Five Victoria Park Complex bars, restaurants for sale
The five adjoining character buildings for sale are at 17-37 Drake Street.
A portfolio of five adjoining character buildings — each on its own freehold unit title — is for sale, offering the new owner net annual rental income of $802,689.
The striking Auckland CBD fringe property is among the trophy offerings in Bayleys’ latest Total Property portfolio.
It encompasses 1840 sq m of buildings, plus 581 sq m of outdoor terraces at 17-37 Drake Street, with long-term leases in place to five well established food and beverage tenants.
Bayleys Robert Platt and James Chan are marketing the property, which is for sale as one lot by a tender process closing October 26, unless sold earlier by negotiation.
“These are five beautifully restored heritage buildings, each with its own identity and wide Drake Street frontage, which form part of the fully restored Victoria Park Markets complex,” says Platt.
“They have very good seismic ratings for historic buildings, with Initial Evaluation Procedure (IEP) assessments ranging from 70-100 percent of New Building Standard.
“The buildings ooze character and charm with ample natural light — helped by high stud heights — wooden floors, exposed brick walls and entertainment terraces, ideal for summer days and corporate and private functions. Each tenancy is self-contained and the internal fitout investment from each occupant has been substantial..”
James Chan says the property offers a good spread of investment risk across a variety of restaurant and bar businesses.
Leases range from five-to-12 years and a remaining weighted average lease term of just over five years.
The largest tenancy is La Zeppa which leases 727 sq m. It has been in occupation since 2009 and has a 10-year-lease with two five-year rights of renewal. Its tenancy overlooks Victoria Park with an extensive outdoor terrace area called “The Rooftop”. Its menu has a Mediterranean street food influence and offers an extensive selection of tapas.
Bistro styled restaurant and bar The White Rabbit occupies 574 sq m which includes an outdoor beer garden and private dining rooms and function space. It is on a 10-year lease from 2012, also with two five-year rights of renewal.
The other tenants, are Tom Tom Bar and Eatery, whose tenancy includes a 254 sq m outdoor pavilion, the Hansik Korean Bar and Restaurant and The Oakroom, a New York-style bar and restaurant with an elevated deck which also caters for private events for up to 160 people.
Chan says the property also offers a good level of built-in rental growth. The La Zeppa and White Rabbit leases have annual rental increases based on the Consumer Price Index (CPI). The two most recently signed leases to Hansik and Tom Tom and have stepped annual rental increases until 2019 and to the greater of market or CPI plus 2 per cent or 3 per cent thereafter.
He says the fact that the tenancies are on separate titles provides increased flexibility for the next owner: “It opens up the option of on selling one or more of the titles individually at some stage in the future.”
Platt says Drake Street contains a mix of protected character buildings and high quality recently constructed medium rise apartment and office buildings.
“The surrounding area has experienced extensive development growth over the past few years, led by Mansons TCLM’s new office buildings on Victoria Street, including Spark’s head office complex, the NZME building and Oracle House ,as well as the neighbouring Victoria Park car park and boutique hotel redevelopment.”
The Swiss-Belsuites Victoria Park hotel above the carpark comprises 40 luxury studio and one to three-bedroom suites and opens on October 21. It will be managed and leased on a long-term basis by Hong Kong-based and New Zealand-owned Swiss-Belhotel International Group.
“One block away, Sale Street is undergoing a major rejuvenation led by the success of Tournament Parking’s City Works Depot redevelopment with new office, apartment and food and beverage premises developments underway or planned right along the street,” says Platt.
“All these new office, residential and hotel developments increase the number of people working, living and staying in the area and create increased patronage for restaurant and bars which the operators at 17-37 Drake Street will benefit from.”
Platt says the century-old Victoria Park Market complex, which once housed the city’s waste depot and incinerator complex, has also benefited from its $20 million refurbishment in 2012 and 2013 into a more upmarket retail precinct, with offerings ranging from lifestyle and beauty stores to cafes, delicatessens, restaurants and bars.
He says the property is close to two car parking complexes as well as public transport and a wide range of amenities are within easy walking distance, including the Les Mills fitness centre on Victoria Street and the new facilities being opened up in the Wynyard Quarter.