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Auckland CBD Land Holding Sells For $43.5million

Media Release
Date 10.12.2008

Big Auckland CBD Land Holding
Sells For $43.5million

One of the Auckland CBD’s largest remaining underdeveloped commercial land holdings sold at a mortgagee auction today for $43,500,000.

The sale of freehold ground lease interest in the 2.9139 hectare site, which has frontage onto Cook, Nelson, Wellesley and Sale Streets, attracted a huge turnout - with more than 300 people attending the auction in Bayleys central Auckland auction room.

Bidding opened at $25million and progressed in $1million and $500,000 dollar lots to $40million. Further negotiations then took place and the property came back on the market at $43,500,000 and sold to a bidder who did not wish to be identified.

David Bayley, executive director of Bayleys Real Estate, who handled the sale in conjunction with Robert Platt on behalf of the first mortgagee Westpac Bank, says it is Bayleys’ biggest ever auction sale in the company’s 35-year history.

“Despite the challenges the property market is currently facing, we had widespread interest in the site, and most of New Zealand’s most prominent property players were at the auction. We see a sale of this scale as a big vote of confidence in the
long-term future of Auckland’s CBD,” he said.

Mr Bayley says the property is one of the largest under developed sites remaining in single ownership in the Auckland CBD. It was for many years the depot for the Auckland City Council’s works department, and is currently occupied by a variety of tenants as well as being used for car parking.

The ground lease structure was created by the Starline Group in 2006. The land is leased to Victoria Quarter Depot Site Limited, associated with Australian developer Pelago. It owns the property’s buildings and development rights to the site and received resource consent in May 2007 for a development comprising 20 mixed-use residential and commercial office buildings with a combined floor area of just over 147,800 m².

Victoria Quarter Depot Site Limited has an initial lease term of 20 years and six months over the land, with 21-year perpetual rights of renewal. Robert Platt says an initial ground rent of $2,019,000 is payable from July 2009 which will be increased to $6,700,000 per annum from October 2012.

The Cook Street land holding is the third substantial Auckland CBD sale that Bayleys has been involved in this year. Earlier in the year, the agency sold the 3330 square metre Methodist Mission site on a prime Queen Street corner opposite Aotea Square and the 20-level former Simpson Grierson building at 92 Albert Street. These two buildings sold at a combined value of close to $70 million.

Bayleys has also recently sold a substantial industrial complex leased to APN Print in Great South Road, Manukau for $15.6 million.

“Admittedly the market has been a tough one this year and high value sales in particular have slowed, but for us it’s been nowhere near the gloomy scenario that’s been painted by some property industry observers,” says Mr Bayley.


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