A modern, multi-level office tower anchored by an ASX-listed tenant who operates on a global basis has been put up for sale in the Auckland’s central business district.
With eight levels of offices and three levels of basement parking, the 11-storey building at 124 Vincent Street lies in an inner-city precinct which is seeing unprecedented growth and major infrastructure and amenity improvements.
The property’s net lettable area of 4,478-square metres is fully-occupied, with long leases and fixed annual rental growth – currently returning net rental income of $1,459,417 plus outgoings and GST per annum.
ASX-listed Flight Centre Travel Group with a market capitalisation of about $3.5 billion is the anchor tenant paying $1,132,562 plus outgoings and GST per annum for approximately 3,488 square metres plus 52 car parks, on a lease which extends to 2030, with a further five-year right of renewal.
Flight Centre is one of the world’s largest travel agency groups. After starting with one shop in the early 1980s, it has grown into a global business with more than 40 brands and around 19,000 staff and 2,800 stores around the world.
Flight Centre subleases space on the lower three levels to Airedale Property Trust, the property arm of the Methodist Church of New Zealand, and part of the ground floor and level seven to leading Australasian construction company the Icon Group.
Some 884 square metres on levels six and seven, plus three car parks, are leased to state-funded distance education provider Te Kura. Formerly known as the Correspondence School, Te Kura is New Zealand's largest state school. It has regional offices in Auckland, Wellington, Hamilton and Christchurch.
Te Kura pays annual rent of $271,895 plus outgoings and GST on a lease that runs through to the end of 2022.
The property at 124 Vincent Street is being marketed for sale through Colliers by way of deadline private treaty closing at 4pm on Wednesday 5 May, unless it is sold earlier.
Shoneet Chand, Investment Sales Director at Colliers, says the modern, air-conditioned office building sits on approximately 1,458 square metres of freehold land zoned Business – City Centre under the Auckland Unitary Plan.
“The ground floor includes a spacious entry lobby leading to the main lifts, in addition to some office space to one side and the rear. A café is also located beside the building’s entrance.
“Levels one to seven have an almost oval-shaped floor plate, with the building services core adjacent to the southern wall. Levels two to six have external balconies on the northern side, running to the eastern side.
“Most of the office accommodation floors have a predominantly open-plan layout with standard lighting, suspended ceilings and carpets throughout. Flight Centre has created a café-style amenity on the third floor in an industrial theme with exposed ceilings and services,” says Chand.
Originally constructed in 1986 by Mainzeal Construction and designed by Jasmax Group, 124 Vincent Street features high-quality services and significant fit-out upgrades made by the tenant and landlord. Strengthening works undertaken in 2016 have given the structure a seismic rating of 70 percent of new building standard.
The 55 car parks in the building’s basement are supplemented with two dedicated service parks.
Tony Allsop, Investment Sales Director at Colliers, says the Vincent Street property sits within a mixed-use precinct on the western side of Auckland’s CBD which is undergoing a major rejuvenation. “The site is set among high-rise residential apartments, office buildings, hotel developments and is a short walk from the Aotea entertainment hub.
“A high concentration of amenities and proximity to motorways and public transport – including the future Aotea and Karangahape city rail link stations – make this locality attractive for both business and residential uses.
“As such, this property will afford a buyer with a number of opportunities. A new owner could choose to refurbish, reconfigure and add value to the existing structure.
“They could undertake a medium-term repositioning of the building as a more boutique office property, given its desirable location and accessibility.”
Alternatively, a new owner could make use of the significant holding income and plan to redevelop the building for residential use, says Allsop.
“Upon the expiry of existing leases, this building presents itself as an ideal residential conversion opportunity – with generous north-facing decks, a south-based services core and sweeping city views from its elevated location.
“This quality investment proposition also benefits from significant investment in public infrastructure and gentrification as well as providing excellent access to State Highway 1 and the North Western Motorway, both within 400 metres from the site.”
Matt Plowman, Investment Sales Broker at Colliers, says the surrounding precinct has given rise to a number of other residential developments in recent years.
“As early as 2009, the Eclipse Apartments at 156 Vincent Street delivered 174 residences on 14 levels.
“At 132 Vincent Street, an office-to-residential conversion completed by the Tawera Group in 2015 won the Property Council award in the adaptive and re-use category.
“More recent developments include the 15-storey The Vincent, at 106 Vincent Street, whose 171 units were 100 percent pre-sold ahead of its completion in 2020.
“Meanwhile, directly across the road from the property for sale a 10 to 12-storey apartment complex is planned at 105 Vincent Street, with completion expected in 2023,” says Plowman.