Carlaw Park offers diversified income and premium long-term tenants

Carlaw Park offers diversified income and premium longterm tenants

Auckland’s premium Carlaw Park Investment is for sale, presenting an outstanding opportunity to acquire a high-quality asset with diversified long-term income from outstanding national and international tenants.

Carlaw Park is an integrated, mixed-use investment spanning two modern buildings in a uniquely accessible location, at the nexus of Auckland’s CBD, Parnell, Auckland Domain, the port and Auckland’s major motorway interchange.

It has attracted a range of premium tenants including the world’s largest food and beverage company, Nestlé, alongside infrastructure specialists Jacobs, a government department and a Quest serviced apartment hotel.

The tenants provide a weighted average lease term (WALT) of 5.8 years across both buildings, and return a total net passing income of $6.88 million per annum plus GST.

Carlaw Park is being sold by NZX-listed Property For Industry (PFI), which is divesting of its remaining non-industrial properties to become a pure-play industrial property vehicle.

PFI has exclusively appointed Colliers International to market the Carlaw Park Office Building at 12-16 Nicholls Lane, and the Carlaw Park Gateway Building at 15 Nicholls Lane, for sale by international deadline private treaty.

The buildings will be sold together as a single diversified investment, with offers closing at 4pm on Wednesday 25 November.

Gareth Fraser, Auckland Director of Investment Sales at Colliers, says Carlaw Park is Auckland’s pre-eminent mixed-use, integrated development.

“This is an exceptional opportunity to acquire a split-risk asset with secure long-term income from premium tenants.

“Carlaw Park is superbly located on the doorstep of the Parnell train station, which is set to benefit hugely from the completion of Auckland’s City Rail Link, and is right by the motorway links to State Highways 1 and 16.

“Demand will always exist for offices and accommodation in such a prime location, particularly with such an outstanding range of amenities on offer.

“Carlaw Park benefits from an on-site cafe, restaurant, childcare centre and massage clinic. Nearby local amenities include the Parnell retail strip, a gym, and the Auckland Tennis Centre, Domain, Museum and Hospital.

“The immediately surrounding area is set to benefit from the development of a 10-level, 203-unit student accommodation building, which will be leased to the University of Auckland upon completion in January 2023.”

Richard Kirke, International Director of Colliers’ Capital Markets team, says Carlaw Park benefits from a diversified income stream, which is highly sought in the current market.

“The office leases account for 66 per cent of the total income, with strong covenants provided by Covid-hedged occupiers in the essential food and beverage, infrastructure and government sectors.

“These types of tenants provide long-term security in times of economic uncertainty.”

The remaining income comes from car parking (18 per cent), the hotel (12 per cent), the childcare centre (2 per cent) and retail (2 per cent).

Kirke says Carlaw Park will appeal to an investor seeking passive income, with the opportunity to add value in the future.

“Office rents in this modern, well-specified property are up to 40 per cent lower than similar buildings in the CBD, and the corresponding opportunity for rental growth is clear.”

The Carlaw Park Office Building comprises a four-level, 4 Green Star-rated commercial building completed in 2009.

Situated on a 10,290sq m site, it provides a net lettable area of 11,108sq m including A-grade office accommodation, the childcare centre and parking for 51 vehicles.

The key tenants are Nestlé, Jacobs, the Department of Internal Affairs and Lollipops Educare. Together, the tenants return $4,629,384 in net annual passing income, with a WALT of 4.92 years.

The building is divided into two wings, separated by a central service core and a high-quality atrium lobby with granite flooring and ceramic wall tiles.

The western office wing provides a floor plate of 1,525sq m while the eastern wing has a slightly smaller floor plate of 1,310sq m.

The tenancies feature good quality fit outs which are predominantly open plan with additional meeting rooms and staff break-out areas. The offices benefit from a good stud height and plentiful natural light from full-height glazing.

The ground-level childcare centre is licensed for 60 children and provides a substantial outdoor play area.

The Carlaw Park Gateway Building comprises a four-level mixed-use building completed in 2010.

Situated on a 5,430sq m site, it provides a net lettable area of 2,201sq m including five ground-level retail tenancies and three part-levels of serviced apartment accommodation. It also includes a four-level car parking structure with 655 parking spaces.

The key tenants are Quest and Wilson Car Parking. Together, the tenants return $2,246,317 in net annual passing income with a WALT of 7.55 years.

