A four-storey freehold commercial building overlooking Auckland's Viaduct leasehold zone is being marketed for sale as having considerable rental upside when fully tenanted.
The partly tenanted 1187sq m building with 33 carparks is on an 896sq m site at 5 Nelson St and generates $120,680 a year in rent.
The property is being marketed for sale through a tender process closing on April 11, run by Lisa Nielson, Steve Orr and James Chan of Bayleys Real Estate.
Orr says the commercial building is ideal for a large-scale owner/occupier or it could be converted into a mixed-use address as outlined in the Auckland Council unitary plan.
"It is at the bottom of Nelson St less than a hundred metres from the strictly defined border which breaks up leasehold and freehold land in the central city," Orr says.
The building has holding income generated by tenants which include Treehouse, a hospitality and retail customer services training organisation which has a lease until the middle of next year; and by IT call centre company LiveOps with a lease expiring in the latter part of this year. Only 38 per cent of the building is tenanted.
The ground level of the building contains carparking, a foyer entrance, service rooms, a toilet for the disabled and shower amenities.
"Constructed in the 1990s from reinforced concrete with concrete columns and beam frames, the building has an initial evaluation procedure of 141 per cent of the new building standard with an A-plus rating," Orr says.
"Since the earthquake in Auckland earlier this month, potential buyers of commercial property have become increasingly conscious about the earthquake performance ratings of buildings being offered for sale. The high rating for 5 Nelson St has gone a considerable way to allaying much of those concerns in respect of this building.
"In its current format, the building could accommodate two superb and quite substantial apartments per floor - each with multiple carparks allocated to a specific residence.
"Establishment of large residential blocks has already been undertaken on two sides of the building, while the varied social infrastructure of the Viaduct is just a few hundred metres away."
Orr says that subject to council approval there was also the potential for additional levels on top of the existing structure - either for commercial space or apartments.
Adjoining the western perimeter of the Nelson St building is an Auckland City Council carpark enabling staff numbers, when fully tenanted, to be expanded considerably without the requirement to necessarily allocate additional on-site parking.
The building is located within Auckland's Victoria Quarter, which has undergone considerable redevelopment over the past decade, including the substantial creation of residential blocks adjoining purely commercial premises.
Orr says the property is owned by a Wellington businessman who is divesting his Auckland portfolio after owning the building for 10 years.
It has excellent transport links with access to Auckland's State Highways 1 and 16 from upper Nelson St and bus routes to the North Shore are less than 100m away.
"With substantial traffic volumes travelling daily down Nelson St, and a prominent mechanical plant structure on the roof overlooking Fanshawe St, the building has two excellent vantage points for owner/occupiers wanting highly visible signage exposure or building naming rights," says Orr.
"Alternatively, this property could have a new future.
"The Auckland unitary plan released this month was very specific in its call for an increase in the number and scale of mixed-use buildings in the central city - encapsulating existing commercial or retail use with the addition of residential dwellings in upper levels.
"The premises at 5 Nelson St is the epitome of such future developments with the upper level offering views over the western reaches of the Viaduct Basin, with glimpses further out to the Waitemata Harbour.
"The appeal for this building, being freehold, is its position close to the Viaduct Precinct which is all leasehold, with its associated additional cost of often uncontrollable ground rents."
What you'll get
On offer: Freehold four-storey commercial building
Address: 5 Nelson St, Auckland CBD
Agents: Bayleys Real Estate
Promises: Rent increase and development potential
How: Not fully rented; further levels could be added; conversion to mixed use