Old offices become luxury homes

37 Anzac Ave, Auckland City.

Developers turn dated Auckland buildings into high-end apartments as demand increases for city property.

As Auckland City corporates move on up to flash new glass high-rise towers nearer the waterfront, their dated, cast-off offices are being gratefully snapped up by people wanting to make them their homes.

A growing number of city-fringe office blocks are being converted for new lives as luxury apartments.

Residents are lapping up the large floor plates, high ceiling studs, views, carparks and strolls to CBD shopping, dining and entertainment, says Bayleys Real Estate agency.

The conversions include the former Baycorp headquarters in Hopetoun St - a late 1970s building - converted into 91 apartments, and the former Telecom House nearby, which has been increased from 15 to 18 storeys and has a penthouse which sold for nearly $6 million.

Improving values for city apartments since 2011 were giving developers confidence to take on new large-scale products - both new builds and conversions, said Bayleys research manager Ian Little.

More than 2500 new apartments would be coming on to the metropolitan market in the next two years in a dozen projects.

However, projects could not come on stream soon enough to meet the growing demand for inner-city living, with some not likely to be ready until 2017.

The trend to turn inner-city B and C Grade office blocks into freehold apartments was led by Tawera Group's David Mahoney in 2012.

In the former Becca Carter office at 132 Vincent St, the company created 62 apartments over six levels and their quick sellout inspired the move to convert bigger buildings to the successful Hopetoun and Hereford Residences.

"The advantage of conversions is being able to take potential buyers to the exact spot to show them what their views will be like," said Mr Mahoney. "From a construction point of view, a conversion is faster. To rebuild the Telecom building (now named the Hereford Residences) it would take three years and we did the conversion in half the time.

"I feel apartments are still undervalued compared with housing, so there is good growth in the apartment market.

"We are selling the lifestyle - being handy to Ponsonby and being able to lock up and leave but the benefit of a bigger-size apartment than some around."

Apartment specialist Martin Dunn, of City Sales, said the supply of apartments from office conversions was small and they were being snapped up in an unsatisfied demand for apartments.

"With conversions we see a certain generosity of size, because developers have been able to buy unlettable office buildings on the cheap. The thing buyers should be aware of are the age of the building's elevators and its earthquake-resistance rating."

Mr Dunn said people considering buying into a conversion block should look for a discount to the price of an apartment in a new block, which ran at $9000 to $10,000 a square metre.