Petrol powered portfolio for sale
Five North Island service stations with long leases are on the market, reports Colin Taylor
Aportfolio of five upper North Island service stations is for sale with the bulk of the properties’ 20- year leases still to run.
The four Caltex and one BP stations are generating a combined annual net rental income of $ 685,464. Featured in Bayleys’ latest Total Prop
erty portfolio, they are being offered for sale on behalf of one vendor through Alan Haydock and Damien Bullick, Bayleys Auckland, by tender closing July 12 unless sold earlier by negotiation.
“All these offerings have just over 16 years left on their leases — properties with this length of tenure hardly ever come up for sale,” says Haydock. “The leases also have built in- rental growth, providing two- yearly fixed rental increases of four per cent, with the next increase due in November, as well as reviews to market in November 2023 and on renewal.
“In addition, the triple net lease structure means tenants cover ongoing maintenance and capital expenditure. It’s a perfect bottom- drawer, hands- off investment opportunity.”
Bullick says all the properties are strategically positioned in high exposure locations on busy roads. All leases run until October 31, 2033, with four three- year rights of renewal. The portfolio comprises:
A Caltex station at 520 Te Ngae Rd, Rotorua, on a high profile 2536sq m corner site: It is the nearest major service station to Rotorua Airport, a drop off point for rental vehicles. The property, which is earning net annual rental income of $ 140,712, i s integrated with the Te Ngae shopping centre which has a variety of national and local tenants. Developed in the 1990s, the service station comprises a large forecourt, 198sq m Caltex Fix shop and a car wash.
The Caltex station at 1433 Dairy Flat Highway, Auckland: Generating net income of $ 157,248 per annum, it is well positioned to service the surrounding rural community and passing traffic from its 3690sq m corner site on State Highway 17. Constructed in the 1980s, facilities include a 215sq m retail building with storage, a car wash, forecourt and canopy, and eight fuel pumps. To the southern end of the site is an LPG installation facility and additional gas bottle depot.
A Caltex station at 303- 311 Western Hills Drive, Whangarei: On a 3041sq m site with excellent exposure to high volumes of traffic travelling the main arterial route through Whangarei on SH1. The site benefits from right- of- way access off Selwyn Avenue through a neighbouring property tenanted by Burger King. The service station was developed in the 1990s and consists of a main 210sq m retail and administration area, canopy and four fuel pumps plus a car wash and LPG tank holding area. It is producing net annual rental income of $ 179,712.
A Caltex station at 10 Puketona Rd, Paihia: Occupying 2586sq m of land opposite a Countdown Supermarket on the main road into Paihia, the Bay of Islands’ principal tourist town. The property is generating net annual rental income of $ 117,936, with complementary activities under- taken in a 639sq m two- level building on the site. The ground level contains the service station shop and forecourt plus two sub- tenants, a tyre bay and workshop and an auto and marine workshop. On level one, an additional sub- tenant occupies a flat.
A BP station at 176 Commerce St, Kaitaia: A high- profile 1788sq m corner site in three titles at the northern end of the commercial district, generating rent of $ 89,856pa. As well as the primary service station and retail functions, the property has a car wash, workshop, LPG installation area and secondary diesel pump for commercial vehicles.
Bullick says long initial lease terms, combined with fixed rental growth and hands- off triple net lease structure make the investments a rare opportunity.