Investment assets share a high profile
Retail properties in central Auckland and Takapuna have solid tenants
strategically located Auckland commercial property with a high profile to the State Highway 16 Northwestern Motorway and owned by the same family for more than 19 years is now on the market.
“This is an excellent split risk investment with three solid tenancies,” says Dave Lane of NAI Harcourts North Shore, who i s marketing 74 Newton Rd, Eden Terrace, for sale by negotiation. He is also marketing a retail property in four titles for sale on the North Shore’s busy Lake Rd.
Lane says the standalone Newton Rd building of 3619.25sq m on a freehold site of 2113sq m generates annual rent of $ 666,000 from three commercial tenants — Golf Warehouse, Just Laptops and the Christmas Parade. It also has income from billboards. “The property receives a huge amount of exposure to traffic that is unmatched by any neighbouring commercial properties, which include warehouses, retail and office buildings,” Lane says.
“It is very visible on an elevated site fronting busy Newton Rd and abutting the northwestern cycleway.
“Since the cycleway is owned by the council, the exposure is unlikely to be lost from this site in future.”
Newton Rd i s the main service road from Ponsonby and Grey Lynn to Eden Terrace. About 100m down the road are the SH16 on- and- off ramps.
“Golf Warehouse, New Zealand’s leading golf retailer, occupies a substantial bulk retail and administration area within the complex,” says Lane.
“An additional separate retail tenancy on the same level is occupied by Just Laptops, while to the rear of the property, with dual entry from Randolph St, i s a high- stud warehouse storage area, partly occupied by Golf Warehouse and with the balance leased to the Christmas Parade.”
Lane says it was built in 1977 as a head office, retail and distribution centre for Passmores Liquor.
The general structure i s of reinforced concrete frame with a steel portal roof. The floors are supported by precast double- tee spanning members and most walls are infilled with double- skin concrete block.
Under the Unitary Plan it’s in a Business Mixed Use zone which, using a height variation control, will allow for development up to 32.5m — up from the present 15m limit.
Lane says Golf Warehouse has a 10- year tenancy paying $ 400,000 a year in rent plus GST and outgoings. The sports retailer occupies 1826sq m, including office, basement storage and part use of the high- stud warehouse. Outgoings are 100 per cent recoverable from the Golf Warehouse.
The Christmas Parade rents 1563sq mof the high- stud warehouse, as stor- age for some of the equipment and floats used in the annual Farmers Santa Parade on Queen St, paying rent of $ 200,000 a year plus GST.
“The third tenant, Just Laptops, leases 229.5sq m of retail and office space for $ 60,000 per annum plus GST and they say this location works very well for them. In addition, income i s generated from signage billboards fronting Newton Rd with Phantom Billstickers taking advantage of the high- exposure location.”
The property has 26 on- site car parks, “a convenience not so common” in the location. As well as the Newton Rd entrance, an easement allows access from Cargill St.
Lane says at a time when commercial property li stings are low, it i s expected the complex will be snapped up by a savvy investor.
“This Newton Rd property ticks all the boxes with a high- profile location, in a busy area, with secure tenants, a long- term lease and returning $ 666,000 per year.”
Over on the North Shore, Lane is marketing for sale by negotiation a 447sq m building fully occupied by four retail tenancies at 453- 459 Lake Rd, Takapuna.
The 528sq m freehold property is in four tenancies with a wide frontage on to the retail strip of Lake Rd and generates annual rent of just under $ 153,000. The tenants are Takapuna Liquor Spot, Ezone Computers, Pizza Club and Sunvital.
Takapuna Liquor Spot has a three- year tenancy, with two rights of renewal of three years until October 2023 paying $ 54,297 per annum for 140.4sq m. Liquor Spot is part of one of the country’s largest liquor chains with 216 stores nationwide.
Ezone Computers has a six- year tenancy, with two four- year rights of renewal and a final expiry date of August 31, 2023, paying annual rent of $ 39,566 for 93sq m.
Ezone sells computer products and services including PC systems, software, parts and performs a broad range of repairs and IT service.
Pizza Club has a three- year tenancy, with two three- year rights of renewal giving a final expiry date of April 30, 2021, and paying annual rent of $ 29,550 for 59.3sq m.
Pizza Club has eight stores across Auckland with more planned.
Sunvital, a licensed tanning studio, occupies the rear unit on a tenancy running for a period of four years, with two three- year rights of renewal and a final expiry date of May 7, 2025. The Sunvital studio, which pays annual rent of $ 29,500 for 14.3sq m, has been in operation in Takapuna for more than 10 years.
Three of the property’s tenants are at the front of the building and the fourth occupies space at the back.
“This location surrounded by office and retail buildings and affluent residential streets has high pedestrian traffic and attracts shoppers from all over the North Shore,” Lane says.
“The vendor says he has never experienced a vacancy while owning the property.”
As well as the security and steady income from a split- risk investment, this part of Takapuna i s to have increased height limits under the Unitary Plan ensuring greater opportunities for development in the future.
“The area will be designated a Metropolitan Centre, which makes it even more attractive for investors with the zoning second only to a City Centre in overall scale and intensity,” says Lane. Under the new plan, buildings can be 72.5m high, or 18 storeys, with allowed activities including: dwellings; commercial services; food and beverage; offices; and retail.
“In addition to the attractiveness of future development, a multitenanted property rarely becomes available in Takapuna,” Lane says.
“This i s a low- risk investment property in a first- class beachside city location with strong prospects for growth.”
Construction is a concrete block with an iron roof. The site is a rectangular shape with a level contour, with a 14.95m street frontage on Lake Rd. The rear of the building i s accessed via the service lane running behind the properties fronting Lake Rd.
Lane says the growth expected in Lake Rd is backed by local government, key stakeholders and the Takapuna Beach Business Association.
“This property at 453- 459 Lake Rd is arguably one of the best investment properties on the market with solid multi- tenanted income, accompanied by unlimited potential in a top location.”