High profile in upmarket Epsom

"This superbly-located property generates annual rent of just under $65,000 and features a vacant upper level that’s recently been refurbished to a high-level," says Cam Paterson of Barfoot & Thompson Commercial, who is marketing 351 Manukau Rd for sale by tender closing at 2pm next Wednesday, July 26, unless it sells earlier by negotiation.

Zoning

The concrete building, with a total gross floor area of just over 494sq m sits on a 483sq m freehold site with a flexible Business Local Centre zoning and includes 14 on-site car parks.

Paterson says the building dates from the 1970s and has benefited from subsequent renovations and refurbishments.

It encompasses a 21sq m ground floor with an entry and some storage rooms; and two levels of commercial office accommodation above.

The first level of 237.24sq m has two tenancies, each having kitchen and toilet amenities.

The main tenant is Petrochem Management occupying 136.6sq m on the eastern side of the first level paying $32,500 per annum in rent plus GST – 30 per cent pro rata of the building.

The company’s lease commenced on July 1, 2014, and has a final expiry of June 30, 2020, if all rights of renewal are exercised - with no further rent views during the remaining term.

Rental

"The rental is gross with no outgoing payable and includes four car parks," Paterson says.

A barrister’s office has occupied about 100sq m long-term on the western side of the first level on a monthly lease that also includes four car parks. The tenant pays $25,759.50 per annum plus GST and 20 per cent of operating expenses (OPEX). 

Paterson says the lobby and upper level have recently undergone refurbishment to a high standard which showcases the building’s excellent natural light and views.

Telecommunications provider Spark is a third tenant leasing space for an aerial since February 20, 2005, that includes a portion of the ground floor area. Spark pays $11,093 plus GST with no OPEX payable and rent linked to three-yearly Consumer Price Index increases. The lease expiry is January 31, 2023, but contains a 12-month redevelopment clause.

Overall, the property generates total annual rent of $64,762-71 from the three tenancies which reduces to net income of $45,273,71 factoring in $19,489 of unrecovered OPEX from the monthly tenancy and the vacant upper level.

Paterson says the vacant 236sq m second floor could suit two separate tenancies as with the first level. "The balance of the site comprises the car parking," he says.

Location

The property is strategically located between King Edward and King George Avenues which intersect Manukau Rd and extend westwards towards The Drive.

Manukau Rd is a major north-south route connecting the Newmarket business and retail area to the north with the affluent suburbs of Epsom, Mount Eden, Balmoral, Royal Oak and Onehunga. It also intersects various east-west arterial routes giving easy access to Auckland’s motorways and the suburbs of Remuera, Greenlane, Kingsland, and Greenlane.

Paterson says Epsom, as with other Auckland city fringe suburbs, is experiencing strong rejuvenation with projects like Alexander Park’s redevelopment close to completion.

"Such big capital investments will provide future opportunity for well positioned nearby properties like 351 Manukau Rd."

He says Epsom is a very popular residential area due to being relatively close to the Auckland CBD, as well its desirable school zonings. "It’s certainly an area that’s popular with tenants, developers and investors. Investment properties are sought-after in this location where commercial businesses are well supported.

"Overall we believe this is an excellent location that will continue to grow in value as Auckland continues to gain momentum with the Unitary Plan providing for greater density of population in the surrounding residential areas."