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Central Wellington split-risk commercial and residential investment

A two-level fully leased property in a prime Te Aro location comprising two commercial tenancies on the ground floor with eight residential apartments above, is for sale with the vendor currently completing a comprehensive building upgrade.

Built in 1989, the 700sqm property at 39 Arthur Street has a wide frontage with a northerly aspect and is set back from the road to allow for 15 car parks on an 800sqm site strategically located adjacent to Karo Drive and Arthur Street’s intersection with Cuba Street.

The two ground floor tenancies are currently utilised as commercial kitchens. The larger of the two is occupied by Mojo Coffee Cartel as its central kitchen supplying Mojo’s numerous Wellington café outlets. The second kitchen is leased to Casper Hospo Limited, which is part of the Star Hospitality Group, majority-owned by DB Breweries.

On the upper level there are two, one-bedroom studios and six, two-bedroom self-contained apartments. These have a head lease to Casper Hospo Limited, are fully occupied and overseen by property management group, Comprendé.

The total property returns income of $424,000 plus GST per annum, with the leases having expiries of 2027 and 2030 and multiple rights of renewal to be exercised.

It is marketed for sale by tender closing 13th March through Mark Walker and Grant Young, Bayleys Wellington Commercial.

Walker said the apartments have recently been refurbished and the landlord has contributed a further $200,000 upgrading one of the ground floor tenancies. The overall works have included a seismic upgrade to 100% new building standard.

“This is a prime split-risk investment with residential and commercial tenancies, a sound leasing history, two major national tenants in occupation, and hands-off residential property management for a new owner.

“It’s on a decent chunk of inner-city land with the Central Area zoning allowing development up to a 27m height limit which enhances the capital value of the asset long term.”

Surrounding properties in the neighbourhood comprise predominantly low-rise commercial and residential buildings, with the Cuba Street precinct only 10 metres to the west of the site.

“This is a well-regarded investment destination, and enduringly popular with both investors and tenants.

“There’s been significant development activity in the immediate area, with some recently completed apartment complexes catering to the substantial residential demand generated by Victoria and Massey Universities which have campuses nearby.”

Walker said streamlined motorway access and nearby cross-city links underpin the investment proposition and in a market short of investor inventory, this property has compelling fundamentals.

“The leases are good with well-established occupiers that have a strong national and local presence, and the good quality residential apartments meet the relentless demand for inner city accommodation and are always occupied.

“Investors want proven tenants, and Casper Hospo is under the Star Hospitality umbrella – a national hospitality operator with around 35 restaurants/bars in the North Island including high-profile Wellington venues Foxglove, Dillinger’s, Southern Cross and Shed 22.

“Mojo needs no introduction in Wellington – it’s a wholesale/retail institution founded in 2003 and now has 26 café outlets nationwide.”

Click here for more information on the lisiting.

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