A high-profile office building in the heart of Manukau will appeal to buyers of all kinds looking for a well-located asset with substantial add-value potential through refurbishment or redevelopment supported by flexible zoning in a low-vacancy market.
4 Osterley Way, Manukau is a six-level office tower with 3,780sq m of net lettable area on a 1,560sq m freehold site near the western edge of Westfield Manukau City.
The property is zoned Business – Metropolitan Centre Zone under the Auckland Unitary Plan. This designation applies to centres located in different subregional catchments of Auckland.
These centres are second only to the city centre in overall scale and intensity and act as focal points for community interaction, and commercial growth and development, and contain hubs serving high-frequency transport. In the case of Manukau, substantial infrastructure improvements have already taken place in the central city area, particularly around transport and connectivity.
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The property is tenanted by the current owner, Auckland Council, who will enter into a short-term leaseback agreement until no later than 31 December 2023 and no earlier than June 2023 subject to 12 months’ notice, at which time the tenant will relocate to new premises currently being developed nearby.
The building is being sold via Eke Panuku, which is the council’s development and property arm, and the lease provides approximately $1,037,950 in net annual rental income.
Colliers directors Jason Seymour and Alan McMahon have been exclusively appointed to market the property for sale by deadline private treaty closing at 4pm on Thursday 17 March, unless sold prior.
The property is currently known as Kotuku House and was constructed in the 1980s as a corporate office building and underwent refurbishments in 2016-2017 to a predominantly open plan layout as a service centre for Auckland Council.
The ground floor office spans 635sq m, while the offices on Levels 1 to 4 measure between 785sq m to 787sq m. The basement area is used for storage and car parking.
Seymour, director of capital markets at Colliers, says Manukau’s favourable proximity to transport links underpin a strong employment base and growing local economy.
“The transformation of Manukau is a top priority for Eke Panuku, which has invested heavily in planning and development over the past five years,” Seymour says.
“Destination parks and reserves around the Puhinui catchment are receiving multi-million-dollar upgrades, there’s a brand-new bus depot and underground train station that has opened up, universities are expanding their footprint, and the airport is just around the corner.”
Seymour says the Business – Metropolitan Centre Zone will provide the new owner with the option to create a major development.
“The zone provides for a wide range of activities, including commercial, leisure, high-density residential, tourism, cultural, community and civic services.
“This makes this a highly desirable purchasing opportunity for prospective buyers to benefit from the strong holding income on offer from the existing tenant while they plan their next moves for the property.
“The current building occupies a 910sq m site but to be included in the offering is a further 650sq m in front of the building facing Manukau Plaza that will provide substantial scope for further development, subject to essential outcomes defined by Eke Panuku.”
McMahon, national director of strategic advisory at Colliers, says the office leasing market across Auckland has remained robust despite the challenges posed by Covid-19.
“While various lockdowns in the second half of 2021 in Auckland, Waikato, and Northland have applied pressure to trading conditions and business activity, we have witnessed a remarkably confident performance from investors, owner-occupiers, and developers,” McMahon says.
“A staff-centric approach employed in 2021’s tight labour market environment, and a view to a more positive future have delivered a strong focus on quality offices as well as remote working flexibility.
“While short-term disruptions can be expected during the next phase of business operations and the transition to living with Covid-19, there is increasing evidence of a positive return to the office when restrictions ease. The development pipeline is rising across major markets to alleviate the shortage in quality space, which alongside rising inflation, will likely see new benchmark rents achieved.
“The Manukau office market has had a notoriously low vacancy rate for many years, with virtually no options for public and private sector tenants seeking larger, high-quality premises. The fact that 4 Osterley Way will be fully vacant in mid-to-late 2023 presents a unique opportunity to fully reposition and potentially expand an already substantial building into a major new Manukau landmark and at the same time catalyse the activation of the adjacent Manukau Plaza.”
- Article supplied by Colliers
