Taupo retail block offers premium opportunity for property investors
A block of shops housing a regional branch of one of New Zealand’s biggest insurance companies alongside a nationally-renowned sporting goods retailer has been placed on the market for sale.
The two-storey premises at 36 Heuheu Street in Taupo’s central business district is home to insurance giant AMI and Stirling Sports.
AMI was founded in New Zealand in 1926 as the South Island Motor Union (SIMU) and is now part of IAG New Zealand, a subsidiary of Insurance Australia Group.
Stirling Sports has been trading in New Zealand for 56 years, and with
60 outlets nationwide, is one of the country’s biggest sporting goods and apparel retailers.
Now the premises at 36 Heuheu St is being marketed for sale by tender through Bayleys Taupo, with tenders closing on August 5.
Salespeople Gary Harwood and Lisa Christensen said the 695sq m building was located on some 488 sq m of land zoned Taupo Town Centre Pedestrian Precinct under the Taupo District Council plan.
The two tenancies within the Taupo¯ block generate a combined annual net rental of $106,728 plus GST, and encompass:
● AMI occupying some 166 square metres of ground floor retail space on a current lease running through to 2023, with one further three-year right of renewal and rental reviews every two years and
● Stirling Sports occupying some
170 square metres of ground floor retail space on a current lease running through to later this year, with three further two-year rights of renewal.
In addition to the street frontage onto Heuheu St, the corner site overlooks a vehicle access lane linking through Horomatangi St.
The lane leads to five car parks at the rear of the building.
Access to the upper-level office space also leads off the car park.
Harwood said with the building’s upper floor currently vacant, there was considerable opportunity to increase the location’s rental returns.
There is the option of either tenanting the site from an investment perspective, or relocating operations to the town centre.
“With the 360sq m vacant office space on the first floor, there is the option of either tenanting the site from an investment perspective, or relocating operations to the town centre.
“The space is currently configured into a multitude of offices, meeting rooms, and storage spaces, all having access to staff bathroom and lunchroom amenities.
“With views over Heuheu St the absolute town centre location would suit a professional services firm such as a legal practice or accounting firm, or a healthcare services provider such as dental clinic or doctor’s practice.”
A Taupo¯ retail tenancy survey conducted in May last year by property research firm Keys Valuers reported the town centre had an occupancy rate of 96.1 per cent — up from 94.5 per cent in May 2018.
“This would be considered to be a strong performance in comparison to other similar regional areas Taupo¯ has a very low vacancy rate through the ‘core’ retailing streets,” the Keys Valuers report said.
Christensen said the split configuration and tenancy mix of the property as a whole meant it could appeal to a wide range of either investors or owner-occupiers.
The core of the building was constructed in 1962 with concrete block walls and columns on concrete pad foundations, and was extended in 1968 using similar building methods.
The premises now has a new build standards rating of 70 per cent.