A hotel conversion or redevelopment with a taller building are among options mooted for a five-level office and accommodation block for sale next door to Wellington’s new convention centre.
Known as City Centre House, the Wakefield Street property’s first four floors offer a mix of retail showroom and office space, while the top floor houses 13 apartments run as a hotel.
Two office floors are leased as character workspaces. These floors plus the penthouse apartments generate an annual net rental return of approximately $310,000 plus outgoings and GST.
The property has an appraised potential to return a rental of nearly $900,000 plus outgoings and GST when fully occupied.
New owners have the chance to add value by installing new tenants in more than 1,500 square metres of vacant office space on levels two and three, plus a ground-floor gym area.
Positioned beside Wellington’s new Tākina convention centre, and a few minutes’ walk from Te Papa and the waterfront, the site is also seen as ripe for a full-scale hotel conversion amid an acknowledged accommodation shortage in the capital.
The existing building height limit allows for a taller building of up to 27 metres. This is set to rise to 42.5 metres under Wellington City Council’s proposed district plan – maximising the potential to extend or redevelop with an upscaled tower.
Any future use is assured of huge exposure and profile by some 36 metres of frontage to busy Wakefield Street.
The freehold land and building at 181 Wakefield Street, Te Aro, Wellington, are being marketed for sale by Bayleys Capital Commercial and MC Property.
The site will be sold by way of a tender closing on Wednesday 6 December.
“This property presents a golden opportunity to significantly enhance the investment value of a five-storey office and accommodation building in a prime location,” said Mark Hourigan, Managing Director of Bayleys Capital Commercial.
“With a shortage of accommodation in the CBD, this building is ripe for a hotel conversion, or expansion of the 13 existing penthouse apartments. The 900-square-metre site has a generous height limit. This would accommodate development of the airspace to create a significantly larger lettable area, with upper floors benefiting from potential harbour views.”
In 2019, the last year of available data, the Wellington region reported 3.4 million guest nights, not including a further 600,000 people who stayed in peer-to-peer type accommodation such as Airbnb.
Bayleys Wellington Commercial Sales Partner Grant Young said a report commissioned by economic development agency WellingtonNZ confirmed the city faced a commercial accommodation shortage over the next four years. This was fuelled by demand generated by the new convention centre and the return of international tourists, he said.
“This is a continuation of a trend seen since 2001, by which Wellington city accommodation supply has failed to keep pace with growth.
“Tākina is expected to host up to 65 multi-day events a year with an average of 550 delegates needing accommodation, with single-day events adding further to central city accommodation demand,” Young said.
Originally built in the 1930s and retrofitted in 2006, 181 Wakefield Street offers a total net lettable area of some 3,658 square metres with generous ceiling heights and good natural light. The ground floor contains a showroom/office tenancy leased to Fuji Xerox and, at the rear, a gym with its own bathroom facilities.
The office floors each provide character space with existing fitout and men’s and women’s toilets.
The 13 penthouse apartments are a mix of 10 studio units, two one-bedroom units and one two-bedroom unit. All have decks off the living areas and have been fitted to be run as a hotel.
The Wakefield Street site sits within Wellington’s Central Area zone. Surrounding development is typified by buildings combining upper-level offices with ground-floor retail, plus multi-level apartment complexes. Combined with the art, culture and business activities centred around Tākina and Te Papa this makes for a dynamic and diverse neighbourhood.
The waterfront and Courtenay Place are within a short walk along with an array of dining and shopping options, complemented by green space in nearby Waitangi Park.