A substantial commercial property on the top retail destination of Ponsonby Rd is for sale, with its neighbour the Vinegar Lane development providing added value and interest.

The site is 54-60 Ponsonby Rd, and comprises a two-level 1273sqm building and a large street frontage of 30m that looks onto Western Park.

Retail units are located on the ground floor, with office space on the first floor and at the rear of the site, with 10 off street car parks behind the building.

The property is part of Colliers International’s New Zealand Portfolio campaign and is being marketed for sale by tender by Tony Allsop and Will Dromgool.

Offers close October 16 2014.

The market net rental income is more than $500,000, with six office and retail tenants on varying lease terms.

Allsop said that the market is likely to view the property as an add value or redevelopment opportunity, although it would also make an excellent investment.

“This is a large 999sqm parcel of land in an area which is likely to experience sharply rising property values and rents as a result of the Vinegar Lane project getting underway. This will prompt a general uplift in the calibre of occupiers along this part of Ponsonby Road and will be reflected in increased rental rates,” Allsop said.

“The most obvious and immediate opportunity to enhance the value captured from this property would be through examining the current lease structure and managing it in order to increase the total income and WALT and adding a floor to the building.”

Given the property’s prime location and substantial land holding, Dromgool expects developers to show interest.

He said that there is the opportunity for a developer to incorporate a mix of shops, offices and apartments.

More immediate refurbishment and reletting as modern and office space is also an option, as some tenants are on monthly leases and with redevelopment clauses.

Ponsonby Rd provides a good retail mix aimed at high-end shoppers together with high quality small business premises, Allsop said.

The road has an excellent leasing history, and benefits from easy access to the CBD along with proximity to a large and affluent residential catchment.

“Properties along Ponsonby Road are tightly held by a small number of investors. They’re highly sought after and hold ‘trophy’ value,” Allsop said.

In addition to the Vinegar Lane development, which includes a Countdown supermarket, offices, retail space and apartment buildings, the Hopetoun St ridge development is changing the local landscape.

“Another noteworthy recent development is Ponsonby Central, which has proved very popular among occupiers and shoppers, with a great range of retail and food offerings making the development a destination in itself,” Dromgool said.