One of the most significant repositioning opportunities to emerge in the Wellington CBD market in recent years is on offer, with the sale of 226 Lambton Quay.
The 19-level building, with dual frontages to Lambton Quay and The Terrace, is for sale jointly via CBRE and JLL by international expressions of interest closing on Thursday November 13 2025.
Matthew St Amand, managing director of CBRE Wellington, said the asset presents a multi-faceted value-add opportunity upon Wellington City Council’s forthcoming lease expiry in 2026.
“Vacant possession of the 13 level office tower from September 2026 sets up compelling pathways for refurbishment to capitalise on tenant preferences for prime grade office space, while equally, conversion into accommodation such as a hotel is viable.”
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From an office perspective, Wellington is currently recorded as holding the lowest prime office vacancy rate among major Australasian cities at 6.6%, according to CBRE Research. Refurbishment into A grade contemporary workspaces could capitalise on this, St Amand said.
Todd Lauchlan, managing director of JLL New Zealand, said secure retail income from a collection of national and global brands situated on Lambton Quay, Wellington’s Golden Mile, provides cashflow during repositioning and a value add opportunity.
“The substantial podium retail space fronting Lambton Quay is leased to an exceptional collection of brands including Whitcoulls, Lorna Jane, Sunglass Hut, Peter Alexander and Cue.
"These tenants contribute approximately 40 per cent of base rent, providing a resilient income stream while the new owner consider plans repositioning of the building’s tower floors.”
Brad Ross, CBRE associate director, said that in its own accord, the retail component of 226 Lambton Quay represents a sought-after investment opportunity, which could be stata-titled as a value-add initiative or to deliver liquidity to fund repositioning if required.
The building is an asset of unprecedented scale, representing one of the largest holdings by both net lettable area and site area on Lambton Quay and The Terrace, said JLL executive director Jonathan Ogg.
“This is one of Wellington’s most substantial commercial assets and one of the largest opportunities to be offered on the open market in the past five years.
"For investors seeking the opportunity to acquire a landmark asset and complete a transformational value-add project, this building presents flexible options backed up by a strong enduring income stream.”
Total net lettable area amounts to approximately 12,600sqm across two retail floors, four podium parking levels providing 109 car parks and the 13 office floors. The building occupies a prime land holding of 2,246 sqm.
Nick Thompson, executive vice president of hotels at JLL, said indicative concept design for a hotel conversion has identified a yield of 220 keys as achievable.
“Underlying fundamentals in the Wellington hotel market remain strong, laying the foundation for a solid recovery. Sustained corporate and government-related demand for CBD hotel rooms underpins the viability of a potential hotel conversion, along with the ongoing recovery in New Zealand’s tourism market.”
With many of Wellington’s major CBD hotels having become dated and a constrained future supply pipeline, there is a clear opportunity for 226 Lambton Quay to be converted into a global-standard four to five star hotel to meet modern traveller expectations, Thompson said.
“The only major hotel project on the horizon is the potential refurbishment of the long-closed Amora Hotel, resulting in Wellington facing a period of minimal new hotel room inventory - opening up a compelling opportunity at 226 Lambton Quay.”
Current net annual passing income is around $6.2 million, providing a highly attractive short-term yield, with cash flow from the retail component of the asset continuing beyond Wellington City Council’s lease expiry.
The building’s location amplifies its value add potential, said Brent McGregor, CBRE executive chairman.
“The tower sits in Wellington’s premier commercial core, with strong foot traffic and quick access to rail, ferry and bus options. The council’s Golden Mile revitalisation project will further strengthen the precinct’s appeal for workers and visitors.”
In addition, the government’s recent policy announcement of Investment Boost, enabling 20% tax deductions on capital expenditure and forthcoming seismic reform, are set to benefit the returns from the asset and Wellington as an investment destination.
- Supplied by CBRE
