Commercial redevelopment mooted for substantial CBD location
Apartment, hotel or office redevelopment mooted for substantial CBD location
One of the biggest commercial property blocks in CBD Tauranga has been placed on the market for sale.
The 2449 square metre site on the corner of Spring and Durham streets, complete with two large commercial buildings, has been earmarked for either expansion or total redevelopment.
The property has a rateable valuation of $5.46million. Existing tenants within the block include education service Te Wanananga o Aotearoa, and homeware and furnishings retailer Tres Chic. The Public Trust has just vacated the ground floor of the building.
Te Wanananga o Aotearoa has leases expiring in December 2015 with a further one year right of renewal with notice to be given to extend for a further year to 31 December 2016 by 31 December 2014. Tres Chic has a lease expiring this year with one further three year right of renewal subject to a demolition clause. Combined, the two tenants generate rental income of more than $379,000 per annum.
The property is being marketed for sale through real estate agency Bayleys through a tender process closing on June 19. Bayleys Tauranga salesperson Rob Pinny said the offering consisted of four parts – the main building housing 1790 square metres over three floors, an adjacent annex building of 200 square metres, a 139 square metre retail store, and on-site car parking for 45 vehicles.
“The main building was constructed in the 1950s and was typical of its time – consisting of reinforced concrete, concrete block exterior walls, concrete beams, and concrete flooring, while the smaller annex structure was built approximately five years ago. The larger building is in need of a refurbishment however to bring it up to modern standards,” Mr Pinny said.
“It is one of the biggest blocks of land and buildings in Tauranga CBD. Initial feedback from potential buyers who have looked at the site are that it could sustain total redevelopment into a mixed-use location – with retail units at street level, new commercial premises immediately above, and with the option of an apartment complex on the upper floors,” he said.
“Anything above the fourth or fifth storey would command expansive views of the inner harbor and the CBD, and with careful design, the number of car parks could be expanded. With dual street frontage of between 49 – 51 metres, the location has the potential for two entry/exit points for vehicles rather than the existing single entry point”
A development concept plan for a new four storey 8,482 retail and office complex – complete with 82 covered car parks - has been drawn up, and is available for viewing by potential purchasers. The report comes with a traffic impact report and resource consent from Tauranga City Council.
Mr Pinny said another developer spoken to by the agency was looking at the option of building a new 220 room four to five-star hotel. The benefit of having sitting tenants would allow for necessary planning consents and approvals to be granted during the interim period.
“Tauranga is lacking a major branded accommodation provider at the top end of the market, and I can see the logic of building such an amenity to service the corporate sector operating in the central city,” he said.
“As with the apartment proposal, hotel rooms on the upper floors would have excellent views over the city – and all just a few hundred metres walk from the social infrastructure which hotels seek to be associated with.
“It has been highlighted that, from a hotel operator’s perspective, the dual street access would suite a covered portico type structure and allow for easy handling of tour buses,” Mr Pinny said.
Mr Pinny said the council’s upgrading of Tauranga’s CBD over the past six years had enhanced the character of the downtown/midtown shopping precinct – with improvements made to roading, footpaths and improving the environmental impact of a growing commercial centre which includes the new 8,000 square metre call centre and head office for Trustpower in close proximity to this site.
“Often with central city refurbishment it’s a ‘Mexican standoff’ between public and private enterprise. In this case the council has taken the lead to regenerate the area, and now it looks likely that investment will bring in considerable private money – so ultimately it’s a win/win scenario for businesses in Tauranga.
“Any combination of an apartment or hotel redevelopment with a mix of retail and office would see a significant addition to the inner-city’s skyline and would compliment the modernisation seen around the surrounding area over the past 12 years.”