Three office buildings pivotal to the effective running of state-owned enterprise Airways Corporation of New Zealand’s Christchurch-based operation are for sale as a portfolio.

Spanning approximately 1.73 hectares held in two titles and zoned Commercial Office under the Christchurch District Plan, 20-26 Sir William Pickering Drive in Burnside lies within the Canterbury Technology Park close to Christchurch Airport, around 10 kilometres northwest of the CBD.

The comprehensive office complex with a net lettable area of circa-8,960sqm plus 237 car parks is fully leased to Airways Corporation. It comprises the Andy Herd Building (AHB) constructed in 1988, the Airways Development Centre (ADC) built in 1992 with an extension at the rear completed in 2006, and the Air Traffic Control (ATC) building, which was completed in 2019.

The state-of-the-art two-storey ATC facility is a base-isolated Importance Level 4 (IL4) structure housing a flight control centre that forms part of Airways’ national radar and flight control network, engineered to maintain operational continuity in the event of natural or other disasters.

This building consists of a ground floor services level with generators, plant, data equipment and storage, and an upper level providing staff accommodation, amenities, offices and the Airways operations rooms.

All buildings are well-maintained and cater to the needs of Airways as the long-term tenant, returning a net operating income of $2,907,570.57 per annum, with a weighted average lease term (WALT) of 16.8 years across the three buildings and two leases.

The Airways-occupied portfolio is for sale by tender closing Thursday 1st May, unless sold prior, through Jesse Paenga, William Wallace, and Graeme Donaldson of Bayleys Christchurch, and Mike Houlker, Bayleys Auckland Central.

Paenga, Bayleys director of South Island capital markets and corporate leasing, says the complex represents a sought-after investment opportunity, offering a stable and long-term income stream with the opportunity to add value to the older AHB asset in the medium term.

“The modern, best-in-class ATC building, built by Leighs Construction, was the first to be designed to the new US standard of post-event operational resilience, and when it opened, was the most seismically resilient building in New Zealand.

“This adds tangible value to the overall portfolio as a flagship example of a resilient building engineered to ensure continuity of service in times of disaster.

“Add-value investors will also recognise the potential benefits of upgrading the late-1980s’ AHB component to enhance the overall offering and, additionally, the two generously sized titles could be split, offering another avenue to add value.”

Airways is one of New Zealand’s most established and financially stable entities, employing around 800 staff nationwide in highly skilled and technical roles managing 30 million square kilometres of airspace, with Christchurch its largest base.

Institutional buyers, high-net-worth individuals and private investors are all active in the current market, says Wallace, Bayleys general manager South Island commercial and industrial, and this portfolio stands out in a number of ways.

“There’s a scarcity of real estate assets leased long-term to government-linked tenants in Christchurch given the consolidation of central government in Wellington, so the occupier covenant is quite unique in itself.

“We haven’t seen institutional investment grade stock with such a strong tenant covenant and WALT in the Christchurch market for some time, hence this offering will be a good test of the market post the latest OCR cut, and in view of the fact that the real estate clock is resetting.”

The property has strong connectivity to key transport routes, including major arterial roads providing direct access to the CBD and other key areas of the city.