High-profile commercial buildings make a mark on buyers

Media Release

High-profile commercial buildings make a mark on buyers

One of Rotorua’s largest commercial buildings - incorporating retail shops, office suites and a residential apartment has been placed on the market for sale.

The prominent 10-storey, inner-city building located at 1131-1145 Arawa Street, is leased to a number of tenants including Government departments the IRD, Internal Affairs and the Ministry of Business, Innovation and Employment, formerly the Department of Labour.

The building is being marketed for sale by Bayleys through Auckland salespeople Nigel McNeill and John Algie, and Bayleys Rotorua salesperson Mark Rendell.

It is one of two high-profile commercial buildings in the city being marketed for sale by Bayleys. The second is the commercial building at 1138-1142 Fenton Street.

Strategically located, the Arawa Street building is within Rotorua’s office precinct. Ground floor usage includes a variety of service, commercial and retailing purposes largely focused on the needs of office workers.

An engineer’s report has assessed the building as having a satisfactory seismic rating of 79 percent, to new building standards.

Mr McNeill said the building offered an exciting investment to a potential new owner, with the opportunity to add value.

“This is an investment with real potential for entrepreneurs, developers and/or owner/occupiers. One option might be converting the building into residential apartments or a hotel,” he said.

“The building has an existing cashflow, with a variety of tenants and lease terms. It also has excellent floor plate designs, which could be easily configured to suit any tenant requirements,” he said.

The gross rentable area, excluding car parks, is 6894sqm, with 5511sqm of this occupied.

Completed in 1988, the multi-storey building incorporates a ground floor and nine tower floors, 13 off-street car parks at ground level and ramped access to another 35 car parks on level one. The nine tower levels are serviced by three 900kg or 13-person capacity lifts.

Mr Rendell said key features inside the building are a high ceiling entrance, marble wall and floor, and decorative marble columns, viewable from the street by the public.

“The building has been designed to obtain maximum space efficiency by the use of a central core of essential services – lifts, toilets, service ducts, boiler vents, and electrical and plumbing systems,” he said.

In April this year level eight was partially converted into a residential apartment for the owner. The north side of the premises was developed into an open plan living space. To the east and west wings, a bathroom with a combined shower/bath, laundry tub, toilet and hand basin, and three bedrooms have been built. The south side of the floor is largely undeveloped.

Total gross rent for the building is $831,821 (+GST), with a net rent of $549,695pa (+GST) and weighted average lease term of 1.52 years. The building has a rating valuation of $7,010,000, made up of land value, $650,000 and improvements value, $6,360,000.

The building is being sold freehold under two titles of 913sqm and 736sqm. Tenders close on July 25. It will not be sold prior to this date.

The other well-known freehold building in Fenton Street houses one tenant and includes vacant space, providing scope for developing its potential and adding value.

Bayleys Rotorua salesperson Mark Rendell said the position and attributes of the property offered a great investment to a potential new owner.

“The corner location on a main, central street provides high exposure for substantial office or retail operation of 1120sqm over two levels. It’s across the road from the Rotorua Convention Centre, Rotorua District Council and Tourism Rotorua. It also has 10 onsite car parks for staff and customers - another significant advantage,” he said.

“This area is a gateway to the Rotorua Government gardens and is on the fringe central business district of the city. It has a high volume of foot and vehicle traffic and a great road profile.”

As one of the main tourist destinations in New Zealand, Rotorua is an active business hub, serviced by a busy domestic and trans-Tasman airport.

The main existing tenant, Radio Network Ltd, occupies 32 percent of the building, leaving 700sqm vacant over two levels, providing a new premises opportunity for a potential owner occupier. As it is partly tenanted, it also offers a holding income to a new owner, while new tenants are sought, said Mr Rendell.

The Radio Network Ltd leases the building for a net rental of $68,454 (plus GST), with a final lease expiry in December 2014.

The building has a floor area of 1120sqm. Under the Rotorua District Council operative plan, it falls within Commercial B zoning - an area designed to function as an addition to the city’s central retail area.

ENDS

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