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Accommodation Redevelopments Mooted As Two Large City Office Blocks Go Up For Sale
Multiple accommodation options have been mooted as the most likely redevelopment potential for one of the biggest office blocks in New Plymouth’s central business district which has been placed on the market for sale.
The multi-level office block at 167 Devon Street West is currently 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 – with a covered walkway linking them together. One block features an eight-storey tower constructed in 1983 delivering 2,976 square metres of net lettable floor area, while the other street-facing block is a purpose-built three-storey premises constructed in 1974 and 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 – nine of which are under cover.
The premises are tenanted by Austrian-based energy company OMV which produces 85 percent of New Zealand’s gas supplies. The office buildings house some 300 staff managing OMV’s Maui and Pooka gas field extraction activities, and the company’s associated pipeline and production assets.
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 $978,011 plus GST and outgoings.
The freehold property at 167 Devon Street West is now being jointly marketed for sale for $10 million plus GST (if any) through Bayleys Taranaki and Bayleys Tauranga. Salespeople Iain Taylor, Darryl Taylor and Brendon Bradley said that with its current price tag and rental income, the property delivered a high yield of 9.78 percent.
Iain Taylor said the that because of the property’s size, scale and configuration, its most likely future use would be providing accommodation – either converted into a hotel, apartments, or as a self-contained retirement village. He said that interest had already been received from a hotel developer who had proven experience converting office space into hotel accommodation in other New Zealand cities.
“The Devon Street West property’s classification under New Plymouth District Council’s plan is a Business B Environment Area zoning – which allows for a wide range of commercial redevelopment options,” Taylor said.
“With the likely departure by tenant OMV at the conclusion of its current lease, from a longer-term perspective, the office complex is most likely to be repurposed into some iteration of commercially-operated accommodation.
“Under that auspices, the land and buildings at 167 Devon Street West could easily sustain a hotel – either completely converted to guest rooms, or with a mix of residential apartments in its composition. The upper levels of the taller of the two tower blocks deliver unobstructed 360-degree views out to the coastal and sea vistas, or inland to Mount Taranaki.
“New Plymouth has few large accommodation providers, so there is certainly leeway for more room inventory in the market. The biggest commercial accommodation operator of its type in town at the moment is the Novotel-branded property in the north of the CBD.
“The addition of another branded hotel to the market would allow New Plymouth to compete with other provincial centres for meeting and conference business which the city has not previously had the hotel room capacity to bid for.”
Further supporting the line of converting the site into an accommodation focus, Darryl Taylor said vehicle access from both Devon Street West and Dawson Street would enable large tour buses to easily enter and exit the property, or for the free-flowing movement of residents’ vehicles.
“The size of this site, its CBD location, and the building infrastructure could well be attractive to New Zealand’s bigger retirement village operators – such as Ryman Healthcare, Summerset, Metlifecare or Oceania - to establish or expand their footprints in the sector in Taranaki,” he said.
“Both Ryman Healthcare and Summerset already have sites running in New Plymouth – Ryman at the Jean Sandel Retirement Village near the city’s Taranaki Base Hospital, and Summerset at the Mountain View Retirement Village in the city’s south-eastern quadrant.
“However, the population age demographic – in Taranaki as it is throughout New Zealand – is showing that there will be an increasing number of people entering the 65-plus age bracket for the next few decades, with many of them opting for the convenience of living in large-scale retirement villages.”
The three-storey block in the Devon Street West property is built with reinforced concrete foundations and flowing with concrete columns and aluminium joinery. The second tower on site is built of similar materials, and features a lift and internal staircase.
Bayleys Real Estate
New Zealand
Bayleys is New Zealand's largest full-service real estate company. We offer expertise in the marketing and sale of a wide range of property, including residential real estate, farms and lifestyle blocks, and commercial and industrial property. This includes tourism and business sales such as hotels and motels. We also cover the real estate markets in Fiji and other Pacific Islands.
Bayleys also provides a complete property and facilities service including property management and valuations teams focused on achieving both Owner and Tenant satisfaction.
No other real estate company can match our breadth of coverage across all market sectors throughout New Zealand.
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