High-profile Cook St duo fetch $13.85m

Building that’s hosted radio stations for 25 years and its neighbour offer CBD options

Two neighbouring properties in Cook St in Auckland’s CBD have sold to separate buyers at a combined value of $13,850,000. In the larger of the two transactions, the Radio Network building at 54 Cook St sold for $10.3 million while next door at 50 Cook St a vacant building, formerly occupied by the Fine Wine Delivery Company, went for $3.55 million.

Paul Hain of Bayleys, who negotiated the sale of 54 Cook St, says the property was purchased by a private Auckland-based investor at a 9 per cent yield. The well-known 3717sq m building on a high-profile 1497sq m site on the Nelson St corner has been occupied by radio stations for nearly a quarter of a century.

The Radio Network (TRN) has a nine-year lease over the entire building from July 2007 with its seven core radio stations operating out of the building: Newstalk ZB, Classic Hits, ZM, Hauraki, Radio Sport, Coast and Flava.

Hain says the property was sold with a three-year vendor underwrite on the lease from July 2016 should TRN not renew, providing income for the new owner while a new tenant was sought or redevelopment options were considered for the site, which has high exposure to large traffic flow along both Nelson St and Cook St.

The property produces annual net rental income of $929,900 which is adjusted upwards every three years by the increase in the consumers price index.

At its commencement in 2007, the lease was producing $800,000 and increased to its present level at the last review in July 2013.

TRN, formed after the sale of Radio New Zealand Commercial by the Government in 1996, now operates more than 130 radio stations in 26 locations across New Zealand and is a wholly owned subsidiary of APN News & Media. APN recently undertook a capital raising to help fund its $144 million acquisition of US-based Clear Channel Communications’ 50 per cent shareholding in TRN and the Australian Radio Network.

Hain says TRN has three threeyear rights of renewal on its lease which, if exercised, would take its occupation of 54 Cook St through to 2025. It has recently spent about $700,000 modernising the building’s four floors. The top three levels comprise a mix of broadcast studios with state-of-the-art equipment, plus offices for support, sales and management functions. The ground floor has a reception area and houses 33 covered car park spaces.

Next door, 50 Cook St comprises a 2009sq m three-level building developed in 1960, with subsequent additions, on a 1353sq m site with access also from Nicholas St. Alan Haydock of Bayleys Auckland, who sold the property with colleague Cameron Melhuish, says it was bought by an owner-occupier who is now refurbishing the building inside and out before occupation.

Both properties are in the Strategic Management Area (SMA) 3 — Victoria Quarter Precinct zone which permits buildings up to 50m high with a basic floor area ratio of four to one and a maximum of six to one.

“Auckland Council has recognised that a significant portion of the CBD’s diminishing supply of vacant and underutilised land is in the western area and it is the least developed of the peripheral strategic management areas outside the core CBD,” says Melhuish. “The SMA 3 zoning therefore provides flexibility for a variety of commercial and residential uses or a combination of these.”