The expansive central city site housing a key Wellington bus depot has been put up for sale.

The high-profile more than 3,800-square-metre property on arterial Hutt Road, in Kaiwharawhara, is leased to Wellington City Transport (WCT), which is owned by Australasia’s largest bus network operator, Kinetic.

The depot is a vital hub for the company, which operates 132 buses under contracts with Greater Wellington Regional Council, moving more than nine million passengers a year.

The site generates an annual net rental return of $484,403 plus outgoings and GST from leases to the bus company plus operators of onsite signage. A significant additional improvements rental is also payable by the bus operator until 2030.

The main lease over the bus depot, workshop facility and large concrete yard runs through to 2030 with two further five-year rights of renewal. The lease agreement provides for two-yearly rent reviews to CPI plus two percent.

Bayleys salespeople are marketing the property as a prime city-fringe investment whose underlying landholding in a coveted commercial hub offers exciting longer term redevelopment possibilities.

The freehold land and buildings at 110 Hutt Road, Kaiwharawhara, Wellington, are being offered for sale by Mark Sherlock, Fraser Press and Liam Sherlock of Bayleys Wellington.

The property will be sold by way of a tender closing on Wednesday 24 September.

The approximately 1,472 square metres of buildings at the Hutt Road site are underpinned by some 3,843 square metres of freehold land. The buildings have an A-grade seismic rating of 90 percent of new building standard as assessed by a recent Detailed Seismic Assessment.

Mark Sherlock said buyers would recognise the property’s attractive investment fundamentals.

“These are underpinned by a long lease to the high-calibre tenant, part of a top international transport group whose New Zealand operations include urban buses in Wellington, Auckland and Christchurch, and school buses across the country.

“Longer term, the underlying value is very much in the land. A hefty expanse of flat, freehold land on a major thoroughfare at the CBD fringe is a rare commodity. The scale, location and profile of the site for sale – combined with flexible zoning – give new owners enviable future options for redevelopment,” Mark Sherlock said.

Press said high demand for the location could be seen in the calibre of neighbouring occupiers.

“This commercial precinct on the northern city fringe is home to the likes of Placemakers, Spotlight, Animates and Wellington’s BMW dealership – and the site for sale offers its own longer-term possibilities, including redevelopment for bulk-retail or perhaps a new dealership,” said Press.

The property is zoned Mixed Use under Wellington’s district plan. This provides for a myriad of compatible uses including residential, commercial, light industrial, recreation and community activities.

The existing two-level building encompasses a high-stud workshop with an enclosed canopy, two in-floor service pits, a purpose-built steam cleaning bay and offices.

Liam Sherlock said this was constructed in the 1970s and upgraded and extended in 2015 for use as a bus depot.

“This refurbishment included seismic strengthening, plus installation of the more than 2,700-square-metre concrete yard with security fencing and automatic gates.

“Forty-plus metres of frontage to busy Hutt Road makes for easy access for the bus fleet and assures the site of standout visibility.

“The position close to the intersection with Kaiwharawhara Road assures occupiers of superb connectivity with the nearby city centre, western suburbs, and across greater Wellington,” Liam Sherlock said.