A prime two-level tenanted investment property with some potential rental upside is for sale in central Hastings, and offers investors a passive asset to add to, or kickstart, a commercial portfolio.

Located at 506 Eastbourne Street West, the building known as Eastbourne House is occupied by two government agency tenants, with the Ministry of Social Development on the ground level, and Oranga Tamariki working out of the first floor premises.

Spread across two levels with a total floor area of 2,159sqm, the modern and well-presented building has good profile to the street and benefits from a total 48 off-street car parks, with 30 of these allocated under the current leases.

The property returns net annual income of $542,505.05 plus GST,

The Ministry of Social Development occupies 1,279sqm and its first term lease expiry is 30 April 2031, with an additional 3x3-year rights of renewal and regular rent reviews to CPI and market.

Oranga Tamariki has a seven-year lease out to 31 August 2028 , and also has 3 x 3-year rights of renewal and reviews to CPI and market.

The property is for sale by negotiation via Jodie Woodfield and Kerry Geange of Bayleys Hawke’s Bay.

Seismic strengthening in 2022 has taken the building to 100% new building standard, and Woodfield says extensive refurbishment works have been carried out, which enhances the property’s appeal in the investor market.

“The exterior of the property has been recently painted and a new balcony installed, while internally there’s been a comprehensive upgrade, including significant tenant investment, which has created a contemporary and functional office environment that meshes with occupier needs.

“The property has a covetable office-car park ratio and there are an additional 18 car parks excluded from the current leases which could be leased on the open market to provide a further-improved revenue steam for a new owner.

“There are also rental review mechanisms inherent in the two government leases which could also provide some future rental upside.”

Geange says the property is owned by a developer considering reallocating capital into other projects, and says the Hawke’s Bay region is attracting strong interest from investors, both locally and from further afield.

“Well-performing passive investment properties are receiving good enquiry and transactional activity, with Hawke’s Bay appearing to run its own race and defying the patterns seen in some other regions.

“Hastings city itself is gaining investor attention off the back of significant investment by Hastings District Council which has supported inner city enhancement programmes such as the completion of Toitoi – Hawke’s Bay Arts and Events Centre, and including the Municipal Building and a vibrant hospitality precinct.

“Much of this work was carried out prior to Cyclone Gabrielle, so while the council’s progressive economic development is now focusing on recovering and building back from that weather event, Hastings city centre is looking good and there’s a high level of amenity.”

Geange also says leasing activity has been encouraging in the city, and with any new office development likely to be some time away given current economic and construction fundamentals, well-maintained and centrally-located existing properties are likely to remain in demand.

Click here for more information on the listing.