A highly visible, two-storey office building in Hastings with a strong tenant covenant presents buyers with the opportunity to secure a premier asset with a steady rental stream.
506 Eastbourne Street West, Hastings is a purpose-built, freehold property that was constructed in 2012 and offers 2,200sq m of floor area on a sizeable 2,806sq m site that is zoned Commercial Service Zone under the Hastings District Plan.
Government tenants the Ministry of Social Development and Oranga Tamariki are the occupants who are signed to long-term leases, providing $528,422 plus GST in total net annual rental income.
The property is currently in the process of receiving a new fit-out, including a full internal upgrade and improvements to the air-conditioning system, while also undergoing seismic strengthening to 100 per cent NBS. These upgrades will be paid for by the current owner and tenants.
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The property is centrally located with favourable proximity to the Hastings CBD and boasts one of the best car park to office ratios in the city. Further upside can be realised via the 18 additional unleased car parks, which provides room for future rental growth.
Colliers Brokers Jack Elliott and Danny Blair have been exclusively appointed to market the property for sale by deadline private treaty closing at 4pm on Thursday 12 May, unless sold prior.
The Ministry of Social Development leases the ground floor, which covers 1,266sq m, and 10 car parks on a nine-year lease, which began on 1 April.
There are three further rights of renewal for three years each and CPI reviews scheduled for April 2025 and 2028 with market reviews due in April 2031, 2034, and 2037.
Oranga Tamariki occupies the 934sq m first floor as well as 20 car parks, and they began a six-year lease on 1 April that includes three further rights of renewal for three years each. The lease includes annual CPI reviews and three-yearly market reviews.
The 18 additional on-site car parks could each be leased at approximately $25 plus GST per week based on current market estimates.
Elliott, Commercial Broker at Colliers Hawke’s Bay, says the property will be highly desirable among prospective purchasers given the strong tenant covenant.
“Government tenants are extremely appealing for buyers due to the security on offer and these specific tenants have recently begun new long-term leases with favourable terms, which is a major selling point of this outstanding property,” Elliott says.
“With the building maintenance set for completion in the second quarter of this year, this site is well-positioned as a top-tier, split-risk investment opportunity.
“This site is one of the most impressive and prominent office buildings in Hastings and is nestled among a range of high-profile commercial operators, including Silver Fern Farms, Animates, and Pak ‘n Save. There’s also a popular cafe that sits adjacent to the property.”
Blair, Director at Colliers Hawke’s Bay, says the building is strategically located and offers excellent access for those who use the on-site services.
“All of the main arterial routes in Hastings are easily reachable, while the subject site is only minutes away from the Hawke’s Bay Expressway,” Blair says.
“The potential to add value through the vacant car parks provides another layer of appeal to this property.”
- Article supplied by Colliers
