Commercial -
A nine-storey landmark office tower on a high-profile corner site in the Palmerston North CBD has come to the market for sale as its long-time private syndicate owners look to release capital.
The mixed-use commercial asset at 66 The Square, at the junction with key arterial Fitzherbert Avenue, comprises a podium and tower and is one of just a few high-rise developments on the Square. It offers four ground-floor retail tenancies, hotel operator-managed short stay accommodation units on levels 2-5, commercial offices on the podium level and levels 6-9, along with secure basement carparking for 18 cars.
The building was constructed in 1978 and extensively refurbished in 2008, with seismic strengthening later undertaken in 2015 to 67 percent-plus new building standard. The retail component totals 738sqm, there’s 2,553sqm of office space, and the hotel occupies 1,698sqm - all set on 1,012sqm of prime land zoned Inner Business.
At street level, the four retail tenancies are fully occupied and include an audiology health business, two restaurants, and a massage therapist. The accommodation component is leased to Quality Suites, part of Choice Hotels, with the 40 well-appointed and spacious studio, one- and two-bedroom serviced apartments popular with the corporate and family market. The office floors are of a very high standard and offer a mix of open-plan areas, private offices, kitchenettes, and shared common areas, with expansive views from each tenancy.
The mixed-use asset provides a spread of risk across asset classes with multiple occupiers on varying lease terms. There are currently 12 active tenancies, with three vacancies on the office levels. There is a net passing income of $718,762 plus GST, with significant upside to be realised once the current vacant space is leased, with an assessed potential net income of more than $988,000 when fully leased.
The property is being marketed by Mark Sherlock of Bayleys Wellington Commercial and Karl Cameron, Bayleys Manawatū, with tenders closing Wednesday, 29th October.
Sherlock says a private syndicate has owned the property for more than 12 years, and members are genuinely motivated to sell.
“The property is a standout in the Palmerston North market, and it’s on the preferred side of The Square, with the main entrance to The Plaza Shopping Centre a couple of doors down.
“The building has been maintained to high standards and provides high-quality accommodation across retail, hotel and office sectors.
“Location-wise, this is optimal real estate being just a short walk from the city’s amenities, Victoria Esplanade Gardens, Manawatū River Pathway, the New Zealand Rugby Museum, and Lido Aquatic Centre, which underpins the hotel’s popularity and ongoing patronage.”
There’s robust business confidence and good demand for commercial property in the city according to Cameron, who points to major infrastructural and private/public investment in the wider region as a driver for investor interest.
“This is a go-ahead regional hub with a strong local economy. There’s been a massive investment from Mercury Energy’s Turitea wind farm to the recently opened important freight link Te Ahu a Turanga – Manawatū Tararua Highway, between Ashhurst and Woodville.
“There’s new residential development earmarked across the city, and the council has a thoughtful Future Development Strategy for planned growth over the next 30 years.
“This underpins the desirability and viability of good quality commercial assets, with the subject property on The Square considered prime real estate and expected to attract attention from astute and forward-thinking investment entities.”