Office building with established tenant
A fully-leased multi-storey office building in the tightly-held central Auckland suburb of Grafton presents prospective purchasers with the opportunity to secure a high-quality asset with a significant rental stream and strong tenant covenant.
160 Grafton Road, Grafton, offers about 6157sqm of total net lettable area on a 4437sqm site. The freehold property is zoned Business – Mixed Use under the Auckland Unitary Plan.
Offering four levels of office accommodation and an adjoining building with 196 car parks, Te Whatu Ora Te Toka Tumai Auckland, formerly known as the Auckland District Health Board, is the tenant of the property with long-term leases in place across the various floors. Turbo Staff leases five of the 196 car parks.
The approximate passing rental income from the property is $2,496,150 plus GST per annum with further anticipated rental growth to occur in January 2023.
The high-profile property enjoys excellent exposure and accessibility to the Southern Motorway, while there is 21m of frontage to Grafton Road and 36m to Arawa Street.
There’s a notable number of amenities in the surrounding area, including popular hospitality spots, the University of Auckland, gyms, and Westfield Newmarket.
Colliers directors Blair Peterken, Jason Seymour and David Burley have been exclusively appointed to market the property for sale and are taking expressions of interest with a deadline of 4pm on Wednesday, November 16, unless sold prior. Originally constructed in the 1980s, the ground floor provides 1249sqm of net lettable area while Levels 1-3 span from
1528sqm to 1,660sqm. The third floor has 77sqm of deck space.
Te Whatu Ora Te Toka Tumai Auckland’s leases have final expiries ranging from July 2029 to December 2033. The leases on Levels 2 and 3 include annual CPI rental increases.
Peterken says the property is a high-calibre investment opportunity.
“Properties with government tenants are highly sought-after among buyers given the strong tenant covenant on offer.
“The lease agreements are favourable to buyers with fixed annual increases providing built-in growth,” Peterken says.
Seymour says Grafton is a popular suburb that provides convenient access to the CBD and notable landmarks, including the Auckland Domain and Auckland War Memorial Museum.
“The subject property is positioned within minutes of the city centre, Kingsland, Newmarket, and Ponsonby,” he says.
“The majority of Grafton is double grammar zoned with multiple primary and intermediate school zones in the area. The suburb is characterised by its historic buildings, many of which are essentially unchanged from the early decades of the 20th century.
“The area remains popular for office buildings due to its ease of access to public transport networks and the motorway, offering connectivity to all corners of Auckland.”
Burley says while the property has an existing tenant in place, there is also future development potential given the flexible zoning.
“The Business – Mixed Use Zone is typically located around centres and along corridors served by public transport. It acts as a transition area, in terms of scale and activity, between residential areas and the higher density business zones,” he says.
“The zone provides for residential activity as well as predominantly smaller scale commercial activity that does not cumulatively affect the function, role, and amenity of centres. The zone does not specifically require a mix of uses on individual sites or within areas.”