"Car parks are the ultimate passive investment as there are no fixtures and fittings associated with them and they require very little maintenance. In this case, Wilson Parking also holds the building management agreement for the common areas of the property, with management obligations that include keeping the premises clean and secure and meeting health and safety requirements.
"This makes an ideal investment for retiring baby boomers looking for a good cashflow from a 'hands off' investment. It also provides a longer lease term and a better income return than residential property."
Melhuish says lease provisions in two of the five blocks provide for purchasers to use up to 10 car parks themselves. "In addition, because all of the 250 car parks are on their own titles, there would also be flexibility to sell off one of more car parks individually at any stage in the future to release some capital."
The building, which was completed in 2000, consists of a ground floor restaurant and car valet facility, 382 carparks, a bowling alley on the top floor and external signage areas.
"The majority of the car parks in the building, which has a favourable seismic assessment of 90 per cent of New Building Standard, are leased to Wilson Parking long-term with the balance mostly used by neighbouring property owners for their tenants' car parking requirements," says Melhuish.
Established in 1981, Wilson Parking is one of New Zealand's largest parking operators with more than 250 carparking facilities as well international operations at more than 700 locations in Australia, Singapore, China, Korea, Malaysia and Hong Kong.
"This is one of Newmarket's most centrally located car parking facilities, positioned just off Broadway, and represents an exceptional opportunity to purchase a straight forward investment underpinned by a solid income stream in one of Auckland's most vibrant commercial and residential precincts," says Melhuish.
"The facility is centred among many major office, retail and residential buildings and the nearby rapidly expanding Auckland University Campus on Khyber Pass. The growing residential and office worker population and expansive new retail and office developments will continue to drive the demand for parking in Newmarket."
Current office developments include Mercury Energy's new two-building, 13,000 sq m headquarters complex at 33 Broadway, scheduled for completion late next year. The Warehouse Group sold a property at 66-80 Broadway, Newmarket, earlier this year for $65m. Haydock says the site has been bought for redevelopment and there are also big plans for the expansion of the Westfield mall at 277 Broadway.
He says the new Auckland Unitary Plan seeks to reduce the development of off-street carparking to encourage greater use of public transport and minimum carparking requirements for new development have been removed. "This, in combination with Newmarket's continued growth, is likely to put pressure on the existing supply of car parks and continue to push their value up."
