A German investment fund has paid £74m for Auckland’s landmark Lumley Centre office block in what is claimed to be New Zealand’s biggest commercial deal for more than six years.
One of only five premium office towers in the North Island city, the Shortland Street building was sold by Australian-based Dexus Property Group after what is described as a “fierce” bidding process jointly managed by real estate agencies Knight Frank and Jones Lang LaSalle (JLL). The new owner is Deka Immobilien.
The global investment fund has property assets of almost £13bn spread across 22 countries. This is Deka Immobilien’s first acquisition in New Zealand.
Built by family-run developer, Mansons TCLM, the 15-storey Lumley Centre is one of Auckland’s most recent and impressive additions to the local office market. With flexible floor plates of almost 14,000 sq ft the building has a total of 209,600 sq ft of leasable Grade A office space.
Off-loading the Lumley Centre as a non-core asset, Ross Du Vernet of Dexus said: “We are very pleased to capitalise on the superb strength of the New Zealand economy for our investors”.
With the potential of producing an annual income of £5.25m, the tower is currently 93 per cent let with tenants that include lawyers Simpson Grierson and Minter Ellison Rudd Watts, the global investors Macquarie Group and Lumley General Insurance.
Knight Frank’s managing director, Layne Harwood, said the sale signalled strong demand, particularly from overseas investors, seeking exposure to the New Zealand office market.
“Deka, in acquiring this flagship premium office building beat seven competitive bidders in the process,” he added, “all of whom were keen to profit from Auckland’s impressive rental growth and strong investment fundamentals.”
The sale brochure described the building as: “Situated in an elevated position in the heart of Auckland’s central business district, the Lumley Centre features uninterrupted views over the Waitemata Harbour, with the two top floors benefitting from external decks with far-reaching views of the city and Hauraki Gulf.
“The building has an excellent history of attracting and retaining tenants. Its rental growth and capital value is supported by the Auckland office market in which premium grade office space accounts for approximately eight per cent with forecast supply is limited”.
The last time one of the city’s five high-rise office towers came on the market was in 2005. “Now that the country’s economy is growing again”, explained JLL’s New Zealand managing director Nick Hargreaves, “and with Auckland’s infrastructure upgrades underway the city is set to become one of the most attractive business centres in the world.
“Put these factors together, alongside low office vacancy rates — currently 3.8 per cent and 4.3 per cent across premium and A-grade stock — and no wonder Auckland offers such a positive outlook.”
