Bite-sized Shore investments
Three bite-size North Shore retail and office property offerings are likely to appeal to investors looking to diversify their risk from the residential market, says Bayleys North Commercial.
The agency has a fishing shop, an office suite and a restaurant, all tenanted, for sale in Albany. And each can be purchased for a similar cost to an average North Shore house, says Bayleys North Shore Commercial retail manager, Damian Stephen.
The three properties, featured in Bayleys’ latest national Total Property portfolio, are generating net annual rental income of between $45,000 and $53,672 plus GST which makes them very affordable for smaller investors, Stephen says.
“We are receiving increasing inquiries for commercial properties under or just over the $1 million mark from residential investors. This is partly being driven by a perception that the North Shore residential market is fully priced but also by the fact that it makes sense to spread your investment exposure across different property types.
“Commercial properties also come with fixed lease terms, providing more certainty of tenure than periodic residential tenancies. Tenants also pay outgoings such as rates, insurance and body corporate levies, which means commercial property mostly offers a better net income return than residential.”
Stephen says commercial investors generally look for properties in areas of high population and business growth, which reduces tenancy risk, and Albany is one of Auckland’s fastest-growing areas.
He and Bayleys North Shore Commercial colleagues Adam Curtis and Adam Watton are marketing one of two units for sale in the Rosedale Plaza, located in a high-profile position on the corner of Rosedale Rd and Henry Rose Place in the North Harbour Industrial Estate.
Unit 8, 215 Rosedale Rd comprises just over 200sq m of retail, mezzanine office and warehouse/storage space with rear roller-door access and also comes with four exclusive external car parks. It is returning annual net rental income of $45,000 plus GST
“It is occupied by West Shell, a specialist fishing equipment and apparel retailer, which also has a shop in Dunedin as well as an online sales business,” Curtis says. “There is a five-year lease from September 2016 with two three-year rights of renewal that, if exercised, would take the tenancy through until August 2027.
“With vacancy rates across this area at historical lows, tenant demand has stimulated significant rental growth for units of this nature which is yet to be recognised,” says Watton. “This demand, lack of greenfield development sites and the increased cost of construction all adds up to an affordable opportunity that you will struggle to replace in the future.”
The unit will go up for sale in Bayleys’ next Auckland Total Property auction on September 19, unless sold prior.
Also for sale is Unit M, 215 Rosedale Rd, comprising a 235.5sq m first-floor office suite in the Rosedale Plaza, generating net annual rental income of $46,500 plus GST. It is being marketed by Bayleys North Shore Commercial’s Tonia Robertson and Jane McKee and is for sale by deadline private treaty, closing 4pm, September 20, unless sold prior.
The office unit is tenanted by The Insurance Group, which has been in occupation since 2014 with a current
lease running until April 2019 and one further two-year right of renewal. Established in 1995, it provides a wide range of private and business insurance services.
The unit comprises a mix of openplan and four executive partitioned offices, a central boardroom with doors opening on to the reception area, a kitchenette, storeroom and toilet and bathroom area.
“Good quality partitioning features full-height glazed panels on a number of the internal walls,” says Robertson. “The high window-to-floor area ratio allows excellent natural light throughout the unit enhanced by its front corner position in the Rosedale Plaza.
“The premises enjoys excellent prominence to Rosedale Rd, one of Albany’s main roads, with substantial signage exposure possible to a high volume of passing traffic. There is also good profile visibility to the central courtyard of the plaza.”
Rosedale Plaza was completed in 2003 and comprises 13 units ranging in size from 130-450sq m with a diverse mix of longstanding tenants which include a Korean restaurant and Fat Boys BBQ restaurant and bar.
“The L-shaped building faces a substantial central car parking area and was positioned to provide maximum signage exposure and prominence for all units within the complex, particularly to Rosedale Rd,” says Sims. “This is a principal thoroughfare linking the East Coast Bays and the Tawa Drive motorway interchange through to the North Harbour Industrial Estate”
Sims says excellent access to the Northern Motorway is available via the nearby Tawa Drive/Greville Rd interchange or alternatively Upper Harbour Drive to the south.
The third Albany property for sale is Unit 7A, 21 Corinthian Drive, an 87sq m unit in the Orchard Park Retail Hub with a 10-year lease from September 2017 to Double Happy Chinese restaurant plus two three-year rights of renewal. It is producing net annual rental income of $53,672 plus GST with a rent increase based on the Consumer Price Index due in September.
The offering is being marketed by Meng He, Steven Liu and Eddie Zhong and will also be part of Bayleys’ Auckland Total Property auction on September 19, unless sold prior.
“This is an excellent opportunity to secure a well-positioned property in a high-exposure retail complex facing Albany Highway,” says He.
“It is located on a highly visible corner site next to the main entrance to the Orchard Retail Hub. There are multiple access points and ample car parking and a wide range of surrounding tenants including banks, lawyers, a childcare centre as well as a variety of other business occupants.”
Liu says the unit is part of one of the biggest convenience retail centres developed on the North Shore in recent years. Orchard Park Retail Hub, which opened last year has 16 units with 94 common car parks and is the final stage of a two-part development undertaken by Northbridge Properties. The neighbouring first stage of the project, the Corinthian Retail Centre at 14 Corinthian Drive, has 14 units and 54 shared parks.
Nearly all of the units were sold off the plans or during construction by Bayleys North Shore Commercial to a mix of owner-occupiers or investors who have leased the premises. The units are occupied by predominantly food and beverage outlets.
“This has been a very successful project that has met with strong uptake because of its positioning, with triple frontage to Albany Highway, Corinthian Drive and Data Way, a wide commercial catchment and a significant population base from which to draw customers.”