‘ Under- utilised’ site on Wellesley
A fully occupied Auckland CBD standalone property opposite the entranceway to the City Works Depot and Sale St is for sale, offering its next owner initial annual rental income of $ 300,526 and future add value potential.
The property will be sold by a tender process, closing May 23, unless sold earlier.
It is being marketed by Cameron Melhuish, Brendan Graves and Ben Wallace of Bayleys’ Auckland office.
“This is a compelling investment opportunity, encompassing a good quality building which is 100 per cent tenanted in the flourishing Victoria Quarter,” says Melhuish.
“Longer term, the under- utilised site and a flexible zoning, which permits a wide range of activities including residential and has a 30m height allowance, provides development options. It’s very much a case of enjoying the income while considering the property’s further upside potential.”
Melhuish says the existing t wolevel building, which has had upper level mezzanine space added to it, was originally developed as industrial premises in the 1960s for a printing company and has been converted and upgraded to provide well- appointed commercial accommodation. It i s currently occupied by six tenants, mostly on three to nine year leases with built in rental growth based on the Consumer Price Index and/ or fixed annual rental increases.
“The largest tenancy comprises approximately 248sq m of ground floor retail space fronting Wellesley St West,” says Graves.
“It is the Auckland CBD superstore for the Xtreme Nutrition health and supplement retail group which has 12 North Island outlets as well as a strong on- line presence.”
The balance of the ground floor, accessed from the rear of the building, is occupied by The Corrective Clinic physiotherapy practice. It includes consultation rooms, a rehabilitation gym and bathroom.
The upper level consists of four office tenancies with mezzanine areas, totalling 601 sq m of lettable floor area. “The largest of these tenancies, at the rear of the building and occupied by Hobby Co, has superb character attributes including polished wooden floors and an impressive stud height with exposed trusses,” says Graves.
He says the tenancies have varying expiry dates through to August 2023 for Xtreme Nutrition, but all with no rights of renewal plus termination rights for redevelopment in the three largest leases. “This offers considerable flexibility for a purchaser looking at further development of the property.”
Wallace says the property adjoins the Les Mills national flagship facility. “Its site spans from Wellesley St to Victoria St, attracting high volumes of clientele and traffic to the area. Les Mills owns the block of undeveloped land next door to 119 Wellesley St, which is used for customer car parking.
“It has potential for further development at some stage which would add further impetus to the rejuvenation of this location which has occurred in recent years.
“This has included the transformation of the former Auckland Council Workshops site across the road into the popular City Works Depot precinct which has incorporated many of the original raw materials of this historic industrial space.
“It i s now home to a number of creative and talented hospitality groups, beauty, fashion and home decor boutique retailers as well as marketing and media companies,” says Wallace.
“Well under way a block or so away is the construction of Sky City’s new 32,000sq m International Convention Centre and a five- star 300- room hotel.
“There is also a surge of development along the southern side of adjacent Sale St, with various large scale projects”
Mansons TCLM has been the most active developer in the Victoria Quarter in recent times having built Spark’s head office complex, the neighbouring BDO Centre in which NZME is the anchor tenant, Oracle House and a new hotel on top of the Victoria Park Market car park building. It is also nearing completion of a new 10,000sq m, $ 100 million- plus office building at 46 Sale St.