Law firm buys Spark building for $200m
The Spark building in central Wellington has sold for nearly $200 million, making it the most expensive office building ever sold in the capital.
The 12-storey building at 40-48 Willis St was sold by Ian Cassels’ The Wellington Company to an investment syndicate represented by Queenstown law firm Mitchell Mackersy for $197.5m.
Cassels said the sale would allow him to focus on ‘‘cracking the hard nut of affordable housing’’ in Wellington.
Mitchell Mackersy senior partner Tess Wethey said the law firm that bought the building ‘‘specialises in commercial property syndication’’.
‘‘Our clients tend to be long-term clients and investors, in this case we have a number of new investors and investor groups but the commonality is they’re New Zealand-based.’’
Cassels first tried to sell the office tower four years ago, however the deal, understood to be a $180m bid for the property, fell through. Cassels has remained mum on the circumstances around the deal’s collapse.
But it appears to have been for the best for Cassels.
The sale well exceeds the property’s rateable value of $125m.
Last month, Cassels and his son Alex launched Te Kainga, an affordable rental project.
Te Kainga is a joint initiative with Wellington City Council to convert Freemason House at 95-201 Willis St into 35 affordable rental apartments for CBD workers.
The high-profile property developer in Wellington is also the man behind the controversial Shelly Bay development, the Erskine College project, and he has built several inner-city apartments blocks.
Wethey said the Spark building’s ‘‘109 per cent of new build standard, A-grade seismic rating’’, five Green Star rating, and Wellington’s historically low vacancy rates were ‘‘the crux’’ of the sale.
‘‘It helps in your dealings with tenants.’’
The property will be managed by Mitchell Mackersy’s asset management firm Maori Hill Property.
The company manages 68 commercial properties in New Zealand including the Kathmandu building and Vodafone InnoV8 building in Christchurch’s Innovation Precinct, and in Wellington Clyde Quay Wharf, and One Market Lane, which is home to Trade Me offices, Mojo Coffee, McNamara Research and Cable St Development.
Cassels, the managing director of The Wellington Company, completed the Spark Building in 2011, incorporating a refurbished heritage building on its Willis Street frontage.
CBRE agents Matt St Amand and Brent McGregor brokered the deal.
‘‘What we are seeing now is that the things that traditionally made investors nervous about Wellington – the weather, the distance and the possibility of the occasional earthquake – aren’t the city’s defining features any more.’’
St Amand said the property attracted strong interest from international investors, with offers from Germany, Singapore, Hong Kong and Australia.
‘‘We were delighted that Wellington continues to be a destination of choice for offshore investors, but ultimately the strongest offer came from our own backyard.’’
St Amand called the Spark building ‘‘one of the largest and highest quality office assets in the Wellington CBD’’.
Tenants include Stuff, Spark, BNZ and AMP.
Wethey said the sale would have no impact on the leasing terms of tenants.
The sale of Spark Central further maintains office as the sector seeing the highest total sales in Wellington this year, according to a CBRE report released last month.
The unconditional sale will be settled in early 2019.
It follows the sale of HSBC Tower at 195 Lambton Quay to Credit Suisse for $103m in May, also brokered by CBRE.
Ian Cassels said the sale would allow him to focus on ‘‘cracking the hard nut of affordable housing’’.