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A prominent office tower near Wellington’s revamped waterfront zone is being taken to International Tender as receivers step in to manage the assets of one of the city’s beleaguered property developers.
Guardian Trust House - on the south eastern corner of Victoria and Willeston Streets - is being marketed by Bayleys Wellington on instructions from receiver Kerryn Downey of McGrath Nicol who is managing the property assets of Petherick Properties Limited (In Receivership).
“This is a building that stands out in the capital’s commercial streetscape and it has always attracted a lot of attention both from prospective tenants and investors. We sold the property to PPL by tender in May 2007 and it was certainly sought-after with spirited interest from multiple parties by tender day,” says Mark Hourigan, director of Bayleys Wellington.
“The property was constructed in the mid-1980s and as such, is ahead of a lot of Wellington’s commercial stock because of its compliance to earthquake standards. It’s been well-designed and is popular with tenants for its location and because there are wide city and harbour views from even the lower levels of the building.”
With 13 levels of office accommodation – three podium and 10 tower levels – plus a recently constructed single level retail tenancy and 47 basement car parks, the property is seeing average rental rates in the upper-$200 per sq m.
The property has an excellent tenant profile - including anchor tenant with naming rights New Zealand Guardian Trust Company, VTNZ, VERO Insurance, Animal Health Board and the popular Green Man gastro-bar - with a current net rental income of more than $1,800,000 per annum and upside from a 637sq m vacancy.
“While there has been some refurbishment work done in recent years, some further modernisation of communal areas and other light revamps as tenancies become available would lift the property’s net rental returns,” says Mr Hourigan.
As the existing building is not at its maximum allowable height, there may also be scope for a new owner to create additional levels on top of the tower structure, or above the single storey retail building.
“There is possibly capacity for two-four additional floors which would harness the harbour views, add to the physical presence of the already impressive building and obviously considerably improve the value of the property,” says Mr Hourigan.
The property is being marketed internationally on the back of Bayleys’ significant commercial alliances with global property heavyweight Cushman and Wakefield and in light of increasing investor activity out of Asia and Australia coupled with new initiatives at a government level encouraging overseas investment.
“At the top end of the market there is renewed interest in quality, strategic commercial properties from international investors who – despite the high New Zealand dollar – see this country as less volatile than other global markets,” says Mr Hourigan.
“New Zealand is perceived as being more stable than a lot of other countries and we don’t experience the financial troughs and peaks that some international property markets suffer. Attractive properties with strong fundamentals generally only come to the market in strapped times and from an international perspective, this is a safe haven for investment dollars.”
Tenders for Guardian Trust House close with Bayleys Wellington on 10 December.