Investors in the pipeline as oil and gas company’s head offices go up for sale
One of the biggest office blocks in New Plymouth’s central business district – occupied by a global oil and gas producer - has been placed on the market for sale.
The multi-level office block at 167 Devon Street West is occupied by the New Zealand operations of international energy firm OMV which is heavily involved in oil and gas exploration and extraction in Taranaki.
The property consists of 5,096 square metres of offices spread over two blocks. One block features an eight-storey tower constructed in 1984 delivering 2,976 square metres of net lettable floor area, while the other block is a purpose-built three-storey premises constructed in the 1970s delivering some 2,120 square metres of net lettable floor area.
Both buildings sit on 3,069 square metres of freehold land. The taller structure has a new building standards rating of 75 percent, while the horizontal premises has a new building standards rating of 74 percent. Together, they have access to 37 car parks on the site.
The premises was previously occupied for 40 years by Shell Todd Oil Services (STOS) which operated as a joint venture entity with Royal Dutch Shell. some 300 staff work within the office structures which are joined by a covered walkway.
Austrian-based OMV bought out the STOS/Shell joint venture’s operational assets last year – including its tenancy at 167 Devon Street West and all staff working there, along with the Maui and Pohokura gas field extraction business, and associated pipeline and production assets. OMV produces 85 percent of New Zealand’s gas supplies.
OMV has a current lease on the Devon Street West office blocks running through until 2023, with two further five-year rights of renewal, generating an annual net rental of $910,834 plus GST and outgoings.
The freehold property is now being marketed for sale by tender through Bayleys Real Estate, with tenders closing at 4pm on June 27. Bayleys Taranaki salespeople Iain Taylor and Alan Johnston, along with Bayleys Tauranga salesperson Brendon Bradley said that with its size and prominent location, the Devon Street West property was one of the New Plymouth’s most instantly recognisable commercial buildings.
“There are a multitude of pathways for the future of this property given its Business B Environment Area zoning under New Plymouth District Council’s plan,” Mr Taylor said.
“Most obviously, as the cornerstone of New Zealand’s oil and gas sector, OMV can continue as the sole tenant of the site in what is New Zealand’s foremost fuel production province. There are few, if any, other commercial office sites of this size in New Plymouth.
“From a longer-term perspective, the linked office complex could be repurposed into a hotel – with the upper levels of the tower block delivering unobstructed
360-degree views out to the coastal and sea vistas, or inland to Mount Taranaki.
“The inter-connecting walkway could also be reformatted to enable the tower to operate as a hotel, and the street-frontage building to continue as a commercial office premises. With vehicle access from both Devon Street West and Dawson Street, both entities under this possible format could operate independently of each other.
“Or opting for ‘all-in’ business model, both buildings could be refurbished into one commercial accommodation venue. Again, the benefit of having dual vehicle access points would enable guest parking to be easily delivered.”
Mr Bradley said former long-term tenant Shell Todd Oil Services had spent considerable sums regularly upgrading its offices within 167 Devon Street over the four-decade occupancy.
“As a result, the open plan workspaces, meeting rooms, and staff amenities are of a modern and well-presented standard. Meanwhile, the tower block was repainted and refurbished only a few years ago as part of the long-term maintenance programme,” Mr Bradley said.
“The tower block structure contains OMV’s reception area and commercial-grade staff cafeteria. The top floor is fitted out to a superior standard including a high-stud ceiling.”
Mr Johnston said the flexibility of the property’s Business B Environment Area zoning – allowing for potential residential use close to New Plymouth’s central city hub – opened up the possibility of the site potentially being converted into a large retirement village.
“With stock exchange listed retirement village operators Ryman Healthcare and Summerset already present in New Plymouth, the size of this site, CBD location, and the building infrastructure already in place, could well be attractive to the likes of Metlifecare or Oceania to establish their footprints in the sector in Taranaki,” he said.