Under-used Grafton site offers variety of options

The office building at 60 Grafton Rd, zoned for mixed use, is fully leased. Photo / Supplied

A modern four-level office building on an under-utilised 1389sq m city fringe site at 60 Grafton Rd, close to Auckland Hospital and not far from the University of Auckland, fits the bill for investors looking for properties that offer flexible options.

The 966sq m 1980s office block with a mixed-use zoning is being sold by tender closing on November 30 as part of Bayleys' latest Total Property portfolio and is being marketed by Alan Haydock and Cameron Melhuish of Bayleys Auckland.

In regards to the under-utilisation of the site, Melhuish says it has a basic buildable ratio of 2sq m for every 1sq m of land up to 15m high.

"The floor space could potentially be almost trebled to 2778sq m and, with bonuses, it could under some circumstances be expanded up to a 4:1 basis.

"The mixed-use zoning also means some of the space could be used for residential apartments, which may be an attractive proposition given the property's location so close to the Auckland CBD, the hospital and the university," he says.

The fully leased property is currently producing net annual rental income of $203,820.

There are four tenants in the building, a number of which have recently renewed their leases.

Vicom, which occupies the 122sq m ground floor of the building, is a major provider of telecommunications test and measurement instrumentation within the southwest Pacific region. The company has just renewed its lease for a further three years.

The charity Heart Children NZ is on the first floor, Bach Group has the second floor and IT support company Swerve is on the top floor having renewed its lease for a further four years.

The two middle floors comprise 289sq m each and the top floor 269sq m plus decks.

The property has 33 on-site parking spaces.

Haydock says the building is arguably under-rented at present, with rental rates ranging from $123-$160 per sq m, which provides the potential for an increase as the office market continues to recover. All of the leases have two-yearly rent reviews.

"The property is a proven performer with established tenants, rental growth upside and an excellent carparking ratio," says Haydock.

"Office buildings in a mixed-use zone on the fringe of Auckland's central business district are proving popular.

"Especially when their land area presents an opportunity for future expansion into further commercial floor space or conversion to residential apartments."

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