Split-risk Office Tower With Future Conversion Potential

A prominent Wellington CBD office tower with more than 40 percent of its income underpinned by Crown tenants, has come to the market for sale.

Formerly known as Kordia House, the property at 2 Manners Street – where Manners intersects with Willis Street – has been owned by a syndicate of private investors since 2009.

Under this ownership, significant capital investment has been made to the building including strengthening to 71 percent new building standard, lift and air conditioning upgrades and partial resurfacing to the carpark on level four of the 14-level building.

As some members of the syndicate now wish to release equity from the property, it is being offered for sale by tender through Bayleys Wellington Commercial, closing 4pm, Wednesday 17th March.

The freehold offering is zoned Central Area and there’s 8,625.54sqm of lettable space on a 1,577sqm site which is locally-known as Perretts’ Corner – so-named after the chemist shop which opened there in 1912 run by the Perrett brothers.

That business closed in 1964 and the building was demolished in 1971.

The office tower was built in the 1980s and subsequently refurbished. It has six ground floor retail tenancies and boasts large floor plates across both the podium office spaces and the 10-floor tower above.

Typical floor plates are around 627sqm in the tower component and 995sqm in the podium and are generally open-plan making it easy to subdivide for multi-tenancy use.

The property has a large lift lobby at Willis Street and a second smaller lobby off Manners Street.

The upper levels have some harbour views and the carparking on level four is accessed by a two-way ramp on Ellers Lane on the southern boundary of the property.

Mark Sherlock of Bayleys said it’s an attractive building with good street presence and a split-risk mix of office, car park and retail income.

“This property has a sound leasing history and has always been popular with tenants thanks to the convenient location and the credentials of the building itself.

“It currently returns a net rental income of $1,956,275 and while there is now some recent vacancy in the property due to natural attrition, a new owner backfilling this vacant space could realise additional rental income which makes it a pretty compelling opportunity.”

Tenants in the building include Kiwibank, Ministry of Social Development, TJ Katsu, Calibre Consultancy and Zone Law.

Sherlock says the north-west corner orientation, harbour glimpses and the precedent already established in the broader area for inner city accommodation, makes this property a “quiet sitter” for a future conversion project.

“The block south of this property has multiple buildings already in the process of being converted to accommodation use so the ball is already rolling in this precinct,” he said.

“This corner site has great natural light and is never going to be built-out given the infrastructure in place for the city grid.

“Whether for office, pure residential or short-stay accommodation, the central area is enduringly popular and this property could be one for an astute investor to put up the sleeve and hold.”

The Manners-Willis Street corner sees large volumes of vehicular and pedestrian traffic as it sits between the Cuba Mall precinct and Lambton Quay and is connected by Wellington’s Golden Mile strip.

Click here for more information on the listing.

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