City unit has Bubbles with snacks
Bubbles Laundromat and Food Shack snack bar occupy one of three retail spaces at 137 Hobson St. Photo / Supplied
A ground-floor Auckland CBD unit housing a laundromat and snack bar from which it earns $76,630 a year plus GST in net rent, will be auctioned next month.
The unit offers its buyer a split-risk investment property, says Nicolas Ching of Bayleys who, with colleague James Chan, is marketing 137 Hobson St for sale by auction on Wednesday March 7.
Ching says the unit is one of three retail spaces on the ground floor of the Imperial Gardens Apartments building. It sits diagonally across the road from SkyCity and is within walking distance of Queen St and the SkyCity Convention Centre, now under construction.
“The property is in a high-traffic location - surrounded by apartment blocks and office towers with easy access to public transport and a wide range of public amenities.
“Both tenants have occupied the property since 2012 and offer the buyer a steady revenue stream, with room for growth,” Ching says.
The 50sq m unit has a ratings valuation of $700,000 and comes with three leased car parking spaces and one vacant storage space in the basement of the Imperial Gardens Apartments building.
Bubbles Laundromat, a seven-day self-service laundromat open from 6am to midnight, generates an annual net rent of $49,520.55 plus GST on a lease expiring on July 22, 2024.
Food Shack, which sells hot Indian-styled snack food, occupies a partitioned unit at the front of the property, and generates annual net rent of $18,469.56 plus GST with its lease expiring on April 30, 2024.
Ching says three car parking spaces earn annual gross rent of $3120 plus GST each; and the vacant storage space could easily be leased to residents in the apartment building.
Laundromats are viewed as ‘recession-proof businesses’. Photo / Supplied
“Both Bubbles Laundromat and Food Shack benefit from having a large residential population living directly above them.
“Imperial Gardens Apartments has 275 residential units and is popular with students and CBD workers; two demographics that frequently use laundromats and snack bars.”
The businesses also benefit from being near neighbouring apartments blocks, and from a large pool of customers represented by city office workers and backpackers staying in the area’s numerous hostels.
“Laundromats are viewed as recession-proof businesses,” Ching says. “They are a cash business, with customers required to pay up front for laundry services. People will always need clean clothes. Unlike most businesses, coin-operated laundries do not feel the effects of economic downturns. In fact, demand often increases during a recession as customers search for a convenient, affordable way to wash their clothes.
“Even people with washers and dryers at home are using self-service laundries for the sake of convenience. It can take quite a lot of time to do a heavy load at home – and in an apartment, find the space to dry it – and that's where laundromats come in. Residents can just run over to the laundromat and use a couple of the large machines.
“In addition, office dress codes are growing increasingly less formal. As more workers opt to wear casual clothing, which unlike business attire does not require dry cleaning, consumers will be making more trips to the laundromat.”
Ching says inclusion of a snack bar within the laundromat adds to the property's value.
“Property owners that lease space to laundromat businesses have realised they can maximise their profits by providing waiting customers with on-site access to services like snack bars.”
Nicolas Ching and James Chan of Bayleys