Tasty investment bite in the city
A unit in central Wellington which is home to Felix Cafe is up for sale.
The small space on the corner of Wakefield and Cuba streets provided a rare opportunity to purchase a commercial property in the tightly-held central Wellington spot.
The 182-square-metre building has been home to Felix Cafe since 1998.
Colliers International broker Peter Wilkin, who is marketing the property with his colleague Georgina Young, said the cafe operators had just signed a new lease for the space for another nine years with a right of renewal, providing the potential for the cafe to take a total term of 12 years.
‘‘Felix is a longstanding institution in the lower Cuba St precinct with a proven operator at the helm,’’ Wilkin said.
‘‘It’s a constantly busy spot, filled with local office workers, tourists and students.
‘‘The fact that the cafe has signed up for a long extension to its lease term shows its commitment to this location, and also makes for an excellent investment proposition.’’
Young said the property’s prime location – a stone’s throw from Civic Square, the Michael Fowler Centre and the old Town Hall – completed the package for investors.
‘‘The combination of a highly visible corner location in a high foot and vehicle traffic area, along with a great tenant and lease term, means this property ticks all the boxes when it comes to the fundamentals investors are looking for.’’
The cafe has access to an outdoor pavement area on Cuba St, and a pedestrian thoroughfare through to Bond St gives it exposure on three sides.
The cafe was on the ground floor of a high-profile building, which was a landmark in the local area, Young said.
The Felix Cafe unit sale comes at a time when commercial property is coming on to the radars of a bigger range of investors, Wilkin said.
‘‘The current interest rate level means more investors are taking advantage of low borrowing costs to diversify their investment portfolios,’’ he said.
‘‘Cash in the bank looks much less attractive with interest rates so low at the moment, so we’re seeing buyers come to us to find good-quality commercial properties which can offer a very good income margin over cash investments.’’
Good-quality unit titles were worth considering because of the affordability when compared with entire commercial buildings, Wilkin said.
Young said units gave people an opportunity to access the commercial market, which was often out of reach for individual investors.
‘‘Many commercial properties are not accessibly priced for individual investors, who might already own residential investments but want to diversify,’’ she said.
‘‘Unit titles offer a way for individuals to buy a slice of a commercial building at much more affordable price.’’
Wilkin said that with interest rates looking likely to stay low for some time, it had never been a better time to buy prime unit titled commercial investments.
‘‘Units which offer a prime combination of location and tenant such as Felix Cafe don’t come up very often, so we are expecting plenty of interest in this property,’’ he said.