Capital building good add value prospect

The 10-storey Leaders Building which is for sale at 149 Featherston St, Wellington at the intersection with Brandon St.

The Leaders Building, a 10-storey Wellington CBD office and retail building located on the corner of Featherston St and Brandon St, has come to market for the first time in nearly 20 years.

"This strategically-located building presents a great opportunity to add value," says Peter Wilkin of Colliers International who, with Carl Hastings of Paul Hastings and Co, is marketing the leasehold property at 149 Featherston St for sale by tender closing December 21.

Comprising ground floor retail premises, eight office floors of around 260 sq m each and a rooftop apartment, the building has a net lettable area of 2339 sq m and occupies a 333 sq m Wellington City Council leasehold site. Ground rent of $115,431 plus GST is paid annually on a 21 year lease commencing November 15, 2011, and the lease includes a right to renew six months prior to expiration.

"This property has the potential to be converted to residential use once seismically upgraded to 100 per cent of New Building Standard (NBS), or alternately refurbished and re-let as office space subject to the appropriate Wellington City Council approvals," Wilkin says.

Assessed at about 65 per cent of NBS, it is still well above the 34 per cent threshold for potentially earthquake-prone buildings.

"The owners, Wellington property investors Andrew Harcourt and Rob Garlick, have already received resource consent to upgrade the building to 100 per cent," Wilkin says.

Tenants generate a passing net income of $209,462 and include Leaders Real Estate, law firm McWilliam Rennie and Total Eyecare.

"But if the building was renovated, it's estimated the potential net income, would be more than double that at over $450,000 a year," Wilkins says.

The tower is north-west facing and has 10 basement car parks which are accessed from Brandon St frontage.

"Featherston Street is one of Wellington's foremost and sought-after office and retail locations in the Wellington CBD," Wilkins says.

"The property is on the major bus routes and a short walk to the waterfront and railway station.

"It is also very close to Lambton Quay and Willis Street, Wellington's prime retail area."