A North Shore building, that has been the call centre hub for a number of national companies, is on the market as the owner moves on to new property pastures.
The 1976 built, five-storey Intergen building at 15 Huron Street, Takapuna quickly became the preferred head office call centre for insurance company Tower and financial services company Dorchester.
Tower and Dorchester have now left but international insurance company AIG now has its call centre on level three of the building. Neighbouring tenants include government department Legal Services Agency and Advice Financial on level one and Wellington-based business solutions company Intergen on level 2.
The Takapuna CBD property has had a strong history of national tenants and is about to become home to Intergen for the second time as it comes on to the market through Colliers International.
The two international real estate services companies are selling the 3096 sq m building on a 1012 sq m site by private treaty and expect it to be attractive to an owner-occupier who can use the vacant top floor and gradually expand over the rest of the building or an investor who has long-term ownership aspirations and can reap the rewards of rising rent.
Floors in the Intergen building are big by Takapuna standards. The average 774 sq m floors have been attractive to bigger companies wanting to house all their staff on one floor. The newest tenant Intergen has signed a six year lease for its space.
At rents of between $210/m² and $240/m², the floors are a cost-effective alternative to Albany’s newer office buildings – often cheaper by $100/m².
To attract and retain tenants, building owner GAI Taranga Partnership (GTP) has spent in conjunction with existing tenants about $1.5 million giving the three leased office floors a complete refurbishment. The top floor is available for lease as a whole or can be split into two or four tenancies and GTP is offering to underwrite the floor’s rent for a new purchaser’s first year of ownership.
Colliers International North Shore managing director Andrew Hiskens says the makeover has lifted the floors from lower-grade to high-grade swish, modern office space in a building that is situated right in the middle of Takapuna CBD’s next stage of development.
The building has reinforced concrete foundations with a reinforced concrete structural frame and pre-stressed concrete flooring. Side walls are concrete block. Offices can be subdivided from the foyers on each level. The ground floor foyer was refurbished during the 1990s and incorporates two lifts.
Intergen’s second tenancy in the office building is a step up from its first Auckland office, located in the building’s previous floor of serviced offices. The company grew and left for bigger premises at Fred Thomas Drive. Unprecedented growth over the past four years has forced Intergen to again look for bigger offices with a higher profile and will move back into the Huron Street building at the end of this month and take naming rights.
Colliers International brokers Tony Allsop and Janet Marshall say the North Shore City Council aims to develop the property’s surrounding location into Takapuna’s commercial office core.”
Adjacent to the Intergen building is the newly completed 30-level luxurious Sentinel apartment tower, ground floor retail and a boulevard connecting Huron and Northcroft Streets. Also adjacent is the old gas works site where Location Group is planning Merge, a 34 level commercial, residential and public car park development.
Plans for Merge include 10,500 sq m of office space over four levels, a mix of semi-bulk retail, speciality shops, cafes and a restaurant within 10 separate tenancies, a high-rise tower containing more than 100 apartments an eight level public car park with room for 750 vehicles. Location Group has lodged a resource consent application with the council for the Merge development.
Marshall says Takapuna remains the regional commercial centre for the North Shore and is not expected to change, although Albany is a city in the making. “Takapuna and Albany will complement one another at either end of the North Shore city’s boundaries.”
Takapuna rents, says Allsop, have remained realistic and attracted some of the North Shore’s bigger tenants. Vacancies in the commercial hub’s office buildings have hit a four year low, dropping to just over four per cent. “Vacancy levels are expected to drop further, despite new space coming on to the market in the next year to 18 months.
“As supply runs thin, tenants’ decision-making will have to shorten so they can capitalise on the best available opportunities.”
Marshall says demand for office space on the North Shore has been soaring as business owners buy property to control their own costs and investors park their funds in solid properties, such as Huron Street.
“Most of the demand has come from within the North Shore market itself as many businesses expand and reposition in higher quality space. This has led to an increase of movement within the North Shore and the beneficiaries have been new office units and bigger higher grade office floors.”
Hiskens says owner occupiers and private investors have dominated the North Shore investment sales market. “Many of the sales have been to owner-occupiers wanting to eliminate rent and investors looking at long-term options.
“There have been slightly softening yields, however, potential rental growth should stimulate investors. “With high levels of leasing inquiry and absorption landlords are catering to strong demand for quality accommodation.”
He says like much of the Auckland metropolitan office market, the North Shore has been the beneficiary of rental growth. “Takapuna rents at the top end are now sitting at between $295/m2 and $350/m2. The tight North Shore leasing market and new, high quality stock coming on the market within the next two years can only lead to rental increases.”
Allsop says the property’s location, history and solid construction makes it an ideal passive tenanted investment, suitable for an investor’s portfolio, a family trust or a business wanting bigger premises and profile.
The Intergen building sits on the northern side of Huron Street, about 150 metres from the intersection of Lake Road and Huron Street at one end and Auburn and Huron Streets at the other end, giving easy motorway access. It is a 10 minute drive from Auckland’s CBD.
Roading improvements include the new Esmonde Road interchange and the Northern Busway linkage between Albany, Takapuna and Auckland city.
Under the North Shore City Council’s District Plan the property is zoned Business 3 Area C. The zone’s area is to the west of Takapuna’s retail precinct and allows for greater height in return for less site coverage and public amenity. This marks the area as the business core of central Takapuna.
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