Sir Bob Jones buys Kirks building

Last updated 13:36 23/11/2012
Kirkcaldie and Stains
SOLD: The Kirkcaldie and Stains store, the Forsyth Barr and Bayleys towers in Lambton Quay sold for more than $50 million.

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Sir Bob Jones has bought one of Wellington's most significant retail blocks - the twin Lambton Quay towers housing the Kirkcaldies & Stains department store.

His private investment company Robt Jones Holdings (RJH) paid AMP Capital Property Portfolio $50.5m for the Forsyth Barr and Bayleys towers.

The deal comes just four months after RJH bought the 14-storey Baldwin Tower on Lambton Quay for  $24.5m.

''The recent, heavily published suggestion that Wellington is in danger of becoming an economic backwater struck us as silly in the extreme,'' RJH Wellington Manager Sam Cooper said.

''It is certainly inconsistent with our own experience as the CBD's largest building owner given the steady demand we encounter for quality office space.''

The latest deal includes three buildings at 165 - 177 Lambton Quay, all of which had a seismic rating of 100 per cent of new building standard.

The Wellington properties were offered for sale by way of International Deadline Private Treaty.

CBRE managing director Ryan Johnson, who handled the marketing, said there were six offers from Wellington and Auckland investors.

This highlighted the continued demand for prime Wellington buildings in strategic locations.

''The combination of this and another sizeable, $50 million-plus transaction recently finalised in the CBD is a real tick of confidence in the Wellington market,'' Johnson said.

The block was a  distinctive mix of historic and contemporary architecture with the two modern towers built behind and above the old Kirk's facade.

Kirkcaldie & Stains had  6,617sqm of retail space on three levels and the two 11 level towers each had a lettable area of 4,884sqm.

CBRE senior managing director Brent McGregor said the sale showed there was increasing demand for seismically strong buildings.

Kirkcaldie & Stains has traded on Lambton Quay since 1868. The store's last major redevelopment was completed in the late 1980s when the two towers were built.

Based on the current net income of $4,434,546 per year, the sale to RJH was negotiated at an initial yield of 8.78 per cent.

''This income is underpinned by a weighted average lease expiry of 9.8 years so there is long term stability among the tenants in the complex,''  McGregor said.

Kirkcaldie & Stains, Quigg Partners and Bayleys Wellington are the major tenants.

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The department store's rent accounts for 48 per cent of the property's income with the balance coming from 27 separate tenants in the two towers.

The Golden Mile had some of the highest retail rents in New Zealand and shop space had always been in high demand, said Johnson

Contact Hank Schouten
Property reporter

- The Dominion Post


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