The most prominent commercial tower in Rotorua’ s CBD – affectionately referred to as ‘the beehive’ by many of the city’ s locals - has been placed on the market for sale.
The Zens Centre in Arawa Street is a standalone 9228 square metre building constructed in 1988 in a style similar to Wellington’s famous ‘beehive’ parliament structure. Prominent features of the Zens Centre include a high ceiling entrance, marble wall and floor and marble columns.
The 10 storey building comprises of ground floor retail and a main entrance and foyer off Arawa Street, eight levels of air conditioned office space, and 45 carparks, including 21 secure internal carparks on level one. Access to car parks is via a service lane from Pupaki Street. The tower levels are serviced by three 900kg or 13-person capacity lifts.
Situated in the middle of the city’s main business area and overlooking Rotorua city and lake, the property has a land area of 1649sqm, and the building has a net lettable area of 8008sqm over 10 levels. Of this, 5511sqm is occupied. The property is leased to a mix of professional, private and Government tenants.
Tenants of the building are: The Department of Internal Affairs, The Department of Labour, Fairfax Media, Legal Services, law firms Rob Vigour Brown, Martin Hine, and Moana Dorset, White Heron Holidays, Temp Resources, The Tree Lab and GMO Renewable Resources. Their tenancy leases range from monthly to 2018.
The freehold high-profile building has been placed on the market for sale by tender through Bayleys Real Estate, with a tenders closing on June 18. The building is featured in Bayley’ latest Total Property portfolio.
Bayleys Manukau salesperson Luke Carran is marketing the property with Bayleys’ director of international sales, Chris Bayley, and Bayleys Rotorua salesperson Mark Rendell. Mr Carran said the building had a multitude of options for potential investor purchasers.
“Only some 57 percent of the tower is currently leased – presently returning an annual net income of $124,734 per year plus GST. When previously leased to near-full occupancy, the property was returning more than $1.03million – so there is considerable upside to generating rental revenues if it were to remain as a purely commercial entity,” Mr Carran said.
“Negotiations with existing tenants to extend their leases and terms would also add further value to the property from an investment perspective. “The strength of this investment in its current format is the diversity of tenancies - which are spread across multiple business sectors and are underpinned by two Government agencies.
“The property occupies a prominent location in Rotorua’s central business, and office area. The majority of surrounding buildings are two or three levels, so the
Zens Centre at 10 levels dominates the precinct.”
Mr Rendell said there was also the potential to alter the building’s use subject to council approval – either creating serviced apartments or a boutique hotel, or inner-city apartments. The configuration of these concepts could encompass just the upper levels, or the entire building.
“The central city location of Zens Centre – surrounded within a radius of 200 metes by a number of retail stores, restaurants, cafes, and tourism attractions – sustains its appeal for any multitude of uses,” Mr Rendell said.
“With holding revenues being generated from current tenancies, an investor looking to add value through diversification of use can take confidence that there will be income during any required consent application or resourcing periods.
“Plans, fire reports, and valuation analysis have been undertaken to substantiate the viability of unit titling the individual floors, and this raft of documentation is available for potential buyers undertaking due diligence to review.”
The building has been evaluated as having a seismic assessment rating of 79 percent to New Building Standards and has a Rotorua District Council rating valuation of $7.04 million.