"There are a number of large buildings in this part of town that have either undergone a conversion or are in the process. Sitting opposite this building at 369 Queen St is 345 Queen St which has been taken from offices into a fully fledged school operated by Academic Colleges Group (ACG).
"Another city office building at 132 Vincent St was converted from offices into a 62 luxury apartment complex. Currently 401 Queen St is being converted from offices into a hotel and 15-20 Hopetoun St is undergoing redevelopment from offices to apartments."
Binning says Auckland hotels are running at historic high occupancy rates with limited stock available so the opportunity presented to convert the levels 5-19 of 396 Queen St into an accommodation facility is timely.
"Located on the intersection of Queen St and Mayoral Drive within Auckland's main retail and commercial thoroughfare, 396 Queen St is perfectly positioned in the heart of one of the busiest educational and residential precincts in New Zealand," he says.
"Queen St is Auckland's central thoroughfare with its abundance of shops, restaurants, pubs and cafes. It also sits within the hub of the Auckland's entertainment precinct being diagonally opposite Auckland's Town Hall and the Aotea Entertainment Centre."
Binning says 396 Queen St has many factors that make it well suited to conversion including a central core with good sized floor plates, four elevators, a Queen St entrance, reception lobby, back of house entry, drop-off zones, secure parking and storage.
Completed in 1989, the modern office tower is on a freehold site of about 1470 sq m. The building can be accessed via all street frontages with the main guest or client entrance and reception lobby fronting Queen St; a secondary and vehicle entrance on to Mayoral Drive; and a third entrance, predominantly used for loading, car parking and back of house space, from Airedale St.
Binning says the property has some tenants on short-term leases and could be bought "as is" with vacant possession as a potential hotel or residential development.
"A significant benefit is the possibility of taking the building height to another five levels which would drive the value of this investment even further for a purchaser. Levels 5-19 have a total gross floor area of about 8400 sq m and adding an extra five floors would increase the building area by around 2500 sq m."
The building's construction is of reinforced concrete foundations, columns, beams and floor slabs built around a central hub housing the key services. Glazed external walls allow full floor-to-ceiling natural light to all the floors. The internal walls and ceilings are of plasterboard with acoustic ceiling tiles.
Two of four lifts have been recently modernised and the other two decommissioned. Concept plans for more floors provide for the replacement of the two decommissioned lifts that would extend service to the added top floors.
The four lower levels of the building which are not included in the sale have recently undergone an extensive redesign and were extended along the Queen St and Mayoral Drive frontages, creating 24 retail units. The building is fully equipped with fire sprinklers and has a seismic assessment of more than 100 per cent of New Building Standard (NBS).
The site is zoned Strategic Management Area 1 under the Auckland City District Plan Central Area Section Operative 2005. The aim of this zone is to maintain the highest intensity of activity in the central Auckland area.
Binning says the property is close to two of New Zealand's largest tertiary facilities, the University of Auckland and Auckland University of Technology which have a roll of close to 60,000 students, many of whom require centrally located accommodation from February to December.
"There is a huge drive for residential development in the CBD and this increases in the upper Queen St area past Aotea Square towards Karangahape Rd and also up from Queen St towards the Symonds St ridge.
"This tower block at 396 Queen St is in the nexus of this trend and it makes for one of the best accommodation conversion opportunities in the market.
"There is a distinct urban evolution occurring in central Auckland with the commercial centre of gravity moving towards the water. However, the top end of town is experiencing an increase in residential development and a growing influence from the education and hotel sector towards Ponsonby and K Rd."
