Takapuna, Rothesay Bay potential
Two fully leased retail properties with longer term development potential are among 10 North Shore commercial properties up for sale in Bayleys’ latest Total Property portfolio.
The offerings, in Takapuna and Rothesay Bay, will go under the hammer on March 7 unless sold prior along with more than 20 other offerings in Bayleys’ first Total Property portfolio auction for 2018.
In central Takapuna, a recently refurbished 187sq m building on a strategic 369sq m site at 452-456 Lake Rd is generating annual rental income of $134,179 from two tenancies.
The anchor tenant is NZX listed Heartland Bank which occupies around 145sq m of the single-level building on a 10-year lease from 2015, with two-five year rights of renewal.
Established in 2011 through the merger of four long standing financial organisations, Heartland obtained its banking licence from the Reserve Bank in December 2012 and employs more than 350 people around New Zealand.
The other tenant, Basu Restaurant, occupies the balance of the building on a five-year lease from September 2016 and also has two fiveyear rights of renewal. The restaurant offers an authentic noodle and dumpling style of dining.
Tonia Robertson, who is marketing the property with Bayleys North Shore Commercial colleague Ranjan Unka, says rent reviews for both tenancies are due this year offering income upside for the new owner.
The Basu Restaurant lease has fixed annual rental increases of three per cent while Heartland’s rent is reviewed every three years to market.
The building was earthquake strengthened in 2015 and now has a seismic assessment of 83 per cent of New Building Standard. In conjunction with this structural upgrade, the Heartland Bank premises was fully refurbished prior to the commencement of its lease. This included all new shop front joinery, floor coverings, suspended ceilings and lighting, air conditioning, staffroom and toilet amenities. Heartland also undertook an extensive fit out.
“The 452-456 Lake Rd offering comprises well-presented premises with the added bonus of parking for up to eight vehicles at the rear of the site which bounds a laneway (Club Lane) that runs between the property and the substantial 1-7 The Strand building,” says Robertson.
“It is exceptionally well-located and enjoys a dominant road front position on sought after Lake Road, the main thoroughfare from Takapuna to Devonport and a major feeder from the Takapuna, Milford and Devonport areas to the Esmonde Road motorway interchange.”
Unka says the strength of the location, with substantial surrounding commercial and residential activity, in conjunction with its proximity to the “golden sands” of Takapuna Beach, significantly increases the property’s development appeal. “Its favourable Metropolitan Centre zoning, which allows for a wide range of intensive commercial and residential uses, means the site has considerable potential for future multi-level mixed use development.”
Further north in Rothesay Bay, a standalone 190sq m single-level retail building on a high profile 316 sq m corner site is also up for auction, offering its next owner a current annual rental return of $70,622 net and future development options.
It is located at 2-8 Montgomery Ave with substantial exposure also to high volumes of traffic travelling along Beach Rd, a main arterial running between Browns Bay to the north and Takapuna to the south.
The largest of the building’s two tenants is The Loft — Golden Silk Thai fusion restaurant on an eight-year lease until April 2022 with one-four year right of renewal. The balance of the premises is leased to Hair D’Art for four years from August 2015, with one four-year right of renewal.
“The restaurant and hair salon are well patronised and popular with the local population,” says marketing agent Brian Caldwell.
“Rothesay Bay is an affluent residential neighborhood, with a busy suburban shopping precinct which this property is located on the fringe of. This means it is very handy to the major supermarkets, main retail shops as well as the beach.”
The property is zoned Neighbourhood Centre. This zoning applies to single corner retail buildings or small shopping strips located in residential neighbourhoods which provide residents and passers-by with frequently needed retail and commercial services.
“The provisions of the zoning typically enable buildings of up to three storeys with residential use on the upper floors permitted and encouraged,” says Caldwell.
“Development is expected to be in keeping with the surrounding residential environment and to a high standard which enhances the quality of streets within the area and public open spaces.
“A substantial new high quality apartment development which includes ground floor retail has recently been completed on the opposite corner and a new owner could look at the possibility of a similar type of development, on a smaller scale, further down the track,” says Caldwell.
“Meanwhile, the property offers an affordable entry point to the commercial property market with the opportunity to add more value later.”