Tauranga waterfront trophy
A recently built four-storey office and hospitality development is up for sale in the Tauranga dining precinct.
Colliers International Tauranga MD, Simon Clark, says the high-spec building at 49-51 The Strand offers stunning harbour views.
It is fully leased to four long term tenants, all of whom have invested in high-quality fit-outs, providing a splitrisk income with long-term leases, built-in rental growth and personal lease guarantees. The property is to be auctioned at 11am on February 21, unless it sells earlier.
“The location, superb build quality and strong tenant covenant make it the ultimate waterfront trophy investment,” Clark says.
Colliers’ Duncan Woodhouse says the property was developed by Strand Commercial Properties and built by iLine Construction. It comprises a 985sq m office and retail complex on a 294sq m freehold site with Commercial zoning.
“Premium elements include floor to ceiling glass facades, a butterfly roof with 4m-high windows, a glass curtain wall to the lift lobbies, and redwood soffits and louvres,” Woodhouse says.
The property returns a combined net rental income of $362,770 plus GST and outgoings, with lease terms of between six and 10 years.
The ground floor hospitality space is leased by Hereford and Farm Produce Limited, which also runs Alimento and the Elizabeth Street Cafe. The 238sq m tenancy is split into two offerings — Otto Eatery, and Oscar Restaurant and Wine Bar — which share a kitchen and facilities. Otto is among the only cafe establishments offering coffee during the day to service the large number of office staff in the area. The company is signed to a
10-year lease returning $110,670, with six rights of renewal of six years each. Rental reviews are yearly to CPI, capped at 3 per cent, and every five years to market, capped at 10 per cent.
The upper office levels are each
241sq m with 38sq m balconies. They are tenanted by real estate agency Sotheby’s, property valuation firm Telfer Young, and insurance brokerage Financial Independence.
Sotheby’s Tauranga, which is operated by Colliers Hawke’s Bay and Rural franchisee Tremain Group, occupies the first floor on a six-year lease, with a single five-year right of renewal. The lease returns $86,300, with market rent reviews every three years.
Telfer Young, which occupies the second floor, is signed to an eight-year lease returning $76,800, with five rights of renewals of five years each. Rental reviews are yearly to CPI, capped at 3 per cent, and every four years to market and on renewal.
Top-floor tenant, Financial Independence, is signed to a six-year lease returning $89,000, with six rights of renewal of six years each. Rental reviews are yearly to CPI, capped at 3 per cent, with market reviews on renewal.