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Aorangi House at 85 Molesworth Street, Wellington, has been sold by Bayleys for $18.6 million.
The vendor of the property is Aorangi Property Fund Limited, a company that falls within the Prime Property Group umbrella. The property was sold to a private syndicate facilitated by Oamaru-based Anaro Group.
Bayleys Wellington commercial salesperson Mark Sherlock, who coordinated the sale, said the key to the successful purchase was the quality of the property itself and the tenant covenant.
Aorangi House comprises of a 12 storey office building originally built in 1973. Since then the building has undergone an extensive refurbishment including a re-strengthening and a conversion to five-star Green Star NZ building status.
The building has a net lettable area in excess of 5000 square metres, with 32 car park spaces.
The primary tenant in the building is engineering consultancy Beca, which uses the building for its Wellington-based head office. Beca has offices throughout New Zealand, Australia and Asia.
Beca occupies all of the office accommodation in the building and the majority of car parks on a lease which extends through till June 2018, with renewals through to June 2024.
Other tenants within the building include three ground floor retail tenancies occupied by Westpac, Café 93 and The Lunchbox. The property returns a total projected net rental for 2011 of $1.56 million.
Mr Sherlock said Aorangi House was a good example of what can be achieved with older buildings through a full refurbishment, strengthening and repositioning.
He said: “There are tenants in the market that appreciate green building features and require buildings to be earthquake strengthened.”
The property was sold at an 8.4 percent yield, while the 19 individual syndication investors will receive a forecast return on investment of more than 10 percent.
Mr Sherlock said: “This sale has given the market a clear indication of where yields are sitting for quality buildings with strong tenant covenants.
“This is a benchmark sale for Wellington in the current market where there is a degree of uncertainty around property yields and market rentals.”