Top class tenant mix and build quality at 8 Nugent
Top class tenant mix and build quality at 8 Nugent
13 June 2015
Auckland, 13 June 2015 - A significant, fully-tenanted Green Star-rated commercial building in a new master-planned mixed-use precinct in Auckland’s city fringe is expected to be keenly sought after among investors.
The building is part of a campus-style development which also includes an apartment complex, a purpose built car parking building and a further office and showroom building due to be constructed.
“This is an outstanding investment opportunity, comprising a well-located A-grade building and a diversified income stream backed by a range of strong names including Pfizer, Mobil Oil and NZ Cricket,” says Warren Hutt.
“The building is constructed to a very high standard and presents extremely well. It is 100% leased to 11 high-quality and well-known tenants, who were attracted to the building because of its big, efficient floor plates and a car parking ratio which is almost unheard of in this part of the city fringe.”
The current rental levels offer good future upside potential, Ogg says.
“Space in the building was leased at competitive rates, and all the tenants are well-established here. The property is therefore a very good long-term growth prospect.”
The annual net income of $2,973,961pa plus GST contains excellent diversity, split between a range of international and local corporate tenants with a very good weighted average lease term of five years, says Ogg. “This property’s combination of high-end occupier mix and outstanding build quality means this is a reduced risk and low maintenance investment holding.”
These factors, along with the ‘up and coming’ characteristics of the property’s location, mean the building is likely to represent exceptional value for the buyer, Harwood says.
“Compared with some of the recent transactions we’ve seen of newer stock on the city fringe, this building will be very good buying for a long-term investor.”
The relative lack of high-quality office investment opportunities on the market in central Auckland is also expected to contribute to strong demand for this property, says Harwood.
Developed by one of Auckland’s oldest and most respected property developers, The Neil Group, Building B was completed in 2009. It contains five levels of modern, naturally-lit office and showroom space. It has three metre high-stud interiors and flexible, easily-divisible floor plates, with 7623sqm of total net lettable area. Building B is on its own freehold title and the sale includes 244 carparks.
It has an A+ seismic strength rating (100% of New Building Standard), excellent-quality fit outs and various sustainable features which have contributed to its Four Green Star Design rating from the Green Building Council, Hutt says.
“The building includes several state of the art sustainable design features; including orientation and glazing to capture natural light, reinforced concrete contributing to thermal mass, 50% more fresh air than required by the building code, efficient lighting, recycling and bike racks with associated shower and change facilities.”
The building is managed by the owner, The Neil Group, ensuring ongoing quality and a number of the tenants have also invested significantly in their own high quality fit outs, says Hutt.
The BodyTech gym occupies the entire ground floor, with other tenants Aesthetics Lighting, Pfizer NZ, Woods, Te Pou, Mobil Oil NZ, NZ Cricket, The Neil Group, Digital Island, Bankstream and Alexander & Co occupying the upper levels.
Ogg says the tenants all provide strong covenants. “The quality and variety of tenants here is second to none. Global giants Pfizer and Mobil Oil need little introduction. Woods is a leading multi-disciplinary professional services consultancy founded more than 40 years ago. Aesthetics part of Gerard Lighting, which is the largest lighting group in Australasia with over 1,400 staff and Digital Island is a progressive Kiwi telecommunications provider and a Deloitte Fast 50 award winner. Then there is The Neil Group, the building’s owner and developer, which has been in the property and land development business for more than 50 years.”
The Green Star-rated sustainable building is part of a new mixed-use development containing retail, apartments, office premises and car parking surrounding a central plaza, known generally as 8 Nugent.
“The owner has successfully provided an attractive precinct that has proven popular among occupiers,” says Harwood. “The on-site amenity is fantastic – there is a cafe, open space, 602 car parks and the excellent BodyTech Supervised Fitness Gym, which includes a pool.”
The 8 Nugent campus sits on a mixed use site, which on completion, will feature five buildings providing a complete and well thought-out mixed-use environment, says Hutt.
“Already on site is an apartment building with convenience retail and a car parking building, along with Building B which is now being offered for sale.”
The development offers a combination of offices, showrooms, café, residential apartments, services and a gym all within the attractively landscaped plaza, Ogg says.
“The 8 Nugent campus has all the ingredients of a very well-connected urban environment, which is why there has been such strong interest in both the office development and apartments there.”
The surrounding area offers further complementary services and amenities, says Harwood. “There is plenty of shopping and entertainment in nearby Newmarket, as well as numerous establishments within a short 500 metre walk of the site including pubs, cafés, restaurants, childcare and medical facilities including Auckland Hospital.”
Bus and rail transport options are also located within easy walking distance of the property.
The location just off Khyber Pass Rd, on the border of Grafton, Newmarket and Mt Eden, is part of a wider city fringe locality which is receiving increased focus, Hutt says.
“This area is on the upswing, with many local owners committing significant capital to upgrade their buildings. A notable example in the immediate vicinity of 8 Nugent is the refurbished Orion building on the corner of Khyber Pass and Grafton Rd, where further development and extension is also planned, together with the impressive Argosy-owned Studio Italia opposite.”
With on-ramps to the Southern, Northern and North-Western motorways in close proximity offering quick transport links in all directions, the location can be considered strategic for owners and tenants, Ogg says.
“Occupiers like this part of the city because of its easy access and lower occupancy costs when compared with the CBD. The combination of the development’s location and its highly-specified build is expected to underpin tenant retention and investment value into the future.”
Some large-scale developments are further increasing the appeal of the surrounding location, Hutt says.
“Auckland University’s redevelopment of the former Lion Brewery site and the proposed City Rail Link are two key projects which are pointing the spotlight on the Newmarket/Mt Eden area as a future centre of mixed-use development. This is already filtering through into the property market, with sites offering future development potential in constant demand by developers and land bankers.”
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