businesses. A ninth floor was added to the building in 1933. The AEPB moved its headquarters to Newmarket in 1968 taking the panelled boardroom from Landmark House to its newer premises.
The building has an Historic Places Category 1 classification with Heritage New Zealand describing it is as a highly individual landmark and the most striking early skyscraper styled building in northern New Zealand. Its pressed cement facade, patented by Hall and Stanborough, is especially unusual while notable internal elements such as decorative plasterwork have been retained in its lobby and original top floor.
Alan Haydock, James Chan and Damien Bullick of Bayleys.