With commercial property investors actively returning to the market seeking well-located assets with sound tenant covenants and future upside, agents marketing a Freemans Bay office-warehouse building within a favoured mixed-use enclave are expecting solid interest from buyers.

The well-presented and functional two-level property at 41-45 Ireland Street has a stable leasing history and is currently fully-occupied by multinational tenant Vega Global NZ Limited, the largest audio-visual/IT solutions provider in the Asia-Pacific region.

There is a 4-year lease in place with a right of renewal taking final expiry out to mid-2030, and returning annual net income of $184,000 plus GST, with inherent fixed annual growth.

In recognition of the sought-after Business-Mixed Use zoning overlay that permits a broad range of uses and allows moderate-high density residential and commercial development, there is a termination provision in the lease that favours the landlord, providing options for prospective owner-occupiers or developers.

The 636sqm site has wide north-facing frontage to Ireland Street. The circa-1980s property has lettable floor area of 684.55sqm and has been assessed at 120-percent new building standard, considered A-grade in the market. There are multiple access points, including through a roller-doored loading dock, and 10 secure basement car parks. Office space is variously configured on the ground floor plus across a generous mezzanine, and the warehouse, which is currently used for goods storage, could be reconfigured as character office space in the future.

Damien Bullick and Alan Haydock of Bayleys Metro Markets team are marketing the property by tender closing Thursday 11th March, unless sold prior.

Bullick says with the cost of debt shifting downwards and new investors in the market seeking better returns than money in the bank, the subject property is exactly what clued-up buyers are on the hunt for.

“There is a scarcity of investment property available in the inner west frame of the city generally, and when you narrow it down to this select pocket in Freemans Bay, which has traditionally been the stronghold of long-term local investors, it’s a hens’ teeth opportunity.

“The wider Victoria Quarter precinct leverages good transport connectivity, innovative mixed-use development and a high level of amenity, and as this Ireland Street property is underdeveloped given the favourable zoning, a new owner could ultimately add value by going higher or via a full-redevelopment.”

Alternatively, it could be purchased with future occupation in mind by a forward-thinking business owner.

Haydock says the opportune Business-Mixed Use zoning designation gives a buyer many options down the line – whether that’s a full-blown residential project or a mixed-use one.

“Being so close to the green spaces of Victoria Park, having the convenience of the Victoria Park New World at hand, and with the Ponsonby Road retail and hospitality precinct a walk or easy bus ride away, residential living is a natural fit for this site.

“A buyer could sit on this offering as a classic bottom drawer passive investment with good income in place, comfortable that there is potential to add-value in time, or exercise the early termination clause to accelerate a redevelopment or conversion project.

“Whichever path is chosen, the fundamentals of the property and the pivotal location are assured and with the market resetting after an extended period of flux, this is an opportunity for a buyer to get a jump on the next real estate cycle.”