KEY POINTS:
A central Auckland building which has been home to some of New Zealand's high- profile radio broadcasters for the past 16 years has been put on the market.
One of the country's biggest media groups, The Radio Network (TRN), has put the four-level building it owns on the corner of Cook and Nelson Streets in central Auckland up for international tender through David Bayley and Colin Stewart of Bayleys Real Estate, closing April 27.
TRN will continue to occupy the entire 3717 sq m building, taking a nine-year lease back from July 2007, with rights of renewal for a further nine years. The initial annual net rental income will be $800,000 per annum.
The property is being sold to free up capital for investment in the radio business.
Eight TRN radio stations operate out of the building: Newstalk ZB, Classic Hits, ZM, Hauraki, Radio Sport, Coast, Viva and Flava.
The top three floors comprise a mix of broadcast studios fitted out with state-of-the-art equipment and offices for support, sales and management functions. The ground floor has a reception area which has been extensively refurbished in the past 12 months. It also houses 33 covered carpark spaces with direct access to Cook St and Nelson St.
The building, of concrete-framed construction with glazed curtain walling on the outside, originally housed Kodak before it was bought by Radio New Zealand in 1989.
The Radio Network was formed as a result of the sale of Radio New Zealand Commercial, a State Owned Enterprise, to TRN by the Government in 1996. The Government retained ownership of non-commercial National Radio, Concert FM and Replay Radio stations. Radio New Zealand continued to operate out of the Cook St building until it relocated to new studios in Hobson St.
In 1996, TRN also bought the Auckland and Waikato stations of Prospect Ltd, adding the well-known Radio Hauraki and Easy Listening brands to the group. TRN now owns 120 radio stations operating in 26 markets across New Zealand and has just below 50 per cent national audience share.
TRN is a wholly owned subsidiary of Australian Radio Network (ARN) whose shareholders are APN News & Media and Clear Channel Communications.
APN is Australasia's largest radio broadcaster, with investments in 12 metropolitan radio stations in Australia as well as TRN in New Zealand. It also publishes magazines and 123 newspapers in Australasia, including The New Zealand Herald, and operates outdoor advertising businesses in New Zealand, Hong Kong, Malaysia and Indonesia.
Clear Channel Communications is the largest radio station operator in the United States, where it has more than 1150 stations and 42 television stations. It has equity interests in a further 240 radio stations internationally, and outdoor advertising interests in more than 60 countries.
David Bayley, executive director of Bayleys Real Estate, says it is rare in the currently tightly held investment market for a property to come on the market with such a long lease to a recognised industry leader.
Its no secret that the market is starved of good quality investment properties at the moment, and only a handful of these types of properties are being released for sale.
Bayley says in addition to the strong tenant covenant, the property offering also encompasses a good quality building on a prominent 1497 sq m corner site.
He says the location offers easy access to both State Highway 1 and 16 with the junctions for north, south and westbound traffic less than 500 metres from the property. Nelson St is also one of the city's main northbound arterial roads.
Bayley says the area has significant future development potential with two companies now preparing comprehensive site structure plans for nearby sites. A major redevelopment is planned on the ex-council depot site diagonally across the road from The Radio Network building, encompassing over two hectares of land.
Developer Pelago Ltd is proposing a mixed-use development over a 7-10 year time frame consisting of 20 new buildings containing a total of 147,876 sq m of residential, office and retail space.
In his recently published book ZB The voice of an iconic radio station, Bill Francis, station manager of ZB network Auckland, says Sir Robert Jones, known for his preference for free-standing corner buildings with lots of natural light, was on the board of Radio New Zealand and strongly recommended buying the former Kodak building.
"This duly happened and Radio New Zealand took over the building on 1 September 1989 its biggest capital expenditure ever at the time.
"The Kodak building was completely gutted, leaving just the floors, ceiling, pillars and the boiler. The original outside cladding was stone with slits for windows, designed to accommodate a massive photographic laboratory.
"Once the cladding was removed and replaced with glass, some spectacular views were revealed stretching from Birkenhead Point around to Princes Wharf. 1ZB took over the top floor and the old Kodak cafeteria on 14 April 1990. The glass-tower building is still a distinctive landmark with its bold, cobalt-blue glass facing, stepping down from the projecting corner."
