Two heritage office buildings in the Chews Lane precinct on Victoria Street, Wellington have been sold to a Wellington-based family trust through Colliers International and Paul Hastings & Co.
Rick Stace of Colliers International says the properties, at 56 and 58-60 Victoria Street, were sold 10 days prior to the offer deadline for circa $10 million, representing a passing yield of 8.9%.
Stace, who marketed the properties with colleague Peter Wilkin, says the buildings, which are fully leased and have been managed by Peter Dowell and Andrew Cotterrell from Heritage Property Management, offer a desirable combination of quality office space in a prime location. This ensures their attractiveness to tenants in the future. They have been recently refurbished and meet the latest earthquake-strengthening requirements.
“The properties’ high standard of internal refurbishment and structural strengthening, combined with their location adjacent to the popular Chews Lane in the central business district, means they will always be easy to lease to business tenants,” he says. “The variety of tenants in occupation means the income streams are well-diversified with no dependence on one tenant.”
56 Victoria Street is a 2,312sq m, seven-storey office and retail building constructed in 1927. It was strengthened and extensively refurbished in 2006. The ground floor houses 3C bar and restaurant, with levels one to six comprising character office space leased to a variety of tenants including Degree Design, WHK and Powershop. Annual net income is $571,000 plus gst.
Wilkin says the building was refurbished and strengthened in 2006 as part of the Chews Lane transformation, resulting in attractive character office space behind the original Gothic revival façade.
The building was originally constructed in 1927 for the Colonial Carrying Company. It incorporates details such as brackets and shallow segmental arches which evoke the painted arches and vaults of the nineteenth century’s Gothic revival.
“All floors have a high stud of nearly three metres with the original detailed plaster ceilings and walls re-finished. The ornate wood and marble-panelled lobby and staircase have also been restored,” says Wilkin.
Next door at 58-60 Victoria Street is the seven-storey, 946sq m Ballinger Building, originally constructed in 1900. The ground floor houses a beauty clinic, with offices on the upper floors leased to businesses including Freedom Insurance, Recruit IT Group and Interfleet Technology. Net annual income amounts to some $312,000 plus gst.
Stace says the building was originally built as offices and warehouses for Thomas Ballinger’s plumbing and electrical business. “The building was demolished and rebuilt – with the original neoclassical façade preserved – in 2008, resulting in modern, high-quality office accommodation.”
A peppercorn ground rent of $1 a year is paid to Wellington City Council on the buildings’ 250-year ground leases.
Stace says the properties comprise part of the popular Chews Lane precinct, situated between Willis and
Victoria Streets. “The Chews Lane project has really revitalised this area and the newly-completed Telecom Central building nearby will bring approximately 1900 new employees into the area alone.
“The properties are just to the south of the perceived core CBD and in close proximity of Wellington
Harbour and within walking distance of all normal central city amenities and public transport. It is a popular office locality with major office buildings in the immediate vicinity including State
Insurance Tower, Grand Arcade and Manpower House,” he says.
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