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CBD office tower with global anchor tenant offers future residential options

CBD office tower with global anchor tenant offers future residential options

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.


Related Experts

Shoneet Chand

Director

Auckland North

Shoneet has been involved in selling investment property for over 13 years and since 2015 he has been a Director in the Investment Sales Team at Colliers International, specialising in Investment & Development Sales across the wider Auckland region.

Over the past 8 years he has been one of the most successful investment sales brokers in Auckland with a track record of significant sales second to none. He has had considerable experience in dealing with international purchasers and has recently completed several deals with investors out of Asia, Europe and the Middle East. He has been involved in a number of large land sales and portfolio sales, including divestments for well-known brands like Z Energy, The Warehouse & Bunnings.

Shoneet has been the top broker in his market for both 2014 and 2015 while also placing in the top 10 brokers nationwide again for Colliers in 2016. In 2017, Shoneet transacted over $260 million of property and was ranked 2nd in New Zealand.

He was the top broker at Colliers in the 2018 financial year and a finalist for the Commercial & Industrial Salesperson of the Year award, which is judged nationwide across all agencies. In both 2019 & 2020 he was again ranked in the top 5 brokers nationwide for Colliers and was involved in over $300 million & $325 million of sales in each calendar year. 

Over the past six years, he has transacted over $1.5 Billion dollars in sales.

Notable Transactions over $10m include;

  • 2-4 Fred Thomas Drive, Takapuna -   $60,850,000
  • 33 Corinthian Drive, Albany  -   $50,500,000
  • 229 Dairy Flat Highway, Albany -   $33,000,000
  • Todd Industrial Park – Wellington -   $33,000,000
  • 9-11 Corinthian Dr, Albany -  $27,340,000
  • 44 Taharoto Road, Takapuna -   $27,270,000
  • 279-301 Lincoln Rd, Henderson -   $27,000,000
  • 11 Coliseum Drive, Albany -  $26,700,000
  • The Warehouse, Albany -   $26,400,000
  • LEP Childcare Portfolio-   $20,775,000
  • Farro Fresh/ASB Constellation Dr -   $25,500,000
  • Kmart Te Rapa  - $23,750,000
  • 1-11 Parkway Drive -   $21,000,000
  • Noel Leeming, Wairau Park -   $19,000,000
  • 5 The Warehouse Way, Northcote -  $19,000,000
  • Rapid Labels – William Pickering Dr -  $17,300,000
  • 16 Dinning Road, Riverhead -  $16,500,000
  • 35-45 The Strand, Parnell -   $16,100,000
  • 44 Arrenway Drive, Albany -   $15,300,000
  • 151 Lincoln Road, Henderson -    $15,250,000
  • 51 Corinthian Drive, Albany -  $15,150,000
  • 7-21 Kawana Street, Northcote -  $14,998,100
  • 124 Bush Road, North Harbour -   $14,950,000
  • 550 Te Irirangi Drive, Botany -   $14,200,000
  • PlaceMakers, Albany -    $14,000,000
  • 24 Oteha Valley Rd Extn, Albany -    $13,300,000
  • 217-227 Archers Rd, Wairau Valley -   $13,250,000
  • 44 Arrenway Drive, Mairangi Bay -  $13,117,116
  • 6 Canaveral Drive, Mairangi Bay -   $13,000,000
  • 119-121 Onewa Road -   $12,750,000
  • 3 Monahan Road, Mt Wellington -  $12,680,000
  • 155 Wairau Road, Wairau Valley -   $11,500,000
  • 13 William Pickering Drive, Albany -  $11,400,000
  • 14-18 Lovell Court, Albany -  $10,500,000
  • WCDL Development on Onewa Rd -  $10,250,000
View expert

Tony Allsop

Director

Auckland

Tony joined Colliers International as senior property manager for the Auckland Property Management Division in 1996. From National Manager of Property Management 2000-2004, Tony joined the Commercial Sales team in 2004.

He specialises in investment sales in the Auckland CBD and fringe works closely with private clients and corporates alike. He has expertise in selling add value properties and development sites.

View expert

Matt Plowman

Broker

Auckland

Matt is an Investment Sales Broker with a focus on the Auckland CBD and city fringe areas.

Prior to joining Colliers, Matt attained a BCom from Otago University, majoring in Finance and Management, then moving on to spend more than 6 years in the insurance industry. Matt worked for QBE Insurance as an Assistant Underwriter of Commercial Property and then OnePath Life before establishing his own business, Plowman Wealth Protection. Over the course of three successful years of advisory and brokerage within his business specialising in life and disability insurance, Matt honed his sales and negotiation skills which he now applies to his role in commercial real estate.

Matt is exceptionally reliable and has a tremendous work ethic. He’s dedicated to serving his client’s best interests and achieving the best possible outcome for his clients.

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