The fully-leased Pukaki Centre office complex on the northern edge of Rotorua's central business district is for sale, creating an opportunity for a passive investor to secure a high-profile, well-performing property in a strategic location.
Positioned within a popular professional city office enclave close to the lakefront and the city’s main dining precinct Eat Streat, the five-level office complex was developed in the late 1980s.
It has undergone extensive upgrades and renovations and has a 73 per cent new building standard seismic rating.
The rectangular, flat 1711sq m site is held in two adjoining titles. The freehold property has a gross building area of 4974sq m with 3663sq m lettable, and returns an annual net income of $494,691 plus GST and outgoings, with the seven tenants on varying lease terms providing a spread of risk.
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There is on-site parking for 41 vehicles, with 11 of these being under cover on level one of the building and the majority of the others located on the western side of the property in a secure yard.
Its tenant covenant is underpinned by Crown occupiers with the Ministry of Education leasing space across three levels, and Lakes District Health Board occupying the entire second level and a portion of the ground floor. The balance of the building is occupied by a mix of tenants including two legal firms.
The Pukaki Centre at 1144 Pukaki Street is being marketed for sale by negotiation through Mark Slade and Brei King, Bayleys Rotorua, and Brendan Bradley, Bayleys Tauranga.
Slade said the property is one of the largest office developments in Rotorua, and has a strong leasing track record with historically-better occupancy than other office buildings in the CBD.
“This is a sought-after building with recognised locational credentials and good parking ratios,” he explained.
“The strong Crown tenant presence reflects this and, given that the building has a northerly aspect with good views of Lake Rotorua from its upper levels, it has wide appeal for tenants, and the credentials stand it in good stead for the future.”
Slade said the building is currently fully managed by Bayleys, making it an ideal hands-off investment option.
“This management structure could continue under new ownership and would ensure continuity for existing tenants and provide confidence for future occupants should the purchaser wish to engage Bayleys to manage the property,” he said.
The property is zoned Centre City 1 (mid-city), a favourable inner city classification that permits a broad range of uses including hospitality and accommodation.
The site has dual entry from Pukaki Street and a rear service lane, and the building is positioned between Rotorua’s main retail strip, Tutanekai Street, and Fenton Street providing easy vehicle accessibility.
Slade said the commercial property market in Rotorua has remained strong despite the pandemic disruptors, and the Pukaki Centre has retained its occupancy throughout the last 18 months of global uncertainty.
“This is largely due to the solid and proven history of the building and its fit-for-purpose credentials.
“There is also no new-build office stock planned for Rotorua’s CBD in the immediate future so quality space is valued by occupiers and the sound parking ratios of this building further elevate it in the market.
“Rotorua Lakes District Council is currently considering CBD sites for more intensive residential living and this could potentially encroach on existing public parking facilities, so on-site workplace parking takes on heightened value.”
Slade said Rotorua is in good heart despite closed borders shutting out its usual overseas tourists, and the city’s commercial and industrial property is attracting investment from entities and individuals from outside the region.
“The domestic tourism market appears to be propping up the broader commercial sector well, with New Zealanders making nostalgic visits back to Rotorua and re-exploring their own backyard.”
The Pukaki Centre is owned by a private investor and Bayleys previously sold the building in 2015.
-Article supplied by Bayleys
