Solid tenancies anchor freehold Epsom offices

Orix, a subsidiary of a Japanese multinational, is based at 32 Manukau Rd.

Orix, a subsidiary of a Japanese multinational, is based at 32 Manukau Rd. A substantial standalone Epsom office property with a long established multinational anchor tenant on the tightly held southern fringe of the Newmarket commercial district is on the market.

The two-level freehold property at 32 Manukau Rd is featured in Bayleys latest Total Property portfolio and is directly opposite the Epsom Girls' Grammar sports courts.

Anchor tenant Orix is the New Zealand subsidiary of a Japanese multinational company which is one of the largest fleet leasing and management groups in the world.

The property is being marketed by Clint Barber, Andy Beacham, and Ben Wallace of Bayleys Auckland's investment team. Tenders close on June 26.

Barber says the two-level office building with one floor vacant and 75 off-street car parks has a net rental return from Orix and car parking leases of $343,845 a year plus GST, and offers a prime freehold investment opportunity in a location which is characterised by tracts of leasehold property.

"Substantial freehold investment opportunities in this sought-after city fringe location seldom come to the open market," Barber says. "When they do, they are typically hotly contested with investors accepting lower yields given the intrinsic value of the land and buildings underpinned by the area's fundamentals."

Built about 1984, the property comprises 1948sq m of commercial office space on a 2555sq m rectangular-shaped site with good profile to busy Manukau Rd -- a major arterial route 200 metres southwest of the intersection of Broadway, Alpers Ave and Great South Rd.

The building was refurbished in March 2012 with upgrades made to the exterior, main entrance lobby and amenity areas. The vacant 1000sq m floor was returned to open plan-style and new air conditioning, carpet and ceiling tiles installed. On level two, Orix's tenancy includes internal offices as well as open plan work stations, and also features a gym, lunchroom, boardroom and outdoor balcony.

Beacham says Orix Leasing and Finance New Zealand Ltd has occupied the second floor of the building for many years and further committed to a six-year lease with two three-year rights of renewal in December 2011.

"The credentials of anchor tenant Orix provide a good backbone for prospective purchasers who can then look to either seek a new tenant for the vacant first floor, reconfigure the existing first-floor space to accommodate multi-tenancies, or take over the space in an owner-occupier capacity," says Beacham.

"The Business 4 zoning allows for broad medium-intensity business activity which is encouraging for potential owner-occupiers looking for a premium location with the benefit of a generous rental return from Orix and the car parks.

"Alternatively, an add-value investor will quickly see the merits of reconfiguring the vacant floor into either high-spec office accommodation for one or two tenants, or perhaps taking the opportunity to create boutique multi-tenancies to optimise the large floor plate."

Beacham says good quality, well-presented office suites are leasing well in the current market and the location of the building adds significant appeal for tenants.

"Business 4 zoning across the site allows a building of up to 15 metres and the existing building is around nine metres, so in principle, a new owner could add an extra level," he says.