Auckland, 9 May 2015 - Two adjoining office buildings with three tenants in occupation on a corner site in Penrose, Auckland, available for sale offering strong potential for both investors and owner occupiers.
12-14 Walls Rd and 42 Olive Rd, in the centre of the Penrose commercial precinct, are being marketed by Jonathan Ogg and David Arlidge of CBRE. The buildings are for sale by deadline private treaty closing on May 21, unless they are sold beforehand.
“These buildings have performed well in the past as a cash flow workhorse, providing a very good return for the owner” says Ogg. “There is real upside to add value in the future, these buildings are an excellent proposition for investors and owner occupiers.
“For buyers looking for accessibly-priced assets to add to their portfolios at a time of increasing demand for commercial property in central Auckland, these buildings offer compelling investment fundamentals.
“They would also suit an owner occupier requiring a centrally-located office base in Penrose, with the benefit of collecting income from the existing tenants. A further draw card will be the individual buildings’ strata titles, providing the flexibility of an opportunity to on-sell or one of the buildings in the future,” he says.
The buildings were constructed in 1986 and offer well presented, flexible office space, says Arlidge.
“Both buildings offer functional office space and an A+ seismic rating.”
42 Olive Rd is a two-level building containing 1089sqm of net lettable space, while next door, 12-14 Walls Rd offers 1664sqm of space across three levels. Both have great onsite parking with 75 open-air off-street car parks and 11 covered parking spaces giving a total of 86 car parks
Three tenants are in occupation at 12-14 Walls Road, including a government entity, Te Puni Kokiri (the Ministry of Maori Development), vehicle finance and sales specialist Aqua Cars Ltd and technology firm Blackhawk Tracking Systems Ltd.
Current net passing income amounts to $226,770 at 12 -14 Walls, with the potential to increase the property’s income stream through leasing vacant areas of the buildings. 42 Olive Road is currently vacant, but is complete with existing fit out, workstations and furniture, says Arlidge.
“This offers immediate potential for new tenants to move in and begin operating with everything in place ready to go at an economic occupancy cost .
“With a lease in place to the Crown, along with two other strong tenants and the potential to increase and enhance the occupier mix, this property offers a compelling proposition for investors to add value.”
A savvy investor also has a great opportunity to get a very favorable “yield gap” on this property. The difference between their potential yield return and the rate they are borrowing from the bank could be quite significant.
The large 4150sqm freehold site sits on a prominent corner offering excellent signage exposure, says Ogg. “This corner site gives a great profile to both Walls Rd and Olive Rd, as well as proximity to the motorway and the Penrose train station.”
The buildings also offer excellent access to local arterial routes, with the intersection of Station Road and Great South Road just 200 metres away, Ogg says.
“Access to the greater Auckland roading network is extremely good with the Ellerslie-Panmure and South Eastern Highway links being close to the site.”
Arlidge says the tenants benefit from an accessible location 10 minutes’ drive from the Auckland central business district during off-peak hours, with functional office space in a location characterised by considerably cheaper rentals than central-city rates.
“This is an ideal part of town for many office-based businesses and a strong alternative to the CBD. There are many businesses which can benefit from a suburban location, especially service-oriented companies which can realise efficiency gains from being positioned close to their customers in business parks and industrial areas,” he says.
Penrose also has the benefit of being roughly mid-way between Auckland CBD and Auckland Airport, says Ogg. “The suburb has long been considered an excellent business location given its central location and road access, and it continues to be a fantastic home base for many of New Zealand’s most well-known and established companies.”
The location has been further enhanced in recent years by improved staff amenities such as cafes, Sylvia Park shopping centre and improved public transport Ogg says.
View the NZ Herald article here
About CBRE
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.