Fringe CBD properties for sale
wo fringe CBD properties in central Auckland are for sale, offering enhanced future development options under their unitary plan zonings as well as immediate potential to add value.
The two properties in Newton and Eden Terrace are featured in Bayleys’ latest Total Property portfolio, released yesterday, are being marketed by Scott Kirk and James Were of Bayleys’ Auckland City & Fringe team.
“They offer a variety of opportunities for investors and developers as well as owner- occupiers,” says Kirk.
The larger of the two offerings is a 2123sq m three- level commercial building on an 1804sq m site at 19 Newton Rd, for sale by tender closing November 17 unless sold earlier by negotiation.
The property is generating annual income of $ 490,042 plus GST from a mix of net and semi gross leases.
“The building i s fully leased to seven tenants but the existing rentals appear to be below market, providing rental growth potential,” says Kirk. “Leases on a significant amount of space on the ground and first floors are either periodic or come to an end later this year or next year, with no rights of renewal.
“This opens up immediate possibilities for the next owner to increase the rental return from the property given the strength of the location. Alternatively, it could present an opportunity for an owner- occupier looking for a good chunk of versatile city fringe space on the border of Grey Lynn and Ponsonby close to the CBD and motorway systems.”
Were says though the building is mostly used as office premises, it would also be suited to showroom and warehouse use. The lower ground floor has 626sq m of high stud space with rear roller door access and would lend itself to warehouse use, showroom/ office or a combination of these uses.
The 694sq m ground floor provides mainly office accommodation, with a smaller storage area with roller door access, and receives excellent natural light from three sides.
The upper floor offers predominantly office space with a small warehouse and showroom area at the northern end of the building accessed up a ramp and with parking directly outside.
Were says the property is in a highprofile position with extensive front- age to Newton Rd and rear access also from Burgoyne St, shown on the title.
“This provides benefits for future development and also allows drivethrough access assisting with traffic movements,” he says.
The area around the building has been tar sealed and provides abundant parking for up to 54 vehicles. There is also a lease on the Newton Rd frontage to ISite Ltd which has two large signs it rents out, making the most of the property’s exposure to high volumes of passing traffic.
Kirk says the property’s Business Mixed Use zoning under the unitary plan has increased the property’s height allowance from 15 to 18 metres and also removed floor to land area restrictions.
The other property comprises boarding and short- term accommodation facilities, in a 1055sq m corner position, at 140 New North Rd, Eden Terrace. It is for sale by tender closing November 15 unless sold earlier by negotiation.
The property is a building comprising t wo converted warehouse areas, known as the Bali Bungalows and Edenvale.
The 1343sq m Bali Bungalows has a high- stud entry off New North Rd and consists of 17 self- contained one and two bedroom units. Storage and car parking is provided in the basement assessed off Porters Avenue.
The 571sq m Edenvale boarding hostel ( above Bali Bungalows) has 22 rooms with a communal lounge, kitchen and two bathroom facilities.
The property is now producing net annual rental income of $ 165,000 and the current tenant has been operating both accommodation facilities since August 2006.
“Either party can terminate the lease by giving six months’ notice, and this could offer a significant add value opportunity for the next owner, given the property’s location in a rapidly developing and increasing sought after residential precinct,” says Kirk. Ultra- fast broadband ( UFB) i s increasingly important for landlords selling and/ or leasing commercial buildings, say the principals of property consultancy and agency Wilson Hurst.
Finn Hurst, who heads up the company’s Auckland office, says commercial landlords should be thinking about the future of their investments in terms of telecommunications capability.
“With the UFB network installation well under way, and construction of technology- focused offices is hitting all- time highs, we’re advising our clients that ignoring these technological advancements would be at their peril,” Hurst says.
“Connection speeds are of crucial importance for businesses today, which have increasingly data- heavy needs. This means UFB, which will revolutionise New Zealand’s connectivity, is set to have a direct impact on the commercial property market.”
Vaughan Wilson, Wellingtonbased principal and director of Wilson Hurst, which provides property services to major national telecommunications companies including Chorus, Vodafone and Spark, says that until now New Zealand has been relying on its 100- year- old copper network for most internet connections.
“The copper network has been improved through technological upgrades, but fibre has much, much greater capacity and is not restricted by distance like copper is to the nearest cabinet or exchange. This is essential in today’s world where we demand fast speeds for downloading data- heavy content such as video.”
Copper uses electrons and electrical conductivity, while fibre uses light and consequently works at the speed of light: nearly three million metres per second, Wilson says.
“When you’re viewing a website that is hosted in Los Angeles, the data is travelling from the United States to New Zealand under the ocean inside a fibre cable in a fraction of a second. Light is the fastest thing we know of and that we can harvest, and this is why the government is spending so much money on fibre, to future- proof our communications needs.” Prospective house purchasers — with their children’s tech- heavy needs in mind — are already asking real estate agents about the availability of fibre in streets and this may be impacting their purchase decisions, Wilson says.
“Fibre- connected homes are of importance for businesses that allow staff to work from home, as they will want to ensure staff can work efficiently using their home internet connection. Only fibre can provide this exponentially- higher capacity in broadband speed and reliability.”
In the commercial property market, UFB i s also becoming highly sought after among tenants, says Hurst.
“The availability of fibre can affect the potential leasability of a property, potentially flowing on to impact values as well. Tenants are very particular about their communication requirements and the availability of fibre can have a major impact on their decision- making when looking for new premises.”
This is partly because of the recent growth of cloud- based IT solutions for businesses. Without large and reliable bandwidth; cloud- based data storage, off- site servers and VOIP ( or Voice Over Internet Protocol) would not be viable, he says.
“Cloud- based solutions are becoming favoured among businesses as it means they can dispense with onsite server rooms in their offices, which take up valuable space. However, relying on offsite storage means businesses need to be able to rely on high- capacity broadband in order to access data from the cloud as and when it’s required.”
During the installation process, network operator Chorus ( which is rolling out the UFB network in Auckland) first installs the fibre to buildings, and then to individual tenancies. This makes the fibre network available for current and future tenants no matter which service provider they use currently or in the future, Wilson says.
Landlords are therefore encouraged to actively work with network operators to facilitate fibre installation in their properties, to streamline the connection process for tenants who wish to make the switch to UFB.
“Without fibre, a commercial property looks a much less attractive option compared with the opposition property that has fibre.
“And let’s face it, when it comes to leasing vacant property, you want to have all the weapons you can to compete.”