With the Wynyard Quarter proving to be the preferred location for Auckland's corporate occupiers, and with ownership almost completely in the hands of institutional entities, one of the city’s premier trophy character assets in the precinct is set to captivate investors’ attention.
Meticulously refurbished in 2015, the John Lysaght Building on the corner of Pakenham Street West and Halsey Street was built in the 1920s and derives its name from the original tenant, the John Lysaght Steel Company.
The John Lysaght Building’s rich history has been home to a range of industrial and marine occupiers including Italian America’s Cup challenger Luna Rossa during the 30th America’s Cup campaign in 2000.
Located at 101 Pakenham Street West, the building was one of the first completed redevelopments in Wynyard Quarter by Eke Panuku, the Auckland Council’s regeneration agency.
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It has been held in public ownership under the management of Eke Panuku since its refurbishment.
Award-winning architects Warren and Mahoney successfully retained the building’s rich industrial heritage by keeping many of the original features and empathetically melding new elements into the building.
Today the building is fully-leased to Tutaki Auckland Unlimited who operate GridAKL from the building, providing office accommodation for around 60 start-up businesses and 200 personnel as part of a collaborative innovation community.
Agents marketing the building describe the property as a once-in-a-generation opportunity, with the asset understood to be the only office building in the Wynyard Quarter to be offered to the open market for sale.
Brad Ross and Cameron Melhuish of Bayleys Auckland Central are brokering the sale of the John Lysaght Building, with tenders closing 4pm, Thursday 21 July. The property will not be sold prior to this.
Very much part of the Wynyard Quarter’s architectural fabric, Ross says the John Lysaght Building is a standalone asset with a revered value proposition and he expects it will have traction with a diverse buyer audience including private investors, intergenerational trusts, and local and offshore institutional entities.
“The character building serves as a reminder to the precinct’s earlier life, yet has been sensitively reworked to offer quality, innovative office space within Auckland’s most vibrant and fastest-growing commercial and residential precinct.”
With a net lettable area of 1,816sqm, the fully-leased building returns an annual net income of $714,982 plus GST and outgoings with a strong 7.5 year weighted average lease term.
Melhuish says the asset offers significant rental reversion opportunities down the line.
“The demand for office space in the Wynyard Quarter is unrelenting and the precinct offers the best underlying office market fundamentals of any office location in Auckland’s CBD,” he says.
“Occupiers recognise the intrinsic locational credentials and the high level of amenity as being fundamental to staff retention and attraction.
“Additionally, the prepaid 125-year leasehold structure means the building does not attract leasehold outgoings, so with no exposure to ground rent reviews and increases, it effectively makes the offering a freehold proposition on paper.”
When refurbished, the building’s southern and eastern facades were retained, together with original jarrah columns, central beams and roof structure as attractive character features, including exposed interior masonry.
The northern facade was ‘opened’ up and fully glazed, with a decorative offset screen, intended for managing solar gain and amenity.
The ground floor consists of open plan offices, function and training rooms, and a café including a kitchen and seating area.
Facilities offered include male, female and accessible amenities, comprehensive end-of-trip facilities, lift access, and a recycling room.
The upper level is predominately open plan offices with similar facilities offered, with this level benefitting from extensive glazing providing optimal natural light.
Additional sustainable design features include the promotion of natural ventilation, energy monitoring, stormwater detention with the building attaining a 4.5 Star NABERSNZ rating and targeting a Green Star rating.
The redevelopment also included structural strengthening to Grade A of the Building Code.
Ross says the Wynyard Quarter has just 1.20 percent office vacancy with circa 99,362sqm of net absorption since 2011, and accounts for around 60 percent of the Auckland CBD’s increased office stock during this time.
“The roll call of occupiers reads like a ‘Who’s Who’ of business featuring five Fortune 100 tenants, and six NZX or ASX-listed tenants.
“Likewise the owners’ database includes local institutional entities like Precinct Properties and Kiwi Property with offshore interests including Blackstone, GIC and PAG.”
In the immediate area close to the John Lysaght Building, Precinct Properties is proposing to develop a new office block incorporating ground floor retail across two adjoining sites at 117 Pakenham Street West and 124 Halsey Street.
This adjacent development is strong on connectivity through new laneways and public spaces, while Mansons plans to develop offices on a large site on Beaumont Street.
Wynyard Quarter’s revitalisation and regeneration is creating unprecedented nearby development activity. Once completed Wynyard will be home to 3,000 residents and 25,000 workers.
- Article supplied by Bayleys
