Office block towers over Wellington CBD's Golden Mile

Retail and office vacancies are rare along Lambton Quay. Photo / Supplied

Home to Westpac for 36 years, a high profile 19-storey Wellington office tower on the CBD's "Golden Mile" is being sold fully leased for the second time in four years.

An Australian-based property investment trust has owned the B-grade building at 318-324 Lambton Quay since 2006 and is selling to release equity to unit holders.

Ryan Johnson, Wellington managing director for CB Richard Ellis, says it is now for sale by expressions of interest, closing on June 17, and is generating the same amount of attention it did in 2006 with CBRE already having Australian tenants looking for space on Lambton Quay.

While there is no asking price, the rateable value is about $30 million. "The trust is not under pressure to sell. They're an all-equity fund so it doesn't have to sell if the price is not acceptable," Johnson says.

Opportunities to buy office buildings in the centre of the capital's retail and business district only come along rarely in property cycles and "they immediately pop up on the radar of serious investors".

The property on a 1375sq m site and was built in 1974 as the headquarters for the Bank of New South Wales, which became Westpac.

Westpac has a triple net lease over about 8000sq m of office space, 800sq m of retail area, 72sq m of basement and carpark storage and 20 carparks. The bank pays just over $3 million a year in rent on a lease that finally expires in May 2012.

The reinforced concrete building has basement storage, mail room and plant rooms, five levels of podium offices, including the ground floor banking chamber, carparking on level five and above that another 11 storeys of offices.

Within the banking chamber there are full height windows to Lambton Quay and a sweeping inter-connecting staircase to the mezzanine floor.

"The bank has given no indication of its intention to relocate or stay, but the area around the street level banking chamber has one of the top five retail pedestrian counts in the capital," says Johnson.

"Rent on average is $2500 per square metre, one of the highest of any prime retail strip in New Zealand and Westpac is paying substantially less than the $1.9 million the space could command."

Johnson says the lower levels have pleasant harbour and city views.

"Under the Wellington City Council's District Plan the property is at the beginning of a 'protected view shaft' that will maintain the views from the upper floors of the harbour and city out to Roseneath and Oriental Bay.

"Adjoining low rise buildings to the north and south are listed as heritage properties and there is little likelihood they will be redeveloped and have extra floors added."

Johnson says the well-maintained property is surrounded by other banks, corporate offices and exclusive retail stores. It is also close to the government sector.

"It is always highly sought after and retail vacancies are rare. Office buildings along Lambton Quay also have a good leasing history."

John McKenzie, CBRE's Wellington investment sales director, says Wellington's finance and insurance sectors produce 11 per cent of the capital's GDP and this goes a long way toward helping the city claim first place as New Zealand's most productive area at $42,400 a year per person.

"The combination of blue chip cash flow from a building in the city's top location ensures the property will remain a desired trophy asset."