Hands-off investments with good leases in place

The opportunity to invest in Wellington’s active accommodation market will be presented when four unit titles in two central city Quest Serviced Apartment complexes go under the hammer as two lots at Bayleys Total Property auction on 25 June.

Chris Callear of Bayleys Wellington says the reception offices and conference facilities in Quest on Johnston and the reception offices and studio apartment in Quest on The Terrace, offer sound long-term opportunities for those looking for a ‘hands-off’ investment.

“These freehold strata-titled units are well-located with established tenants and personal rent guarantees. I would expect that bidding will be based on the net income return of these properties and therefore likely to be well below the current capital valuations,” says Mr Callear.

Units 1A and 2B, 35 Johnston Street, are being sold together and form part of the 14-storey Quest on Johnston apartment building in the heart of the city opposite Midlands Park, just down from Kirkcaldies.

Unit 1A comprises the ground floor reception space and lobby of the building plus staff kitchenette and toilet facilities. Unit 2B is on the first floor and the space is subdivided into three rooms – a conference/meeting room, an office/store room and a linen storage area. There is also a kitchenette and toilet facility included - these are shared with the gym which is on this level (but not part of the subject lot.)

Total lettable area is 192.92sq m and total net income is $44,046 plus GST (if any). The next lease renewal and rent review will be in September 2011, with a final expiry of 2021.

Units D and 1C, 120 The Terrace, comprise ground floor office and administration space plus a separate storage area, and a small west-facing studio apartment on the first level of the 16-storey Quest on The Terrace apartment building. The property is approximately 100 metres north of the intersection with Boulcott Street with relatively easy pedestrian access down to Lambton Quay and Terrace car parking nearby.

With a total lettable area of 102.13sq m, the units have separate leases with the next renewal in 2011 and final expiries of 2021. The two units return a total net income of $35,000 plus GST (if any).

Quest Serviced Apartments have been operating in New Zealand since 1997 offering well-appointed apartments in key city and provincial locations. There are now more than 100 Quest apartment complexes throughout Australasia with individually strata-titled units largely owned by investors and leased back to Quest.