Premium mixed-use property with diversified income
A premium mixed-use property on Newmarket’s most prestigious street is for sale with many desirable investment attributes including an A-plus seismic rating, high-quality fit out, excellent car parking and strong split-risk income streams.
The six-level building at 25 Broadway is located at the northern end of Newmarket’s thriving commercial precinct, which is one of the fastest-growing office locations in Auckland.
Five office and three retail tenants give the property a strong weighted average lease term, supplemented by income from two digital billboards, two cell towers and 33 on-site car parks.
Together, the leases return $1,144,519 in net annual rent. A mix of market, fixed and CPI rental reviews ensures income growth into the future.
Colliers International has been exclusively appointed to market the property for sale by deadline private treaty closing at 4pm on Wednesday 27 November, unless it sells earlier.
Newmarket sales specialist David Burley says 25 Broadway offers impressive investment fundamentals.
“This is a chance to acquire a true trophy asset with all the key investment attributes including an outstanding location, diversified income streams, an excellent building and a premium fit out.
“The property enjoys a prominent position within a pocket precinct that is currently benefiting from a resurgence of commercial growth.
“It is directly adjacent to Mercury’s state of the art new headquarters at 33 Broadway, which was completed by Mansons TCLM earlier this year.
“The immediate area is also home to two significant planned office developments at 47-49 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.
“A property in such a prestigious location, with such strong fundamentals, bears all the hallmarks of the jewel in the crown of any investment portfolio.”
The property comprises a 2,421sq m building with ground floor retail and offices on the floors above. There are also 33 secure car parks spread across a basement level and part of the first level.
The building is mostly constructed of reinforced concrete with a plastered concrete exterior, aluminium joinery and long run steel roofing. It has an A-plus seismic rating of 105 per cent NBS.
The building sits on a 736sq m freehold site with favourable Business Mixed Use zoning.
Adam White of Colliers International’s Investment Sales team says the property presents very well.
“The vendors have undertaken significant capital expenditure to modernise the office spaces to a very high standard.
“The quality fit out is complemented by views over the Auckland Domain and Waitematā Harbour.
“The top four floors benefit from external decks facing north and west, while all five office floors also have views to the east over Broadway.
“The locality and views increase the desirability of the property, especially given the future redevelopment potential provided by the zoning.”
The site has excellent frontage to Broadway, with good exposure to the busy roundabout at the intersection of Davis Crescent.
The property is within walking distance of Newmarket Train Station and the Westfield Newmarket shopping centre, which recently reopened after an extensive $790 million upgrade.
It is also near the Olympic Pools, the Nuffield Street retail precinct and numerous bus routes along Broadway and Khyber Pass Road.
“These excellent levels of amenity, as well as the quality fit out, have attracted a strong and diverse tenant mix,” says White.
The office leases return $651,245 in net annual rent, or almost 57 per cent of the total income.
The expiry dates are staggered between April 2020 and November 2024, de-risking the investment, while all five leases also have rights of renewal remaining.
Level 1 is leased by Furnz Group, which designs and procures interiors for many leading hotel brands. It occupies 205sq m plus five car parks.
The second floor is occupied by CKL, which specialises in planning, surveying, land development, and civil and environmental engineering. It occupies 572sq m plus 10 car parks.
Level 3 is tenanted by Overdose Digital, which provides digital marketing and commerce solutions for leading New Zealand and international brands. It occupies 502sq m plus five car parks.
The fourth floor is leased by NSI Management, which has diverse business interests in the aged care, property, industrial and technology sectors. It occupies 331sq m plus eight car parks.
The top floor is occupied by Fuse Creative, which specialises in brand strategy and design, advertising and marketing, and engagement and culture change. It occupies 193sq m plus four car parks.
The ground floor retail leases return $179,763, or almost 16 per cent of the total income.
The tenants include tailors Wendy and Tom Workshop (159sq m), convenience store Circle K (123sq m) and bedding retailer The Linen Store (251sq m plus one car park).
The remaining income of $313,511 is from the digital billboard, car park and cell tower leases.