Refurbished building in vibrant Viaduct precinct

The three level commercial building at 104 Customs St West, a short distance back from Viaduct Harbour. Photo / Supplied

A multi-tenanted three-level commercial building, just one property back from Viaduct Harbour, is up for tender in a receivership sale.

The refurbished building at 104 Custom St West, encompassing 3326sq m of office, retail and carpark space, is being marketed by David Gubb and Mike Houlker of Bayleys Auckland on behalf of Deloitte, which is managing the receivership.

Tenders for the property, which is part of Bayleys' latest Total Property portfolio, close on December 8.

Major refurbishment and redevelopment, completed in 2002, has created character office and retail space. The building was extended and the facade was updated, with a new roof, window joinery, internal stairwells and partitioning.

The ground floor has two large restaurant tenants: the Raviz Lounge & Grill, which provides authentic Indian cuisine at restaurants around New Zealand and occupies 318sq m of space; and the high-profile Industry Zen Japanese restaurant, with a long-term lease over 263sq m.

Both premises have wide exposure to Customs St West.

The New Zealand Language Centre occupies 1145sq m over two levels and uses its space for tuition classes and offices.

The building is the New Zealand head office for the centre, which has been operating since 1984 and also has campuses in Wellington and Christchurch, offering a variety of English-language learning courses. The NZQA-accredited education provider has recently signed a long-term lease.

A new six-year lease is being finalised over 617sq m on the top floor of the building, commencing in January, which would take the property's net annual rental income, after operating expenses and ground rent, to about $350,000. There is also 570sq m of vacant space located on the top floor, which is north facing and includes a private balcony of 22sq m. "Leasing this space up would considerably increase the rental income from the property," Gubb says.

"There has been something of a revival in the education sector in the CBD over the past 18 months or so, and this space would be ideally suited to another tertiary provider. However, it could also be leased as more traditional office space."

The property is being sold with a ground lease over the 1487sq m site from Viaduct Harbour Holdings. This is a perpetually renewable lease with rent reviews every seven years.

Gubb says the next review should be settled early next year, giving the new owner stability for seven years. The receiver will pay the ground rent and operating expenses until the settlement date.

The standalone building, which also has 13 basement carparks, is in the heart of a thriving Viaduct Harbour precinct which has proved popular with tenants in recent years:

"It has been a very sought-after location as businesses have moved out of central Auckland or from some of the CBD fringe areas towards the waterfront. It's a pleasant place for firms to set up business because it is still close to the central city, but has the waterfront and an abundance of cafes and restaurants close at hand. It is also easy to get to, being on a number of transport routes.

"The area benefits from good access to and from all motorway systems via Hobson, Nelson and Fanshawe Sts, the Britomart Transport Centre is within walking distance ... with the Fullers Ferry Terminal also providing another alternative transport option."

The property is also located next the Tepid Baths complex, which is undergoing a $16 million project upgrade expected to completed next year.

bayleys.co.nz