The retail tenancies have full-height glazed frontages to Nicholls Lane. One is currently occupied by Quest and acts as the lobby to the 42 guestrooms above.

The first two levels of accommodation provide a mix of studio and one-bedroom guestrooms. The top level provides six two-bedroom penthouse suites.

The car park, which is accessed via Nicholls Lane, has efficient ramped floor plates to maximise the number of available parking spaces.

Peter Herdson, National Director of Capital Markets at Colliers, says the site has a storied history.

“Carlaw Park was the home of New Zealand Rugby League for over 80 years. It was named after Auckland Rugby League Chairman James Carlaw, and its stadium and grandstand were officially opened in 1921.

“The ground hosted over 60 internationals, several NRL games and a number of rock concerts.

“By 1994, Auckland Rugby League’s 35 clubs voted to sell the ground. It was closed in 2002 due to health and safety concerns and remained unused for eight years until a partnership was formed to redevelop the site.”

The first stage of the redevelopment comprised the two buildings that are now offered for sale. The second stage was the adjoining Carlaw Campus student accommodation complex, which is leased to the University of Auckland on a long-term basis.

The precinct will soon be complemented by the new student accommodation complex being built on the former Caltex service station site at 28 Stanley Street.

The 28,000sq m development will provide accommodation for 907 students and will have an estimated end value of some $230 million.

Related Experts

Gareth Fraser

Auckland Director - Investment Sales

Auckland CBD

Gareth leads Colliers International's Investment Sales team. The team operates across the entire Auckland market from four strategic locations; CBD (including city fringe), South Auckland (based in Highbrook), West Auckland (based in North West Shopping Centre) and North Shore (based in Takapuna).

This is a large team of brokers and support staff focussed on providing solutions to owners, investors, developers, owner-occupiers and tenants. It features a specialised site sales team focussed on residential land and development opportunites. Investment Sales also includes the syndication division, offerring proportionate ownership opportunities to investors on behalf of clients.

Gareth is also on the Executive Team for Colliers in New Zealand.

View expert

Richard Kirke

Director | Capital Markets

Auckland CBD

Richard is responsible for the promotion of New Zealand property to international investors, leveraging of his relationships developed in executive positions during his near 8 years in Hong Kong, as well as assisting to grow the company’s nationwide Rural and Agribusiness agency capability.

Richard began his real estate career in 2004 with CBRE, in the five years he spent with them (before leaving to run Colliers Hong Kong business in 2008) he was involved in many notable transactions including the sale of the Lion Nathan site in Newmarket for $162m, the sale of the GE & BNZ Britomart properties on behalf of Manson’s to the German fund HIH and portfolio sales, including the successful auctioning of 16 National Bank Branches across New Zealand.

During his time as MD of Colliers Hong Kong he was involved in the sale of 50 Connaught Road on behalf Apollo Group (a New York based Hedge Fund) to the Agricultural Bank of China for $US632m.

Richard was the Managing Director of Colliers Hong Kong office for six years from 2009-2014. During this time he was an active participant in several high value transactions and developed broad relationships with both Asian investors and colleagues across the region.

In late 2014, Richard agreed to run CBRE’s Asia Pacific Capital Market business, including their Capital Advisory (Real Estate Investment Banking) business, this further added to his knowledge of real estate investors, particularly in greater Asia.

As a senior executive of Colliers for 6 years in Hong Kong, Richard has strong personal relationships with Colliers personnel across the globe.

View expert

Peter Herdson

National Director | Capital Markets

Auckland CBD

In 1993 Peter returned to New Zealand from the United Kingdom with several years’ experience in property management and development. During this time, he worked for Vanson Developments (Richard Branson´s property development company) for two years, and in investment and management for Fuller Peiser (Rolls Royce and Vickers Pension Funds). Upon his return to New Zealand, Peter joined Colliers International (NZ) Limited, where he has been ever since.

Peter now leads the Colliers International Capital Markets division, based in the Auckland CBD. The team is proud to have established a new approach to collaborative working within their division, a first the New Zealand marketplace. 

The “Power of Five” approach with the Capital Markets team has driven exceptional outcomes for client service since 2007. The team has adapted a charter unique in the market, with over 100 years of combined experience. The personal and professional networks of 5 directors operating as a cohesive team across all projects, provides maximum leverage and market coverage for our vendors. It ensures an acceleration of all our clients success.

View expert