Chance to set up shop in Wynyard Quarter

The Wynyard Quarter precinct continues to evolve as Auckland’s most sought-after waterfront neighbourhood.

New initiatives to extend public spaces in the area have been confirmed, and there are several significant commercial and residential developments already underway or in advanced planning stages.

The master-planned precinct has remained largely inaccessible to private commercial investors given the institutional and listed entity ownership stronghold.

But well-capitalised private buyers have the chance to secure a presence via the sell-down of seven fully-leased retail units in Willis Bond’s high-profile 30 Madden mixed-use complex.

The proactive property development and investment company is divesting the 7-unit retail component on the ground floor below its sold-out multi-level 150-residential apartment block which fronts Madden and Daldy Streets and the Tīramarama Way laneway.

This is the first stage of its retail footprint in this block, with a further five units located on the opposite side, within the second stage.

Three of these are currently being leased.

There is a total 493.5sqm of lettable space with a range of high-quality retail and service provider occupants.

Well-established tenants on the site are global cafe chain The Coffee Club, beauty therapists Caci Clinic, bridal boutique Paperswan Bride, mens’ barber BarberShop Co, beauty business Aura Beauty, and boutique hairdressers Luxe & Duke.

The offering returns annual net income of $341,003, plus GST and outgoings, with a weighted average lease term of 4.97 years across the offering from 1 August 2024, and there is a vendor underwrite on circa-96sqm vacant space for three years.

The existing leases include a mix of CPI, fixed and market rent reviews and with the exception of the vendor underwritten unit, have renewals to be exercised. The majority of the leases have bank guarantees.

The prepaid leasehold structure – which is widely-applicable to properties within Wynyard Quarter – means the building does not attract leasehold outgoings, and accordingly there is no exposure to ground rent reviews and increases.

The ground rent has been paid up-front for a period of 120-plus years, so on paper this offering is effectively freehold.

Cameron Melhuish and James Were, Bayleys Auckland Central are marketing the seven units as one lot by tender closing 24th September, unless sold prior.

Melhuish says Willis Bond put the units up for sale two years ago, but given restrained investment market fundamentals and the subdued post-pandemic inner city office market at the time, a deal was not struck.

“However, the real estate cycle is clicking back into gear with far more activity on the commercial property sales’ front now, and far more hustle and bustle in the Wynyard Quarter precinct with the return of office workers.

“The tenants at 30 Madden have traded well from the location through some pretty challenging economic times providing convenience and continuity for customers.

"The apartment residences above the retail units provide a readymade clientele base bolstered by an active neighbourhood workforce that provides high volumes of passing foot traffic.”

The recent OCR announcement and subsequent trimming of interest rates bodes well for commercial real estate investors, says Melhuish.

“Commercial property yields and the capital appreciation benefits of bricks and mortar are looking super attractive now – especially to those with money on term deposit.

“There’s around $130 billion sitting on term deposit in banks currently, but term deposit rates will start to trend downwards fairly quickly so there will be raft of people looking elsewhere for a better return on investment.”

When fully-developed, Wynyard Quarter is expected to be home to more than 3,000 residents and 25,000 workers, and regeneration of the formerly-industrial/marine focused locale continues.

The council’s development agency Eke Panuku Development Auckland is currently seeking public feedback on its proposed Te Ara Tukutuku project on land at the northern end of Wynyard Quarter, creating the largest new open space in the city centre in 100 years.

Also coming onstream in the wider precinct is Winton’s masterplanned Cracker Bay mixed-use project and its Northbrook retirement development, Mansons’ 30 Daldy office development, and Precinct Properties’ Wynyard Quayside campus-style office development in Halsey and Pakenham Streets.

Melhuish says news that telco One New Zealand will join other tech’ companies like Datacom, Microsoft, Medtech Global and incubator GridAKL in Wynyard Quarter next year, migrating across the harbour bridge from its current base at Smales Farm in Takapuna, is indicative of the precinct’s pulling power.

“That’s just one example of a business looking to position themselves among the action, in a location with a multitude of business and leisure advantages,” he says.

“The Wynyard Quarter area will also hum more over summer with the recent announcement that the SailGP event will hold its first ever leg in Auckland in January.

“Passive investors such as family trusts and high net wealth individuals will recognise the intrinsic long-run advantages that this Wynyard Quarter investment opportunity offers, and look to rub shoulders with the movers and shakers of the country’s property and business community.”

- Supplied by Bayleys