Winz office sale to benefit investors

5:00 AM Saturday October 1, 2016 True Commercial

The L-shaped four-storey Lake Rd building (centre of photo) is in Takapuna’s central business district.

Land and buildings housing Australasia’s biggest TV and online marketing company, and Work and Income New Zealand’s offices in the heart of Auckland’s North Shore, have been placed on the market.

The freehold land and buildings are being marketed for sale by Bayleys North Shore salespeople Simon Aldridge and Michael Nees through a tender process, closing on October 27. The property features in Bayleys’ latest Total Property magazine.

Aldridge says the property, at 519-521 Lake Rd, in Takapuna’s central business district, is an L-shaped 2587sq m section with a four-storey building containing 4882sq m of office space.

Proposed new Auckland Council building guidelines allow for the creation of an 18-storey apartment tower on the predominantly flat site.

Combined, the dual tenancy schedule for the four-storey block delivers annual net rental revenue of $1,405,781. Sitting directly across from the Shore City shopping mall, the building’s open plan ground floor encompasses 1589sq m of retail space.

The Government’s social welfare and befits payment agency, Work and Income New Zealand, leases the entire ground floor, generating a net effective annual rental of $390,361 plus GST. Winz has a lease expiring early next year, but has two further three-year rights of renewal on its occupancy.

Meanwhile, the remaining three upper levels, each housing about 1097sq m of office premises, are occupied by Australasia’s biggest TV and online marketing company, Brand Developers.

Brand Developers is on a 12-year lease expiring in 2026 with a further six-year right of renewal, delivering annual rental of $1,015,600. There is an option on a three-year notice period for the new owner to yield vacant possession for the Brand Developers premises.

The three levels of offices house several hundred personnel — including the company’s administration and management teams, and the 24/7 national call centre.

The property has 31.7 metres of street frontage on Lake Rd, and an additional 20.1 metres of street frontage on Huron St and comes with 74 off-street car parks, of which 69 are in the basement of the building.

Aldridge says the Auckland Unitary Plan had zoned the site Metropolitan Town Centre — allowing for a much taller structure to be built above the existing footprint.

“The Metropolitan Town Centre zoning permits a wide range of business activities — encompassing retail, supermarket premises, and offices. The plan’s town centre and mixed use zones are expected to accommodate an increase in the density and diversity of housing for Auckland — providing any new building does not preclude opportunities for business development,” says Aldridge.

“This classification is consistent with the more general approach to housing opportunities in the greater city — for which there is considerable political support, and means apartment-style developments above retail frontages are expected to be built in greater numbers in the future.

“The Proposed Auckland Unitary Plan height for 519-521 Lake Rd is 72.5m.

“This increased upper height limit creates far more potential for the development of an apartment structure than the current operative plan.

“While the broader provisions of the Proposed Auckland Unitary Plan may not be adopted for a year or so, an independent review of the building and its future potential use and development opportunities, has indicated that any provision for apartments on the upper levels would survive any objection process.”

The Fletcher-designed building was constructed in 1986 on steel-reinforced concrete foundations, and has an earthquake rating of 80 percent of New Build Standards. The floors are pre-stressed beams with timber shuttering, while the frame is reinforced steel encased in concrete.

The property has a current rating valuation of $13 million — broken down into $8,675,000 for the building and $4,325,000 for the land.

Floors one to three are serviced by two passenger lifts and a separate single goods lift accessible to and from the basement carpark. Internal stairwells are adjacent to each lift shaft.

A new diesel backup generator and electrical switchboard upgrade have recently been installed at the building, which is serviced throughout by externally-housed air-conditioning units.