An historic and award-winning property that is home to the award winning Hotel DeBrett and several well-known fashion and hospitality tenants has come on to the market at 2 High Street, in the heart of Auckland’s CBD.
Marketed by Jason Seymour and John Green of Colliers International and John Schellekens and Warren Hutt of CBRE, the freehold property is for sale by deadline private treaty closing on August 30, unless sold prior.
Green says this is a significant opportunity to purchase an award-winning and well known building with secure tenants in a prime CBD location.
“2 High Street is an investor’s dream. It has everything: rarity, location, profile, status, heritage, long-term tenants, diversified income, rental growth and a spectacular interior that draws people from all over the country. We expect substantial interest.”
Prominent historic landmark
2 High Street has a long history as an Auckland City landmark, Schellekens says. “The site has been occupied by hotels since 1841 and the current building is registered as a Category II building by the NZ Historic Places Trust.”
The four storey (with basement) building was constructed in 1925 and was designed by Wade and Bartley in stripped classical style. It offers a total net lettable area of 2868m2 over nine retail areas and a 25 room boutique hotel including a 50 seat restaurant and two bars. The building generates annual net rental income of $1.22m.
Schellekens says the design of the building is of the highest quality and was recognised in the
Auckland Architecture Awards in 2009/2010, winning the prestigious NZ Institute of
Architects Heritage Award. In addition, the building was strengthened to 70% of current earthquake standards in 2008, with the rating recently re-confi rmed in a structural engineer’s report.
Seymour says several facelifts to the building have enhanced its appeal over its life. “The current owners meticulously renovated the building again in 2008, consolidating the already strong ground floor retail component and creating a unique boutique hotel.”
This extensive renovation saw the building being virtually re-built from the bones up, Seymour says. Particular attention was paid to acoustic insulation, and the entire property was re-wired, re-plumbed and retro-fitted with sprinklers and fire rating throughout, as well as new air-conditioning installed. A soaring two storey glazed atrium was also constructed in the centre of the building.
Retail and hotel tenant mix
Green says the property is fully leased, with nine ground floor tenancies operating in the corner site that has always been popular with boutique retailers, while the hotel takes up the remainder of the space. “Barkers, Crane Brothers, Ruby, 3 Wise Men and Kapiti are just a few of the notable names in occupation.”
Murray Crane, owner and founder of Crane Brothers and a tenant in the building since
1999, has recently signed a new 10 year lease with a right of renewal for a further 10 years through to 2032, which is testimony to the site’s popularity, Green says.
The latest addition to the tenancy mix is Pearl, a stylish women’s retailer which is moving from Ponsonby to be part of the vibrant High Street precinct and the Hotel DeBrett community.
The main tenant is the renowned Hotel DeBrett, which provides total net rental income of $600,000 a year. The leases provide a weighted average lease term of 8.3 years and all include rent reviews, including some with pre-determined, minimum rental growth. The covenants and longevity of the building’s income stream, combined with scheduled rent increases, create an extremely attractive CBD investment for a passive investor, Green says.
Hutt says the award-winning hotel – which was most recently recognised in the 2012 Trip Advisor Travellers’ Choice Awards as one of the South Pacific’s top 25 trendiest hotels and top 25 luxury hotels – contains a range of bars, shops and restaurants.
“Inside the property there are several unique connecting spaces, including an art deco style bar area, a European style courtyard as well as the atrium, which contains the award winning Kitchen restaurant. Each room within the hotel has been individually decorated, with bespoke carpets, eclectic retro furniture and artwork giving each of the rooms a distinctive appearance.”
Seymour says the property benefits from High Street’s mixture of high-end fashion stores, bars, cafés and restaurants. “2 High Street represents a significant commercial property offering in one of Auckland’s most desirable areas. The new owner of the property will really get the best of both worlds, within Auckland’s hub for business, retail, entertainment, nightlife and transport.
“It is a prime opportunity for an investor or private syndicate; a prestigious addition to any investment portfolio. Properties of this calibre in the heart of the CBD rarely become available, particularly with a diversified income which is split roughly half and half between retail tenants and the hotel tenant.”
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