One of the few remaining add-value opportunities in the Viaduct Harbour basin area is for sale, presenting an opportunity for developers keen to optimise and reposition well-located commercial stock, or owner-occupiers looking to cement a presence in the pivotal precinct.
The freestanding four-level buildings at 104 Customs Street West sit on 1,487sqm of leasehold land adjacent to the Viaduct entertainment precinct and are partially-occupied with a mix of education, hospitality and service provider tenants.
Positioned just 100-metres from the Commercial Bay precinct and the proposed Downtown Carpark redevelopment further solidifies the potential for a new owner to add-value to the buildings, which have a gross floor area of around 3,451sqm.
The original building dates back to the early 20th century and it formed part of the Auckland City Market which operated in the block bounded by Customs Street West and Market Place, where Turners and Growers consolidated its produce markets.
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High stud heights, large regular-shaped floor plates, and abundant natural light thanks to three side boundaries characterise this original building, while an additional building was developed in 2002 as part of a wider refurbishment programme.
There is basement carparking and a pedestrian bridge leads to a carparking building at the rear.
The property is 42-percent occupied across five tenancies, with a current passing gross income of $601,150 per annum. The property has an estimated fully-leased net income of $744,667 per annum, with continued commercial use.
Hospitality education provider The NZ School of Food and Wine occupies the entire top floor, levels one and two are vacant, and there are four tenancies on the ground floor.
Three of the street level tenancies are occupied by food businesses - Japanese Bistro Zen, Arbung Thai, and G&K Kebabs - with property managers Viaduct City Rentals in the remaining ground floor tenancy.
Layne Harwood and Jack Kiely, Bayleys Auckland Central are marketing the property by deadline private treaty closing 22nd August, unless sold prior.
With economic fundamentals improving, Harwood says this property provides an opportunity for proactive developers to get ahead of the curve.
"We expect to see more capital circulating for well-positioned commercial stock in Auckland as the year progresses, and with very limited acquisition options in the Viaduct Basin precinct, this property has potential for add-value commercial redevelopment or conversion possibilities.
"It's a prime location and the Business City Centre Viaduct Harbour Sub-precinct A zoning is flexible."
The large regular-shaped floor plates create versatility for a range of occupiers including extended education, commercial office, retail and hospitality or for conversion to a hotel, backpacker facility or residential apartment accommodation.
As the property is leasehold, Harwood says acquisition at a lower initial capital outlay coupled with holding income until 2029 and potential to terminate smaller leases earlier if required, will give a new owner runway for planning, design and consent processes.
"There's identified potential to upgrade the older building to maximise the significant internal stud height and natural light, and to upgrade the ground floor retail spaces and fa ade to reposition the building in the market," he says.
"Upper levels of buildings like this have traditionally appealed to the creative sectors like tech , advertising, design or architectural practices and some really compelling space could be created on the currently-vacant first and second floors."
Alternatively, with Eke Panuku Development Auckland entering into an agreement with Precinct Properties for the redevelopment of the Downtown Carpark into a mixed-use precinct, Harwood says a case could be made for creating a multi-level carpark building on the subject Customs Street West site.
"The Precinct Properties-led regeneration of the Downtown Carpark will result in the loss of some 1,900 carparks once that project commences circa-2026.
"This creates an opportunity for a new owner of 104 Customs Street West to fill a void by creating a public carparking facility that would be the closes such amenity to Commercial Bay and the Downton Ferry Terminal."
- Supplied by Bayleys
