Press Release – Bayleys
The national head office of the Real Estate Institute of New Zealand has been placed on the market for sale. The 758 square metre building in the heart of Parnell in Auckland, sits on 1813 square metres of land.
The front portion of the approximately 1207 square metre site is zoned business 2, and contains a two-storied commercial premises. The Real Estate Institute of New Zealand occupies part of the ground floor and the entire upper level of the building, with a lease running through into 2014 and further three month rights of renewal – generating annual income of $187,342.
Part of the lower floor is leased to a trust administration company on a three year lease expiring in 2015, and generating annual rental of $59,624. The lease has a demolition clause in place.
Meanwhile, the rear portion of the landholding being marketed contains a 606 square metre area zoned residential 7B which allows for the development of three residential dwellings. A resource consent for the site was granted in 2009 and has a 10 year expiry period.
The Parnell Road property is being marketed for sale by Bayleys Real Estate through an international tender process closing on April 11, with experienced sales personnel James Chan and Cameron Melhuish handling the campaign. James Chan was runner up in the best commercial and industrial salesperson category at last year’s REINZ national awards.
Real Estate Institute of New Zealand chief executive Helen O’Sullivan said the sell down of the institute’s headquarters would allow for the funds to be re-invested as its membership begins to grow in parallel with a general recovery in the property markets nationally. REINZ has owned the site for 27 years.
“The size of the Parnell Road offices is currently surplus to our requirements, and while they presently do generate income for the institute through the subleasing of part of the premises, the proceeds from this sale could be better utilised,” Ms O’Sullivan said
“Additionally, the asset of the vacant land at rear of the property overlooking Scarborough Terrace, while gaining in capital value, delivers no real income stream for the institute. The REINZ board, whose members have front-line knowledge of where real estate markets are moving, felt that now was a good time to take advantage of a confident market in Auckland to sell the properties.
“That confidence encompasses both the retail/commercial sector and the residential sector – which encompass both aspects of the development opportunities for this parcel of land and building.
“Sale proceeds will be used to purchase new head office premises at some stage in the future in a yet-to-be decided city fringe location, as well as a commercial investment property. However, that process is someway off, and is obviously dependent on the successful sale of our current Parnell location.”
Cameron Melhuish of Bayleys said there were a number of reconfiguration options for the regularly shaped Parnell Road building and land.
“With such a prominent street frontage over one of Auckland’s premier retail and hospitality hubs, there is the potential opportunity to expand the building into a mixed use retail/commercial premises – with a new parade of shops at ground level and office space above,” he said.
“Tasteful landscaping of the street frontage around a courtyard-style layout could result in a park-like setting displaying water features and manicured grass or shrubbery – adding a new element of community appeal to the heart of the Parnell precinct.
“Alternatively, the purely commercial use of the premises could be retained as is – with scope for adding not only more floor space by expanding outward, but also adding value through rejuvenation.
“The building’s open-plan interior with high stud ceilings currently has a retro’ ‘70s-‘80s feel to it. So with refurbishment, this location could become a very modern workspace surrounded by a vast social infrastructure.
“The high profile location in the heart of Parnell along the main route between Newmarket and the CBD would also deliver exceptional naming rights and branding exposure for companies seeking consumer recognition.”
Mr Melhuish said that approximately 95 percent of Parnell’s commercial properties were rated as B, C and D grade stock. Among that was the B-grade rated REINZ building.
“Any new A-grade stock coming onto the market, such as the new Geyser Building at the city end of Parnell Road, is quickly being leased. The Geyser Building with its six-star rating through the New Zealand Green Building Council for example is now some 78 percent leased,” Mr Melhuish said.
“A refurbishment of the REINZ building to an A-grade category could easily deliver similar tenancy occupancy figures as existing businesses in the precinct look to relocate to more modern and efficient workspaces.”
Meanwhile, the rear portion of the parcel being tendered is tarsealed ‘bare-land’. The corner site has dual access potential from Denby Street and Scarborough Terrace.
Auckland Council’s consent for the residential development allows for construction of a four-storied building with basement car parking, a pair of two-storied dwellings occupying the middle levels, and a penthouse apartment occupying the top floor.
“All three dwellings will have exceptional views out across Waitemata Harbour from a ridge-line elevation. In addition the residential units would be just a proverbial ‘stone’s throw’ away from Parnell’s retail and café scene, yet far enough away from that hub to ensure there is virtually no noise from either people or motor vehicle’s movements,” Mr Melhuish said.
Parnell had already experienced the move to modernising its mixed use retail/residential core – with the construction of Nori Japanese restaurant near the bottom of the strip with a multi-storey apartment block above in the early 2000s, followed by the block of apartments built above street-level shops near the intersection of Parnell Road and St Stephens Avenue.
“As one of Auckland’s oldest suburbs, Parnell retains a considerable amount of heritage and cultural affiliation with the city’s historic roots. Consequently, and in line with the wishes of the Real Estate Institute, any new development would have to be tasteful and enhance the aesthetic attraction of the location,” Mr Melhuish added.