The site has resource consent for an 8,251sqm building up to 21m in height, with 114 car parks.
Hargreaves says the land is in an area of Auckland that’s right for intensification.
“It’s in the middle of Auckland’s key infrastructure so access to the motorway couldn’t be better. The City Rail Link will bring new stations at Karangahape Rd and Aotea Square, making this property even more accessible,” Hargreaves says.
The corner site is metres away from Auckland Hospital, handy to the Domain and a short walk from Auckland’s universities. It was once home to a motel and more recently was slated for student accommodation, but the current owners’ plans have changed.
The land is zoned for Mixed Use, which provides for residential activity as well as smaller scale commercial activity. The zone is typically located around centres and along high frequency public transport routes. It applies to areas where there is a need for a compatible mix of residential and employment activities.
“Now the question is whether 121 Grafton Rd is best for apartments, a hotel, student accommodation or a mixed-use office development. We’re looking forward to the market telling us what the best option is through the expressions of interest process,” Hutt says.
Projections forecast a growth of 48,340 people in the usually resident population of Auckland’s City Centre between 2013 and 2043, representing massive growth of 146 percent.
The positive effect of the general residential property market continues to flow into Auckland City Centre’s apartment market. Historically apartment prices have remained consistent and have fluctuated between $200,000 and $300,000 since the early 90s. However, since 2013, apartment prices have seen a dramatic increase and as at 2015, Auckland City Centre apartment sale prices have broken the NZD 400,000 mark.
Demand for office space in Auckland’s City Centre has driven tenants into the city fringe and suburban markets. This has raised rents and firmed yields across Auckland.
Meanwhile Auckland’s hotel accommodation market has continued to perform robustly with a solid increase in occupancy levels and in particular a strong increase in the Average Daily Rate during 2015. The hotel market has been experiencing positive growth since 2010 (as measured by revenue per available room) and in particular the pace of growth has been very strong in 2013 through to year end 2015.
In terms of student accommodation, there is currently a reasonably significant supply of off-campus accommodation in the city centre. However, much of this is of a modest quality, or provides limited services for students. Many students have therefore chosen residential apartments or serviced apartments. It appears there is a gap in the supply of good quality purpose-built student accommodation that is professionally managed.
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