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Ponsonby building sells for $37.8m after major rebuild

Tags: Commercial

A complete makeover of an ageing Ponsonby building has met with a strong response from the market with over two thirds of its office space leased prior to completion and the property also sold to an international buyer for $37.8 million.

Located on a substantial 1960sqm site at 20-22 Pollen St with dual frontage to MacKelvie St, the former printing premises constructed in the mid 1980s has been totally transformed into what developer Tim Wilson of Triumph Capital describes as a “new age character building”.

Triumph Capital purchased the predominantly industrial property from NZX listed Stride Property in 2016 at the expiring of a lease to longstanding occupant Gravitas Media

With the assistance of FORMiS architectural studio and Lanta Construction, Triumph Capital has effectively developed a new building comprising three levels of office space with a net lettable area of just over 4000 sq m plus 92 internal car parks and 12 bicycle parks.

“We’ve retained and added to the brick perimeter walls of the old building but the rest of it has been completely gutted and strengthened, with reinforced concrete foundations piled down to the bed rock to support the extra height of the new structure,” says Wilson.

“It’s an expensive exercise to repurpose these sorts of buildings and to do it properly with such high specifications. It would probably have been easier to bowl it completely and construct a standard office building – but I wanted to develop something with character and soul that fitted in with its surroundings and that retained some connection with the past.”

The office accommodation has new exposed Double Tee concrete ceilings with 3.5-4.6 m floor to ceiling stud heights. Wilson says this is higher than normal in new office buildings and in combination with extensive glazing provides plenty of natural light for tenants.

The indoor temperature is controlled through an exposed steel air conditioning system, with the number of separate temperature control zones also well above the industry norm, says Wilson.

“A variety of shared, attractively furnished outdoor terrace areas have also been incorporated into the design to provide relaxation areas for staff and clients and also opportunities for interaction and collaboration between tenants.”

Bayleys office leasing agent Ben Wallace says the building has hit the right note with tenants with seven either already in residence or about to move in. They are mostly IT and creative media businesses which are paying between $435-$495 per sq m.

“Triumph Capital has done an outstanding job in creating attractive, interesting working space which has a great ambience to it and is different to and edgier than most more traditional office buildings - which is why it has attracted these types of tenants,” says Wallace

“The fact that occupants have been prepared to commit to long-term leases, mostly between six and eight years, is testament to the quality of the development and also reflects Ponsonby’s growing popularity as a business location. The building is less than 100 metres from Progressive Enterprises’ Vinegar Lane redevelopment project and is also close to Ponsonby Central which have been catalysts in the revitalisation of the southern end of Ponsonby.”

Wallace says two tenancy spaces remain available. One is 649 sq m on the top floor on the Pollen St side of the building. The bulk of this floor is leased to ICM Asia Pacific which designs, builds and operates Software as a Service (SaaS) platforms globally.

A further 593 sq m is available for lease on Level 2 plus a large outdoor terrace area which is shared with other occupants on that floor. These include digital verification services provider Origin ID, house relocation services co-ordinator MoovMe and holistic health company BePure.

Wallace says the building’s floor space and structural features have been designed to provide flexible and versatile workspaces. “It also has high quality bathroom and shower facilities similar to what you would expect to find in an upmarket hotel.”

With the development consented under the more generous car parking provisions of the former Auckland City district plan, Wallace says tenants have access to a good supply of parking spaces.

The building has its main entrance on Pollen St with access to ground level and basement parking off MacKelvie Streets and has substantial frontage to both streets. Tenants on the ground floor which has high road visibility are outdoor digital advertising company Adshel NZ and digital strategy providers Hype & Dexter.

Tim Wilson says an important part of the design was to provide interesting and attractive frontages which would enhance the two streetscapes. The glazed façade on the Pollen St side of the building has close to 100 powder coated brass and brushed aluminium panels running across it and into a corridor entranceway on one side of the building with a living green wall and light filled atrium positioned at the end of it.

The property was recently sold on behalf of Triumph Capital to a private European investor for $37,857,304 at a 5.75% yield by Chris Bayley and Lloyd Budd, Bayleys Auckland, with the purchaser represented by VennCap Real Estate in Sydney.

VennCap director Tim McEnallay said the purchasers were pleased to have secured a well leased property of this quality as their first New Zealand acquisition noting there is a vendor rental underwrite on the two tenancies yet to be leased

Chris Bayley says there have been a significant number of substantial sales of Auckland commercial properties to offshore investors concluded this year. Bayleys also recently sold one of Spark’s Auckland head office buildings to a Singapore investment fund for $77 million.

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