Freshened-up buildings winning tenants on K Rd

K Rd is shaking off its seedy stereotype as the red light district of Auckland and is being given the green light by property investors as it transforms into a popular mixed-use commercial and residential precinct.

Bayleys' commercial broker Alan Haydock and Cameron Melhuish from Bayleys Auckland Central office have sold a number of refurbished character buildings on K Rd in recent months (see Around the Block).

Haydock says a combination of attractive Victorian and Edwardian character buildings and outstanding refurbishment and redevelopment work on these properties is attracting office tenants and retailers to the street, particularly those looking for a point of difference.

"Investors like the look of these buildings and the fact that they are fully tenanted to a good mix of businesses on lengthy leases in a strong location close to the CBD. This makes them a good investment proposition and means they are attracting plenty of competition from property buyers."

The Newton area, in which K Rd is situated, has one of the lowest office vacancy rates in the Auckland CBD and city fringe precincts. This was measured at 3.3 per cent in Bayleys Research's latest vacancy survey undertaken earlier this year, down from 4 per cent in 2008. Bayleys Research attributes this to the uptake of smaller office tenancies which dominate the area.

Haydock says these tenants are being attracted to K Rd by the high-quality character space that is on offer which can include polished floors, concrete or brick wall finishes, high-stud wooden beam ceilings and ornate stairwells.

"Tenants like design and marketing companies and art galleries are looking for funky space that enables them to make a statement about their business and these types of buildings certainly provide the opportunity to do that.

"By the same token they want premises with the latest building services, particularly telecommunications, and the refurbishments are also incorporating these as well as restoring the original features of the building."

Haydock says other factors attracting office tenants are the more attractive and affordable occupancy costs compared with top-quality space in the Auckland CBD and easy access to motorways.