Underpinned by a strong appetite for CBD office property in Wellington from both a sales and leasing perspective, the sale of the high-profile 17-level Fujitsu Tower on The Terrace is expected to strike a chord with investors.
With 8,825.36sqm of lettable area, the property has a respectable leasing history and is currently 97 percent leased.
Several floors will become vacant in the medium term as two key occupiers have committed to new developments in the city, meaning the building will have particular appeal for add-value investors who recognise the opportunity to refurbish and subsequently re-lease to take advantage of the buoyant market.
Fujitsu has occupied – and had naming rights on – the tower since 2011 and long-term occupier Ministry of Justice has just taken a lease extension until March 2022.
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Other current occupiers include investment and group Jarden Corporation, Asia NZ Foundation, the largest New Zealand-owned recruitment agency – Beyond Recruitment, New Zealand Productivity Commission, and Robbiez Café offering an on-site café presence.
The property is owned by a syndication managed by Oyster Property Group, a leading New Zealand commercial property and fund manager. Oyster manages a range of retail, office and industrial assets throughout New Zealand, with a combined value in excess of $1.9 billion.
The property is being marketed by Grant Young and Mark Hourigan of Bayleys Wellington Commercial, by way of deadline private treaty closing 4pm, Wednesday 24th March (unless sold prior).
Young said the tower is in a pivotal CBD location, was designed by Struction Group Architects and built by Angus Construction in 1985.
“Each floor is configured around a service core to the rear western side of the building enabling all floors to have great natural light and offering harbour views from the upper levels.
“The generous and flexible floor plates average 520sqm which is a viable and popular footprint for corporates, and the property would respond well to refurbishment of individual floors as they become available which would substantially lift the potential net income of the property.”
The current net income from the property is $2,205,050 per annum, with the potential to take this significantly higher with a refurbishment and re-leasing program.
A full detailed seismic assessment has been carried out on the property and a number of recommendations made. With some work carried out on the stairwells, the property would be at 75 percent new building standard.
The property has dual access, with pedestrian and vehicular entry from the eastern side of The Terrace and pedestrian access from Lambton Quay via Cable Car Lane.
Young said while there could be some interest in conversion of the building for accommodation purposes given the position, natural light and harbour views from the upper levels, his feeling is the property has fundamental value to the office market given its credentials and the leasing climate.
“With some refurbishment to the more-tired fitouts on some floors, the building would shape up well and with the office market in the CBD showing very low vacancy rates, this is perhaps where the real value lies.
“We haven’t seen a softening of rental values and trends suggest that the leasing market will remain resilient.”
