A rare portfolio of 10 ground lease interests across the tightly held inner-city suburbs of Thorndon and Kelburn is being offered for sale, presenting investors with an opportunity to secure land-based investments in some of Wellington’s most established locations.
The portfolio is underpinned by prominent lessees including Victoria University of Wellington, Queen Margaret College, and Molesworth Apartments Holdings Ltd, spanning residential, education, childcare, and apartment uses.
The interests are held under perpetually renewable ground leases, with rentals reset to market upon renewal.
The total land area of the portfolio measures 10,634sq m, and the net annual income is $1,153,187 plus GST (if any). Rents on individual properties range from $42,602 up to $305,250 plus GST.
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The weighted average lease term to expiry across the portfolio is 11.1 years, and there are rent reviews every 14 years on renewal.
Investors may acquire individual interests, any combination of properties, or the portfolio as a whole.
Colliers Brokers Richard Findlay, Alistair Robertson, and Matt Sisson have been exclusively appointed to market the properties via tender, closing at 12pm on Wednesday 18 November.
The Victoria University of Wellington holding comprises six residential ground lease interests across Clifton Terrace and Talavera Terrace in Kelburn, with a combined underlying land area of 2,727sq m.
Each interest is held under the portfolio’s 14-year perpetually renewable ground lease structure, with ground rent reset to market on renewal.
The Queen Margaret College holding comprises three ground lease interests at 5 Katherine Avenue, 15 Fitzherbert Terrace, and 53 Hobson Street in Thorndon, providing a combined 6,938sq m of underlying land.
The 15 Fitzherbert Terrace property contains a relatively modern childcare centre, while the other two sites form part of the school’s established local presence.
A multi-storey residential tower at 123-125 Molesworth Street, Thorndon, sits on 969sq m of land and is leased to Molesworth Apartment Holdings Ltd. Formerly an office building, the property was later converted to apartments.
Findlay, Managing Director of Colliers Wellington, says ground lessors’ interests provide direct exposure to the underlying land, while buildings and improvements are owned, insured, and maintained by the lessees, making them highly attractive for buyers.
“These interests are tightly held, with ownership typically concentrated among government, iwi, charitable trusts, educational institutions, institutional owners and private investors seeking long-term wealth preservation,” Findlay says.
“This limits the availability of ground lessors’ interests to the investment market, particularly opportunities offering this level of scale. This structure offers passive income with limited day-to-day management requirements and reduced exposure to building maintenance, capital expenditure, vacancy, and leasing costs compared with conventional commercial property ownership.”
Robertson, Investment Sales Broker at Colliers Wellington, says Kelburn and Thorndon are two of the capital’s most appealing suburbs.
“Connectivity is a key theme of these locations, with both the public transport network and motorway readily accessible,” Robertson says.
“Properties in these locations are tightly held, meaning this is a unique way for buyers to acquire a stake in these sought-after spots that are so close to the CBD.”
Sisson, Investment Sales Broker at Colliers Wellington, says there is variety across the portfolio with education and residential interests available.
“Ground lease purchasing opportunities are seldom found in Wellington with limited evidence of comparable offerings in recent years,” Sisson says.
“Given buyers have the flexibility to acquire individual leases or multiple interests, this offering will appeal to a wide buyer pool.”
- Supplied by Colliers
