Office building at city crossroads

Building has opportunity to generate significant additional income from advertising billboards and naming rights. Photo / Supplied

Tenants occupy a mix of space with right-of-renewal leases running.

An Auckland city-fringe office building - with an opportunity to generate significant additional income by becoming one of the area's biggest advertising billboards - has been placed on the market for sale.

The office building and its car parks, at 4 Newtown Rd on the corner of Newton Rd and Abbey St, are about 100m from one of Auckland's busiest retail intersections - the meeting of Ponsonby Rd, Karangahape Rd and Great North Rd.

Sitting on 1479sq m of land, the existing building comprises five levels of office space serviced by 58 car parks, in a mixed use zone. The property is being marketed for sale through Scott Kirk and Clint Barber of Bayleys Auckland City, with offers closing on July 5.

Kirk says the property has enormous upside - both from generating increased rental by tenanting current vacant space, and by exploring signage income opportunities from the numerous highly visible positions on the prominent structure.

The building currently generates rental returns of about $261,761 plus GST per annum from seven different tenancies - ranging in size from 91sq m to 250sq m. The tenants occupy a mix of warehouse, retail and commercial space, with right-of-renewal leases running as far out as 2020.

Upper floors of the existing commercial block are connected by a 12-person lift with adjacent stairwell. Each level features its own set of bathroom and kitchenette amenities.

Reflecting design techniques of the mid-1980s, the building has concrete foundations and floors, timber framing, aluminium joinery, and suspended ceilings with ducted air conditioning. Most of the tenancies offer excellent natural light throughout via floor to ceiling glazing and views over Newton Gully and out to the west.

However, Kirk said that with an additional 1489sq m of space within the building currently unoccupied, there was obvious scope to improve the property's financial performance.

"These spaces are totally usable in their current formats or could be refurbished with a more modern feel - utilising polished concrete floors and exposed high-stud ceilings, for example. There is a variety of warehouse, office and showroom spaces that would cater to a wide variety of tenants. Additionally, the property also has a large, modern, two-bedroom apartment, which can be let as a stand-alone unit or leased in conjunction with one of the existing commercial tenancies.

"With such a prominent street frontage overlooking Newton Rd, there is the obvious potential to insert naming rights branding on the apex of the block for any new head tenant.

"This is a serious drawcard for any new tenant looking to relocate to a building where they can benefit from public exposure. Traffic analysis reports show 20,000 vehicles pass the building every weekday. " The building is a minute's walk from high frequency public transport routes along Great North and Ponsonby Rds.

Kirk said though existing and potential income growth was highly attractive for an investor, Auckland Council's more "developer-friendly" mixed-use zoning policy also made the property attractive for a developer looking to construct residential units within CBD and city-fringe locations. "This site could present an opportunity for redevelopment to incorporate a number of residential apartments in addition to the existing single dwelling," Kirk said.