One of the first commercial properties to come up for sale in Parnell’s St Georges Bay Road for some years is the recently refurbished, fully leased character property on the corners of Faraday Street, St Georges Bay Road and Cleveland Road.
The 2585sq m dual corner site has 148m of street frontage and houses a number of upmarket tenants such as designer kitchenware supplier, Archant, office furniture designer and manufacturer Aspect Furniture and the privately owned, top-end pet care facility Central Bark.
Marketing agent Henry Thompson of Whillans Realty Group says the two adjoining character buildings were fastidiously refurbished in 2017 by Krukziener Properties, and the largely retail showroom and office property is now fully tenanted and returning a net annual rental income of $1.9 million. The property generates an additional $115,000 in management fees.
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Thompson says property in Parnell’s commercial area is tightly held by family property trusts and high net worth investors, and this is the first to become available for some time. These investors typically take a long-term and even a generational view to investment.
“There’ve been only two standalone commercial buildings on St Georges Bay Road that have sold in the last six years.”
And while it is currently an excellent investment property, by August next year when Auckland City Council is required by central Government to adopt new intensity rules set out in the National Policy Statement on Urban Development, the site may become even more valuable.
“Under the current unitary plan you can build up to 21m (six levels), but this may increase further when the council releases changes to the Unitary Plan. Parnell is one of those areas, close to both the CBD and transport hubs.”
Thompson adds that the property is exceptionally well-located long term for luxury apartments and new premium grade office space being located in Auckland’s double Grammar zone where residential prices achieve premiums anywhere between 10-25 per cent above similar properties that are out-of-zone. It is currently zoned mixed use (allowing the 21m height limit) and has 18 secure parking spaces on-site.
Meanwhile it offers investors exposure to a mix of premium tenants, with around 73 per cent of the income derived from the showroom and retail tenants. Thompson adds that nearly all of the leases have structured rental growth and the property has a weighted average lease term to expiry of 3.5 years.
No single tenant accounts for more than 22 per cent of the total income stream, and the largest tenant has over 5.5 years to run on their current term.
Future development potential has been built in, with vacant possession available from 2027. This is made possible by the length of the leases and landlord termination clauses, Thompson adds.
He says that the area has even more appeal these days with Parnell having central Auckland’s lowest office vacancy rate, currently standing at just 5 per cent.
The older of the two buildings fronting 109-115 St Georges Bay Road, and on the corner of Faraday Street, was refurbished into nine office suites and nine ground floor retail units. It was originally built in the 1930s and operated as a paper store and packaging business.
Each retail unit has fully glazed frontages, polished concrete floors and high-stud ceilings. Office suites feature large windows, timber flooring, exposed brickwork and timber beam ceilings with each suite having its own air-conditioning unit, abundant natural light and a soaring stud height. A new lift was installed to provide access between floors. There are also two luxury kitchens and two boardrooms for shared use.
The second building at 99-107 St Georges Bay Road on the corner of Cleveland Road was originally developed in the 1950’s and has been converted into showroom space.
Each showroom unit features polished concrete or oak flooring, exposed steel trusses, extensive glazing, separate washrooms and incremental air-conditioning units.
Three of the showroom units are double-stud height and have mezzanine office areas. The largest unit, occupied by Central Bark, is positioned above the ground level car park area and all have internal access to the carpark.
Thompson says that investment credentials aside, the property remains a rarity in the Auckland market where character buildings are a diminishing commodity.
“The opportunity to secure freehold standalone character buildings of this quality and in this location in Parnell are becoming harder and harder to secure, as they are in the rest of the city. St Georges Bay Road is prized for its mix of character and modern architecture, leafy streetscape and vibrant café scene.”
- Article supplied by Whillans Realty Group
