Three Auckland office buildings in one

A large and unique office and retail investment opportunity within Auckland’s Southern Corridor has come onto the market.

Situated on 49 Main Highway in Ellerslie, the asset consists of three interlocking buildings covering a regular shaped site area of 3,209sq m, equating to a total floor area of 5,131sq m.

The three buildings all offer unique floorplates and range from typical office fit-outs to character options and smaller office suites, mitigating risk by appealing to different occupiers with a diverse offering. The ground floor retail also offers additional on-site amenity through a café provider.

JLL Commercial Sales Broker Ian Hall says the distinction of buildings can be of great benefit to potential investors.

“In conjunction with high quality anchor tenants like ZAG, Hello Fresh, and Yellow Fox that are all leaders in their individual fields, the asset also houses smaller tenants using the suites as incubators to grow and develop with the potential to be filtered into larger spaces within the asset moving forward,” says Hall.

“There is a real community feel across the three buildings as the tenants enjoy a quality service within the high-spec space, with regular internal events and a significant amount of the leasing done by word of mouth.”

The property is best defined by three different buildings that are all interconnected.

From the front, ‘Unit A’ is located on the right side of the site. Its entry is through the foyer which includes a large stairwell providing access to the basement and ground floor parking levels, in addition to two further floors of office space with a good stud height and natural light.

The middle building, Unit I (Sawtooth) features a large foyer area and a rear ground floor unit with smaller tenancies on the first floor and the level one showroom space. The offices and suites in this area provide a character feel through the large stud height, polished wooden floors, and funky fit-outs.

Meanwhile, the final building (Annex) consists of a ground floor showroom with three additional levels of offices and decks on both ends with views over Main Highway and Ellerslie Primary School. There are 135 on-site carparks servicing the asset, with 127 of these within the two levels of secure parking space.

Hall says there is a huge add-value opportunity through greater management of the tenancies. “Subject to confirmation, the asset already brings in a net rental of approximately $1.3 million,” he says.

“There is potential to streamline the terms of the leases to create strong rental growth moving forward. Renegotiating leases due to expire over the next 24 months, creating occupier spatial growth within the asset and introducing fixed rental increases will provide more certainty around future cash flow growth.”

In terms of location, the Main Highway connects Great South Road and the Ellerslie Panmure Highway, two of Auckland’s main arterial routes. Hall says the asset is fortuitously placed between State Highway 1 access from both the Ellerslie and Greenlane roundabouts, making it easily accessible from all areas of Auckland including the Auckland Airport.

“In addition to being located in favourable Business Mixed Use zoning, the site benefits from superb public transport options including nearby bus stops and the Ellerslie Train Station which is a three minute walk away,” says Hall.

“The motorway overbridged access to the station itself also leads to the Ellerslie Town Centre with the retail strip offering restaurants, pubs, and additional amenity like Anytime Fitness, Kiwibank and Achilles General Store. Other amenities within the local vicinity include Cornwall Park, Countdown Greenlane, Ascot Hospital, and the Ellerslie Racecourse.”

The location itself is renowned as the Southern Corridor of the Auckland Office market, which is a popular precinct for both local and global occupiers due to its large floorplates, accessibility, and affordability.

According to JLL research, the Southern Corridor has maintained stable demand over 2019 with vacancy rates declining to 10 per cent due to the continued occupier interest. Meanwhile rents have stabilised with average face rentals sitting at $273 per sqm as at September 2019.

JLL is exclusively offering 49 Main Highway for sale by way of Deadline Private Treaty closing at 4pm on November 28.