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Investors prioritise stable returns amidst taxing times

A substantial office investment with a new long-term lease to the Government tax agency Inland Revenue is generating interest among investors focused on income growth as a determinant of property value.

The complex on 1.36ha (more or less) of extensively landscaped freehold land at 11-15 Jepsen Grove is located on the urban edge of Upper Hutt’s CBD, the Wellington region’s most naturally resilient city centre.

Bayleys Wellington salesperson Grant Young says the tenanted asset provides a strong investment proposition with sound credentials in a high-growth location.

“Everyone – occupiers and investors alike – want well-located, enduring, large floor plates. We’re seeing that businesses are willing to pay top dollar for it.

“The subject property's sprawling single-level layout has allowed the established tenant to consolidate its operations into one highly efficient floor space.”

Mr Young is marketing the property for sale by tender with Bayleys colleagues Mark Hourigan and Mark Sherlock, closing at 4:00 pm on Wednesday, 24th April 2024 (unless sold prior).

The substantial 4,993sqm (more or less) office complex was purpose-built for Inland Revenue and features 130 on-site car parks.

It is fully leased to the Crown, with a nine-year lease until February 2032, two three-year renewal rights, and rent reviews to market every three years.

The property generates a net annual income of approximately $930,783 plus GST.

Bayleys Wellington director Mark Hourigan says the property was initially constructed in the 1980s. However, it was substantially upgraded more recently to provide modern accommodation.

“The construction is relatively simple, comprising a concrete foundation, floor with a steel portal frame, and iron roofing. The walls combine extensive areas of full-height glazing with tilt concrete panels.

“Internally, the building is mostly open-plan, air-conditioned offices interspersed with meeting rooms, amenities, large staff break-out areas, and extensive outdoor recreation areas. There is a high standard of workspace design, like other modern Crown sites.”

Landlord works, currently underway, include a complete LED lighting upgrade, additional car parking, and five electric vehicle charging parks with secure gate access.

Bayleys Wellington salesperson Mark Sherlock says the asset is in a thriving mixed-use precinct surrounded by large-format industrial premises, including the Te Papa Museum storage facility and the recently completed Lane Street Film Studio.

“Upper Hutt has experienced consistent population expansion over the past decade, with forecasts indicating an increase of approximately 40 percent by 2051.

“Affordability of housing, coupled with proximity to Wellington City, continues to strengthen a productive local workforce, with developers and firms eyeing the region as a significant investment area.

“Substantial new developments, including the world-class New Zealand Campus of Innovation and Sport (NZCIS)—an 18ha campus for elite team training home to the Phoenix and Hurricanes—and the Blue Mountains Campus, a 5 Green Star design-accredited mixed-use precinct and the Government’s official regional hub, reflect a high degree of confidence locally.

“The location is well-serviced with amenities and is easily accessible for the 300-plus staff that work from this centre. Additionally, Upper Hutt forms part of the Wellington Motorway network, providing direct access to Wellington north via State Highway 58 and the Transmission Gully.

“A superb combination of immediate income from a stable tenant with seismic resilience credentials and future growth prospects ensure that this asset will generate significant attention from investors seeking a balanced and future-proofed addition to their portfolios.”

Click here for information on the listing.

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