CBRE is marketing a compact Auckland CBD accommodation tower at a rarely-available price point, creating an accessible entry opportunity into a high-demand sector with strong potential to add value.
The 11-level, 99-room building at 150 Vincent Street is currently operating as the City Lodge Hostel. It presents immediate scope to drive increased operational efficiencies to maximise cash flow return, providing a clear value add opportunity within Auckland’s living sector, while also offering diverse future opportunity.
CBRE’s capital markets team is marketing the property for sale by tender, closing October 16.
Associate director Brad Ross said the asset’s appeal lies in its combination of a whole-building play, central city location and scope to add value in the highly sought-after living sector.
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“The building offers the chance to acquire exposure to the Auckland CBD living sector at a compelling price point well below replacement cost, with broad potential to achieve operational improvements to deliver superior returns.”
With a diverse range of opportunities for the future of the asset, buyer strategies could range from continuing existing hostel operations under a more efficient model, or repositioning the building.
The asset’s full-year 2025 net return of $622,014 lies significantly below where CBRE sees achievable normalised potential, which lies closer to $1.15 million a year, said Ross.
“The operating efficiency improvements available are significant. Alternatively, re-positioning opportunities could include worker accommodation, international student accommodation or social housing to leverage shortages in these sectors.”
The building is currently configured into 99 ensuite rooms, with kitchen, dining, lounge and laundry facilities provided on one level. There is also a full-floor, three bedroom self contained penthouse apartment.
For investors targeting the living sector, the building provides an opportune entry point into the market. There is a residential tenancy over the penthouse apartment, an existing lease buy-out of two floors (24 rooms) and a further two floors under negotiation.
The balance of the asset is offered with vacant possession, Ross said.
“The asset has a steady level of occupancy history, with its buy-out agreement increasing base line occupancy and enhancing the asset’s revenue profile looking forward. A new owner will have the option to continue to operate the property as a hostel themselves, or seek other alternatives, such as further buy-out agreements.”
Ross said the pricing guidance reflects the asset’s current condition and operations.
“The vendor has commissioned building condition and consulting reports identifying remedial works, which have been costed and are reflected in pricing guidance. Purchasers may well identify efficiencies with regards to these works.”
The building presents a low-cost entry option into Auckland’s accommodation market in a location set to benefit from the upcoming City Rail Link, he added.
“The offering suits active investors with a strong vision for value growth, who are looking for a CBD foothold with the opportunity to drive bottom line cash flow improvement.”
Supplied by CBRE
