Colliers’ investment sales specialists Jonathan Lynch and Luke Baird note such properties in popular Auckland suburbs, including Ponsonby, Grafton, Mount Eden, Morningside, and Eden Terrace hold significant appeal for a wide range of prospective purchasers given the options available to them.
The Business – Mixed Use Zone is typically located around centres and along corridors served by public transport. It acts as a transition area, in terms of scale and activity, between residential areas and the Business – City Centre Zone, Business – Metropolitan Centre Zone, and Business – Town Centre Zone.
It also applies to areas where there is a need for a compatible mix of residential and employment activities offering generous future development maximum height restrictions ranging from 18m to 32.5m. The zone provides for residential activity as well as predominantly smaller scale commercial activity that does not cumulatively affect the function, role, and amenity of centres.
Lynch, Associate Director of Investment Sales at Colliers, says while interest rates have risen recently, the demand for mixed-use property remains strong.
“Mixed-use sites provide a number of add-value options for buyers and many of the properties on Auckland’s city fringe include the option to occupy and lease part of the building to another part or create an Opco/Propco arrangement, which is proving increasingly appealing,” Lynch says.
“The Opco/Propco structure (operating company/property company) is a process that separates the property asset from the trading business and offers security to buyers, resulting in more favourable lending criteria.
“The trend we are seeing in the market is continued resiliency for mixed-use properties and the ongoing external factors such as rising interest rates are not dampening demand. The opportunity to acquire a commercial asset in the dollar quantum of $2.5 million to $6 million is a major drawcard for purchasers.
“Given the shortage of high-quality office premises and workplaces, small-to-medium sized firms are looking at their options and mixed-use buildings offer vast potential for them to acquire their own space and not be bound to a tenancy agreement.”
Colliers recently sold the CBD fringe property at 19 Williamson Avenue in Grey Lynn, a partly leased live-and-work building with the owner set to occupy the vacancy, while properties of a similar ilk at 12 Liverpool Street, 33 Sale Street, and 14-16 Maidstone Street were also transacted, showing the ongoing demand.
Baird, Investment Sales Broker at Colliers, says flexibility is one of the key selling points for a mixed-use site.
“The zone does not specifically require a mix of uses on individual sites or within areas. There is a range of possible building heights depending on the context. Provisions typically enable heights up to four storeys,” Baird says.
“Greater height may be enabled in areas close to the city centre, metropolitan centres, and larger town centres. This means buyers can purchase with confidence and plan for their future accordingly.
“The location of Auckland’s city fringe is appealing given its accessibility to the CBD, alongside connectivity to the bus network and motorway, while the opening of the City Rail Link in 2024 will provide another layer of convenience for occupants.”