Snapshot - Grafton Sales
Jul 19, 2016
The suburb of Grafton is one of Auckland’s oldest suburbs. With a strategic central location, it is also one of Auckland’s most convenient. It is adjacent to Auckland’s CBD and is bordered by other desirable Auckland suburbs such as Parnell, Newmarket, Mt Eden and Epsom. The convenience of this centrally positioned suburb is further highlighted by its multiple interchanges with the Southern, Northern and North Western motorways potentially making it the most well connected suburb in Auckland.
Despite it’s very central position and well connected nature, Grafton has often been considered a secondary location, however the results of a number of recent transactions indicates this is changing and the gentrification of Grafton is well under way.
Over the last year Grafton has seen a further 2.5 percentage point fall in commercial office vacancy to 13%, a marked improvement from 21% in 2013. For the second year in a row there was no vacancy within the precinct’s highest grade stock and the reduction in the overall rate therefore was as a result of uptake within B and C grade space, notably at 160 Grafton Road where Engineering and surveying firm Terra Consultants and software company WEX New Zealand have, between them, taken leases over 2,700m2.
This pressure on the supply of space in Grafton resulted in an upward trend in commercial rental rates in the suburb with secondary quality office ranging from $200 - $280/sqm and prime quality office $280 - $350/sqm, according to Bayleys latest research report on City Fringe leasing <click here for more>
Further compressing this vacancy rate, much like it’s neighbouring suburb Eden Terrace, is the removal of commercial office floor area for conversion into residential apartments. A prime example of this is Out Source Tower at 44 Khyber Pass Rd, which is in the process of having it’s 9,400sqm (approx.) of floor area converted into residential apartments.
As a result of such activity, the demand for well-positioned Mixed Use zoned land in Grafton is now regularly achieving land rates in excess of $3,000 psm and in the case of the former Grafton Oaks Hotel site up to $5,056 psm. The sale price of $15,200,000 was achieved for this strategically located 3,006 sqm site opposite the Auckland Hospital, with a resource consent in place. These sales are no doubt being influenced by the fact that the majority of the suburb lies within the highly sought-after Auckland Grammar school zone and being in close vicinity to the Auckland Hospital, Auckland University, CBD and motorway systems.
The City and Fringe Team has sold over $35 million of properties in Grafton since 2013 and have a few more exciting opportunities for sale in the coming weeks, such as the below property:
15 Nugent Street <click here>
Grafton Warehouse on Mixed Use Land
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• Under-developed 1,988m² of high profile Mixed Use zoned land in Grammar Zone
• High-stud industrial building of approximately 939m² with 30 car parks
• Holding income of $162,000 + GST p.a. with 12 month termination clause
• Favourable Proposed Auckland Unitary plan zoning provides big upside (max height 20.5m)
• City fringe sites as good as this are rare and tightly held - secure this while you can!
See below a selection of sales concluded by the team as well as a few other notable deals from the area:
Previous Market Commetary: Brixt