Viaduct duo feature of new portfolio

5:03 AM Saturday March 12, 2016 Colin Taylor

12 Viaduct Harbour Avenue with 10 Viaduct Harbour in background.

Two neighbouring office buildings, overlooking the waterfront in popular Viaduct Harbour are for sale, with a number of high-profile national and multinational corporate tenants paying total annual rent of $1,756,623 plus GST

Located at 10 and 12 Viaduct Harbour Avenue, they are part of the Maritime Square office block developed in the late 1990s and early 2000s encompassing a number of distinctive Georgian-styled office buildings strategically positioned between Fanshawe St and the waterfront.

They are among 79 properties featured in Bayleys’ first national Total Property commercial and industrial portfolio for the year which was released to the market yesterday.

The two Viaduct buildings are being marketed on behalf of a European property investment company by Alan Haydock, David Bayley and Damien Bullick of Bayleys Auckland who are selling them by international tender closing Wednesday April 6 unless they are sold earlier by negotiation. Prospective purchasers can tender for one or both of the buildings.

“These two superbly appointed buildings are in a prime location with stunning harbour views that can’t be built out,” says Alan Haydock. “There is a small amount of vacancy across the two buildings which, given the precinct’s very low vacancy rate, offers an opportunity for the new owner to generate additional income by leasing this space up.”

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View of Viaduct Harbour from upper level of No 10 building. 

The larger of the two buildings for sale is the six-level building at 10 Viaduct Harbour Avenue with a floor area of 3122sq m and 32 basement carparks occupying a 1332sq m leasehold site.

For 10 years it has housed the head office of NZX listed viticulture company Delegats which recently renewed its lease on 1021sq m of space on the first two levels and also took an additional 362sq m on Level 6. Its leases run until February 2021 with one further five-year right of renewal.

Also occupying whole floors is another NZX listed company, Hellaby Holdings, which recently renewed its lease for a further five years from April 2016. Another is MMI Holdings Limited, a South African based financial services group listed on the South African stock exchange, which has close to 18,000 employees worldwide.

Level 4 has 522sq m of vacant space. The property is currently producing annual rental income of $960,990, but Haydock says it is estimated this would increase to $1,044,165 plus GST when fully leased.

Next door 12 Viaduct Harbour Avenue is also a six-level building but with a floor area of 2714sq m and 35 basement carparks on a 1206sq m leasehold site. The building houses the New Zealand head office of real estate agency Ray White, which occupies Level 2 and also has naming rights on the building.

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Interior view of 10 Viaduct Harbour depicting Delegats’ reception area.

Other high profile tenants include Radius Residential Care occupying the first level, and Wellington headquartered property development company Willis Bond & Co which has its Auckland base on Level 4. Willis Bond is undertaking a number of large-scale Auckland residential developments including in the neighbouring Wynyard Quarter and at Hobsonville Point.

“Level 5 has 458sq m of vacant space, which since being vacated late last year, has received strong leasing interest,” Haydock says. “The property is currently earning $795,633 per annum but could produce $927,898 plus GST when fully leased.”

David Bayley says the Viaduct Harbour remains one of Auckland CBD’s most popular office precincts, with its vacancy rate falling from 4.4 per cent in January 2015 to 3.1 per cent in the latest CBD office survey by Bayleys Research.

“This is well below the overall CBD vacancy rate of 7.8 per cent, with only two precincts lower – neighbouring Wynyard Quarter at two per cent and the small Britomart precinct which has no vacancies.

“The strongest demand for office buildings continues to be focused on the CBD’s northern precincts, adjacent to the harbour, and this is reflected in the fact that much of the CBD’s current and proposed future office development is close to the waterfront,” Bayley says.

In this regard Precinct Properties has announced it has sufficient tenant pre-commitment to proceed with a 39-level office tower on its Downtown Shopping Centre site.

In the Wynyard Quarter, close to the two Viaduct buildings for sale, Fonterra has moved into its new headquarters on the corner of Fanshawe St and Halsey St.  

Behind this building is Bayleys’ new head office which David Bayley says staff will be moving into in August ..Nearby, work is also underway on another head office building for Datacom.

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The two buildings for sale are identified by a red border.  

North of Pakenham Street, the second stage of the ongoing regeneration of 18.5 hectares of Auckland Council owned and controlled land at Wynyard Quarter is also taking shape. This will involve around $1 billion of new buildings and include the complete redevelopment of a 3.5ha block of land to accommodate around 48,000sq m of commercial space and over 500 new homes.

Under construction is Auckland Theatre Company’s new ASB Waterfront theatre, which will open later this year.

A hospitality-industry project is a seven-storey $200 million Park Hyatt hotel being developed by Chinese company Fu Wah International on the former Emirates Team New Zealand site.  

Bayley say it will join the Sofitel hotel, located across the road from 10 and 12 Viaduct Harbour Avenue, as a much needed addition to the supply of five-star hotels in the CBD.

And, on part of the Infratil/NZ Bus site on the southern corner of Pakenham St and Halsey St, New Zealand Rugby is planning a high-tech All Blacks-themed tourist attraction called The All Black Experience which will open in 2017.

“The ongoing development in the Wynyard Quarter is expected to attract an additional 11,000 workers and 2000 residents to the area over the next decade and will be an extension of the vibrant, people friendly mixed use waterfront precinct that has been established at Viaduct Harbour over the past 20 years,” Bayley says. “We would expect that the popularity of this part of the CBD as a business location will continue to grow as additional amenities are put in place and it becomes an even more attractive place to work.”  

He says the buildings at 10 and 12 Viaduct Harbour Avenue are currently managed by Bayleys Property Services Limited and their services will be available to a new owner if required. 

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David Bayley (left) and Alan Haydock (right), of Bayleys Auckland