Comprising 552sq m (more or less) of freehold land at 11 and 13 Karaka Street, the properties feature preferable Business – Mixed Use zoning with an intensive 32.5m height overlay.
Bayleys Auckland City & Fringe associate director James Were says the properties are offered to the market at a time of subdued demand for development sites, which contributes to the solid value proposition for a new owner focused on near-term rental growth.
“Complex market dynamics have seen some of the fire dampened in the development realm, with well-leveraged investors focusing on assets producing immediate income as they ride out the current market cycle.
“Significant rental growth in well-located assets will continue over the coming year, providing confidence for investors, and an added layer of surety from exceedingly low vacancy rates.
“At the same time, well-capitalised developers continue to search for opportunities in high-growth areas, mainly where evidence of investment can already be observed.
“Newton on Auckland’s CBD cusp is one such location which has benefitted from strong mixed-use development recently, producing several high-profile apartment buildings whilst adding a vibrant residential energy to the area,” he says.
Mr Were is marketing the Karaka Street sites for sale with Bayleys colleague Phil Haydock.
The properties are offered together for sale by tender, closing at 4:00 pm on Tuesday, 9th May 2023 (unless sold prior).
Both titles feature a north-facing position and views of the city.
11 Karaka Street comprises 274sq m of freehold land, while 13 Karaka Street comprises 278sq m (more or less), featuring approximately 20m of street frontage and intensive mixed-use development fundamentals.
Together, the properties generate a gross income of circa $150,000 pa from improvements, including three levels of shared residential accommodation, totalling 14 rooms.
Bayleys Auckland City & Fringe associate director Phil Haydock says the properties provide an attractive cash-flow for a developer planning future works.
“On the other side of the ledger, the income is a valuable asset for investors and land bankers, with plenty of scope to add value and grow,” he says.
“The opening of the international boarders has seen a rise in the number of tourists and foreign students seeking accommodation convenient to the CBD and universities. With a lack of new supply being brought to the market, this has seen pressure on existing stock with residential vacancy rates plummeting.
“Value-add mechanisms, which include maximising development provisions, pursuing sustainability credentials, and focusing on quality, continue to attract high-quality tenants, providing investors with a significant opportunity to increase cash-flow from refurbishment or development works.
“The Karaka Street sites are further supported by a valuable height variation control, with an allowable build height of 32.5m – 14.5m higher than the usual 18m under the Business - Mixed Use zoning, providing skilled investors/developers with even greater scope to capitalise on future growth projections.”
Mr Haydock says the properties are located conveniently, within walking distance from the abundant amenities of Karangahape Road, the future City Rail Link Station and Universities, in addition to easy access to motorway interchanges, transport links and Auckland’s CBD.
“The popularity of the central location is demonstrated by several residential and commercial developments, currently underway or recently completed, contributing to a higher level of amenity in the immediate area and evidence of substantial local investment.
“Intensive development sites in this precinct have become extremely tightly held, with owners looking long-term to flexible zoning provisions which provide for residential activity as well as smaller-scale commercial operations including office accommodation, retail, food and beverage and healthcare,” he says.