Established New Zealand insurer Fidelity Life is selling its long-held Newmarket headquarters after many years of proud ownership.
The property at 81 Carlton Gore Road, Newmarket – known as Fidelity House – is a seven-level commercial building at the top of Carlton Gore Road, boasting unencumbered views over Auckland Domain and the CBD skyline.
The property’s scale, location and generous zoning make it ideal for refurbishment or adaptive reuse, providing an opportunity to add significant value in a strategic city fringe location.
A new owner could upgrade the commercial space to realise significant rental upside, or reposition the building through residential, accommodation or mixed-use conversion.
Colliers International’s Auckland Investment Sales team is marketing the property for sale by expressions of interest.
Associate Director David Burley, who specialises in Newmarket commercial property sales, describes it as a value-add offering with true scale.
“Fidelity Life, which currently occupies approximately 85 per cent of the building’s area, is considering its options after many years of ownership, creating an unprecedented opportunity to acquire a tightly-held building in a sought-after commercial location.
“The vendor is offering the property for sale with itself remaining on a negotiable leaseback term that will provide substantial holding income for a new owner while planning their next steps.
“The property’s existing improvements can be utilised to provide critical time and cost efficiencies compared with a brand-new development.
“In the future, a new owner could hold and re-lease the existing office space, or undertake a comprehensive upgrade and refurbishment programme to generate significant rental uplift, depending on what is negotiated with the vendor.
“The case for continued commercial use is underpinned by record low office vacancy and strong tenant demand in Newmarket, which is considered Auckland’s premier city fringe office location.
“Carlton Gore Road is particularly sought-after by high-calibre tenants, thanks in part to its proximity to the motorway network and the Grafton Train Station.
“There is also a very strong case for repositioning the asset to take full advantage of the property’s Business Metropolitan Centre zoning, which allows for a broad array of uses.
“The building’s location and sweeping views make it ideal for residential or accommodation conversion. Options could include apartments, student accommodation, a hotel, or a build-to-rent residential redevelopment.
“There may also be scope for investigating a combination of these uses, potentially with retail on the ground floor and a mix of office, residential and accommodation on the floors above.
“With so much flexibility to add value, this is a truly exciting opportunity to reshape a strategic asset in one of Auckland’s best locations.”
Kris Ongley, Associate Director of Colliers’ Auckland Investment Sales team, says the property comprises 4,540sq m of net lettable area and 133 car parks on a 2,780sq m freehold site with 45m of frontage to Carlton Gore Road.
“The property has five floors all currently configured for professional offices, plus two levels of car parking. Of the 133 parking spaces, 109 are covered and 130 are secure. The current existing floor plates can be used far more efficiently, which adds to the case for refurbishment or repositioning.”
Originally constructed in the 1980s, the building was expanded in 2005 with a four-level annex to the rear. A 2017 report by Tonkin Taylor indicates the building is of sound construction with an initial seismic assessment of 100 per cent National Building Standard.
Four of the office floors and 105 car parks are occupied by Fidelity Life. Fidelity Life is a New Zealand-owned insurer that was founded in 1973. It paid $125.7 million in claims in the year to 30 June 2019, and has paid a cumulative $1 billion in claims since establishment.
Level 2 has been leased for more than 20 years by MGI Auckland Limited. MGI is a business accounting and advisory service provider, and is a member of the MGI international alliance of independent auditing, accounting and consulting firms.
Gareth Fraser, Auckland Director of Investment Sales at Colliers, says the property is strategically positioned to the northwest of Auckland’s most desirable and recognisable city fringe suburb.
“The immediate vicinity has benefited from a resurgence of commercial growth, including the large-scale office development at 33 Broadway and the planned office developments at 47 and 49 George Street and 108 Carlton Gore Road.
“These and other projects are resulting in a significant increase in the local commercial population and associated flow-on activity.”
Fraser says the property for sale is within walking distance of everything Newmarket has to offer including retail, hospitality, cafes and gyms.
“There is significant amenity in the area including Westfield Newmarket, Auckland Domain, the University of Auckland’s Newmarket and Grafton campuses, and Auckland City Hospital.
“This amenity has made Newmarket one of the strongest-performing residential areas of Auckland, with median house prices appreciating at a greater rate relative to the rest of Auckland City.
“Real Estate Institute figures for December 2019 put the median house price in Newmarket at $1.6 million – considerably above Auckland City’s record high median house price of $950,000.
“The strength of Newmarket as a commercial and residential hub makes 81 Carlton Gore Road an astute investment, no matter which value-add option a buyer chooses to pursue.”
Expressions of interest close at 4pm on Wednesday 8 April.