Cotton on to this Queen St project
A 13-level Queen St office building has been placed on the market with CBRE, offering the opportunity to add significant value and capitalise on the regeneration of Auckland’s CBD.
On 1738sq m of freehold land just south of Victoria St, 238 Queen St is being marketed by CBRE brokers Brent McGregor and Warren Hutt for sale by international expressions of interest closing on August 25 at 4pm.
The sale offers investors a compelling opportunity to aquire a value-add project of significant scale when very few other CBD office buildings are on the market, says McGregor.
“This asset presents a notable opportunity to refurbish and reposition a solidly-built office and retail building, which is well-placed to benefit from the regeneration of the midtown area as the opening of the City Rail Link draws closer.”
The building has dual frontages to Queen and Lorne streets, along with leases to three governmentfunded educational institutes and several retailers, anchored by Australian retail heavyweight Cotton On. This gives the asset a very strong foundation to deliver additional value to its new owner, Hutt says.
“The property is well leased, providing stable income while the purchaser plans their programme of improvement works. Given its excellent midtown location, it is ideally positioned to gain significant value from the public and private investment into infrastructure and commercial projects within the immediate locality, in particular the City Rail Link.”
Aotea Station will have an entrance just 200m from 238 Queen St and neighbouring landlords are already working on building improvements as they seek to capture value from the expected uplift to the area, says McGregor.
“The midtown area is going to improve significantly when the project is complete. The return of international students from next year will also result in a lot more foot traffic in this part of town.”
Warren & Mahoney has designed a major upgrade of the 228 Queen St character building next door, 246 Queen St has recently undergone a full retrofit and 280 Queen St, a few doors away, is also in line to be upgraded.
Retail activity is also healthy, with Nike due to open a flagship store next door in 228 Queen St and a Footlocker flagship in 246 Queen St complementing the large, two-level Cotton On store on the ground and basement levels of 238 Queen St.
One of the largest private projects planned for the area is Malaysian Resources Corporation Berhad’s 21-storey mixed-use building above Aotea Station, which will incorporate residential, retail and commercial, Hutt says.
“MRCB is investing in Auckland for the first time, having clearly recognised the upside to the midtown location with the opening of the CRL.”
A further opportunity to add value to 238 Queen St exists in the office spaces, currently leased well below market rent levels. Refurbishment could easily result in a significant income uplift, says McGregor.
“With the office floors under-rented, this asset will be regarded as good value buying, perfectly placed for repositioning to attract small to medium sized professional firms looking for a Queen St address.”
The building also includes a high carparking ratio for the area, with 50 carparks on Level 2 accessed off Lorne St. The office floors also have excellent natural light, with functional floor plates of 612sq m each, Hutt says.
“Eighty per cent of all leasing deals in central Auckland are for floor plates under 700sq m, so these offices are ideally sized in the highest demand bracket for many firms searching for CBD office space.”
Constructed in the 1980s, the 9789sq m building has achieved 100 per cent NBS, even though has not undergone any retro-fitted seismic strengthening. The current owner has invested in significant upgrades.