Sydenham office building with upside

The Property
• Well-appointed 649sqm fully-leased two-level office building fronting Carlyle Street, plus adjoining vacant 389sqm converted warehouse to the rear
• post-earthquake strengthened to 67% and 100% respectively
• 1,439sqm site with 27 car parks
• 15 months remaining on existing leases
• Net holding income $91,954 + GST and outgoings
• Zoned Industrial-General

Quick Look
• National Total Property marketing campaign – by auction
• Interest generated via Bayleys’ databases, Total Property magazine, media release
• Enquiry from mainly local investors and owner-occupiers
• SOLD in negotiations post-auction for $1,675,000
• Purchased by local buyer

The Story

Brian Cresswell, Bayleys Canterbury said the city fringe office market is going through a phase of readjustment in Christchurch and said finding buyers for vacant office property, or those with expiring leases, is proving a little sticky.

“Sydenham has some great fundamentals for office occupiers, but tenants are being enticed into new stock in the CBD leaving the secondary fringe market playing catchup, while owner-occupiers are showing some caution in these uncertain economic times.

“This is a great property with big upside – particularly if the rear component which is now configured as office space is reinstated as warehousing.

“That’s when the offering would make sound sense in the current market with retailers and those businesses needing inventory storage for e-commerce models actively looking for well-located space.

“Arguably, the best value could be unlocked by removing the suspended ceilings and reinstating roller door access to the converted back property as there is minimal warehouse vacancy in Sydenham.”

Despite an active auction campaign and best efforts from the Bayleys Canterbury team, Brian said the eventual sales’ price was somewhat below expectations – but the market had spoken.

“Given the short-term leases and vacant rear tenancy, the new owner saw value at that level and in selling the property, my vendors can move on which is important to them at this time.”

Vendor Comment

Vendor spokesperson Kath Sullivan said the property had served them well in the 20 years they’d owned it, but the time was right to pass it on to a new owner.

“We were approached by Brian about selling the property and although we realised that with the back component of the property vacant, we would probably not get the price we hoped for, we still went ahead hoping to find the right buyer so we could move on.

“Brian approached the neighbours directly, but none were keen at this time, so a full marketing campaign was commenced.

“On auction day, the party that was most interested was unable to bid due to having insufficient time to get a LIM or valuation for the property, however, we entered into negotiations and signed a contract that day.”

Kath says as the major stakeholder in the property she did not wish to “give it away”, and while the sales price was below expectations, the decision to sell had been made so she was happy to conclude the deal.

“While we had been very generous with rent reductions in the past and been flexible with tenants, my daughter and son-in-law are approaching retirement and were concerned about the cost of outgoings should we not find new tenants for the property.

“So, we are pleased to have sold the property and send the new owner our best wishes.”

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