Developer’s riddle at Grey Lynn

Barfoot & Thompson agent Chris Peterson, who is selling the property with colleague Paul Groom, expects the outcome to interest those tracking Auckland’s hot commercial property market.

"There’s a scarcity of commercial property in our best suburbs, versus a huge demand for it and this one really highlights that dichotomy," he says.

"Here is a block of shops at 596-602 Great North Road in Grey Lynn, a property in a near-perfect location in one of Auckland’s most sought-after suburbs. Four retail units in Grey Lynn, three of them with first-floor living accommodation above, would normally be a mouth-watering prospect for an investor. And in this case, there’s also a freehold title, a considerable building area of about 357sq m and a roomy site of more than 488sq m.

"What’s more, there are parking spaces for up to four cars at the rear; and the property is being sold with vacant possession situated within the useful Business-Local Centre Zone. The rating valuation, as at July 2014, was $1,810,000."

But, says Peterson, there can also be no disguising the challenges the property presents.

Future development potential

"Regarding future development potential, these shops are in Special Character Zone, which could make total demolition difficult but there are other options to achieve the height limit of 13 metres. And though it’s still possible to rent space out to tenants here, at present the building has an earthquake rating which meets just 15 per cent of the New Building Standard (NBS).

"To be fair, however, none of this totally precludes development. For example, it might be possible to preserve heritage values at the front of the site, while using space at the rear for apartments.

"But we are real estate agents, and as such we cannot anticipate future suitability of architectural designs; calculations of engineers; or requirements of regulators who assess building or resource consent applications.

"Of course, I could say that the pressure is on Auckland Council to say 'yes', and where there’s a will there’s usually a way. But all that is easy for me, as I’m not the one putting up the money to find the commercially viable solution that complies with all planning regulations.

An opportunity

"The likely buyer will be somebody with the vision to see an opportunity, perhaps where others do not," Peterson says. "They will probably be a visionary, a lateral thinker, possibly even a risk-taker.

"And dealing with people like that; folk prepared to take a punt, who can often end up turning a challenge into a great success, is one of the reasons I really love my job."